Senate Bill No. 36

Introduced By lynch

By Request of the Code Commissioner

A Bill for an Act entitled: "An Act generally revising and clarifying the Montana Code Annotated; directing the code commissioner to clarify erroneous references contained in material enacted by the 55th legislature; amending sections 1-11-101, 2-1-212, 2-2-121, 2-2-136, 2-4-313, 2-4-622, 2-7-517, 2-8-113, 2-15-2204, 2-18-203, 2-18-301, 2-18-303, 2-18-304, 2-18-704, 2-18-1202, 3-2-405, 5-2-504, 5-4-307, 5-4-308, 5-5-214, 5-5-217, 5-11-203, 5-11-210, 5-11-212, 5-11-213, 5-17-205, 5-18-107, 5-22-101, 7-1-114, 7-2-2218, 7-2-2219, 7-4-2106, 7-4-2206, 7-6-2531, 7-7-4602, 7-13-4311, 7-14-4736, 7-16-2105, 7-16-4222, 7-32-2244, 7-34-2201, 10-2-416, 10-3-207, 10-3-501, 10-3-504, 10-4-101, 10-4-301, 13-13-276, 13-13-278, 13-25-106, 13-27-202, 13-37-106, 13-37-128, 13-37-130, 15-1-521, 15-1-704, 15-7-303, 15-8-104, 15-16-102, 15-16-119, 15-23-101, 15-23-703, 15-23-706, 15-23-707, 15-30-101, 15-30-111, 15-30-117, 15-30-121, 15-30-162, 15-30-201, 15-30-202, 15-31-102, 15-31-131, 15-32-102, 15-32-201, 15-32-403, 15-36-324, 15-36-325, 15-38-104, 15-38-106, 15-38-201, 15-38-202, 15-70-125, 15-70-235, 15-70-236, 16-1-106, 16-1-201, 16-1-202, 16-2-101, 16-2-103, 16-3-220, 16-6-106, 17-2-107, 17-3-221, 17-5-202, 17-6-103, 17-6-212, 17-7-502, 17-8-101, 18-1-103, 19-1-104, 19-1-402, 19-1-503, 19-3-1104, 19-3-1205, 19-9-411, 19-9-1101, 19-20-302, 19-50-102, 20-1-301, 20-7-504, 20-9-115, 20-9-341, 20-9-347, 20-9-466, 20-15-326, 20-15-404, 20-25-501, 22-1-412, 22-3-429, 22-3-603, 23-2-523, 23-2-536, 23-2-622, 23-2-717, 23-2-736, 23-5-406, 23-7-103, 23-7-211, 23-7-301, 25-10-206, 27-1-307, 27-1-718, 30-4-213, 30-10-103, 30-10-110, 32-1-381, 32-1-453, 32-1-1005, 32-3-803, 32-6-102, 33-2-523, 33-2-830, 33-4-511, 33-10-202, 33-16-1026, 33-16-1035, 33-17-603, 33-19-104, 33-22-703, 33-22-1108, 33-22-1521, 33-31-311, 35-1-933, 35-1-934, 35-1-1107, 37-25-305, 37-29-302, 37-29-305, 39-3-406, 39-8-207, 39-29-101, 39-51-307, 39-51-401, 39-51-402, 39-51-403, 39-51-404, 39-51-407, 39-51-501, 39-51-503, 39-51-1110, 39-51-1304, 39-51-2106, 39-51-2110, 39-51-2508, 39-51-2602, 39-51-3106, 39-71-431, 39-71-501, 39-71-517, 39-71-519, 39-71-703, 40-5-161, 40-5-164, 40-5-201, 40-5-701, 40-5-821, 41-1-402, 41-3-204, 41-4-102, 41-5-103, 41-5-1008, 45-2-311, 45-5-624, 45-8-317, 45-9-208, 45-10-108, 46-6-211, 46-14-101, 46-18-130, 46-18-801, 46-20-701, 46-24-212, 46-30-401, 50-4-504, 50-4-605, 50-5-101, 50-5-228, 50-5-1104, 50-31-103, 50-31-202, 50-31-203, 50-31-301, 50-31-306, 50-31-307, 50-31-311, 50-31-312, 50-53-201, 50-53-202, 50-53-203, 50-53-204, 50-53-206, 50-53-207, 50-53-211, 50-53-212, 50-53-216, 50-53-217, 50-53-218, 50-60-101, 52-2-523, 52-5-101, 52-5-108, 52-5-109, 52-5-112, 52-5-113, 53-1-104, 53-1-202, 53-6-110, 53-6-708, 53-7-101, 53-7-301, 53-19-102, 60-2-208, 60-11-121, 61-2-108, 61-3-446, 61-3-463, 61-3-502, 61-4-310, 61-5-121, 61-5-126, 61-8-356, 61-8-407, 61-8-422, 61-8-722, 61-12-201, 69-1-224, 69-12-314, 69-12-406, 72-16-331, 72-16-479, 72-17-213, 75-1-1101, 75-2-101, 75-3-103, 75-5-621, 75-5-1113, 75-6-205, 75-6-211, 75-10-707, 75-10-806, 75-11-313, 75-20-304, 76-2-202, 76-2-222, 76-2-302, 76-3-305, 76-3-511, 76-6-105, 76-14-113, 76-15-541, 76-15-543, 76-15-546, 77-1-804, 77-2-402, 77-2-403, 77-3-444, 77-6-202, 80-7-123, 80-8-111, 81-22-101, 82-4-232, 82-4-253, 82-4-254, 82-4-337, 82-4-360, 85-1-604, 85-2-701, 85-2-905, 85-3-211, 85-5-407, 85-5-408, 85-6-109, 85-7-1910, 85-7-2159, 87-2-803, 87-5-112, 90-2-1104, 90-2-1121, 90-4-1002, 90-6-127, 90-6-210, and 90-8-301, MCA; repealing sections 2-18-314, 2-89-201, 2-89-202, 2-89-205, 2-89-206, 2-89-208, 2-89-209, 3-5-516, 13-13-279, 15-6-212, 15-16-802, 15-16-803, 16-2-401, 16-2-402, 16-2-403, 16-2-404, 16-2-405, 16-2-406, 16-2-407, 16-2-408, 20-7-505, 39-7-601, 39-7-602, 39-7-603, 39-7-604, 39-7-605, 39-7-606, 61-1-122, 61-4-309, 70-1-311, 77-1-221, and 85-2-211, MCA; and providing effective dates."

Be it enacted by the Legislature of the State of Montana:

Section 1.  Section 1-11-101, MCA, is amended to read:

"1-11-101.   Definitions. As used in this chapter, the following definitions apply:

(1)  "Code" or "codes" means the Montana Code Annotated, which is a reenactment of the Revised Codes of Montana, 1947, the pocket supplements thereto, and the replacement volumes as provided in 1-11-103.

(2)  "Recodify" means to compile, arrange, rearrange, and prepare for publication. It includes, without changing the meaning, effect, or intent of any law:

(a)  correcting or changing punctuation, capitalization, spelling, grammatical construction, and numbering as required by uniform literary and bill drafting practice;

(b)  substituting the appropriate new code division reference for reference to a section of, to a part of, or to an entire "act";

(c)  substituting calendar date for "effective date", "hereafter", and similar terms;

(d)  creating new titles, chapters, parts, sections, or other divisions of the code;

(e)  changing or inserting language made necessary because of rearrangement;

(f)  eliminating redundant words;

(g)  when given direction or authority by another statute, correcting inaccurate or obsolete references to:

(i)  titles of officers or agencies, such as those changed by executive reorganization statutes;

(ii) other code sections, such as those that have been repealed or repealed and replaced;

(h)  changing inaccurate terminology to comply with statutory definitions or short form amendments, such as those found in 1-1-202(7);

(i)  changing or creating section captions (catchlines) to clearly reflect the content of the section, unless the section captions are specifically and expressly adopted as part of the law by the legislature."

Section 2.  Section 2-1-212, MCA, is amended to read:

"2-1-212.   Acceptance of concurrent jurisdiction over veterans center. The state of Montana hereby accepts the cession of concurrent jurisdiction with the United States over the real property comprising the veterans center, Fort Harrison, Montana, as ceded by Public Law 91-45, 83 88 Stat. 48, which was approved July 19, 1969, and made effective upon acceptance of the cession by the state of Montana."

Section 3.  Section 2-2-121, MCA, is amended to read:

"2-2-121.   Rules of conduct for public officers and public employees. (1) Proof of commission of any act enumerated in subsection (2) is proof that the actor has breached a public duty.

(2)  A public officer or a public employee may not:

(a)  use public time, facilities, equipment, supplies, personnel, or funds for the officer's or employee's private business purposes;

(b)  engage in a substantial financial transaction for the officer's or employee's private business purposes with a person whom the officer or employee inspects or supervises in the course of official duties;

(c)  assist any person for a fee or other compensation in obtaining a contract, claim, license, or other economic benefit from the officer's or employee's agency;

(d)  assist any person for a contingent fee in obtaining a contract, claim, license, or other economic benefit from any agency;

(e)  perform an official act directly and substantially affecting to its economic benefit a business or other undertaking in which the officer or employee either has a substantial financial interest or is engaged as counsel, consultant, representative, or agent; or

(f)  solicit or accept employment, or engage in negotiations or meetings to consider employment, with a person whom the officer or employee regulates in the course of official duties without first giving written notification to the officer's or employee's supervisor and department director.

(3)   A public officer or public employee may not use public time, facilities, equipment, supplies, personnel, or funds for any campaign activity persuading or affecting a political decision unless the use is:

(a)  authorized by law; or

(b)  properly incidental to another activity required or authorized by law, such as the function of an elected public official, the official's staff, or the legislative staff in the normal course of duties.

(4)   A state employee may not participate in a proceeding when an organization of which the employee is an officer or director is:

(a)  involved in a proceeding before the employing state agency that is within the scope of the employee's job duties; or

(b)  attempting to influence a local, state, or federal proceeding in which the employee represents the state.

(5)  A state officer or state employee may not engage in any activity, including lobbying, as defined in 5-7-102, on behalf of an organization of which the officer or employee is a member while performing the officer's or employee's job duties. The provisions of this subsection do not prohibit an officer or employee from performing charitable fundraising activities if approved by the employee's supervisor or authorized by law.

(6)  A department head or a member of a quasi-judicial or rulemaking board may perform an official act notwithstanding the provisions of subsection (2)(e) if participation is necessary to the administration of a statute and if the person complies with the disclosure procedures under 2-2-131.

(7)  Subsection (2)(d) does not apply to a member of a board, commission, council, or committee unless the member is also a full-time public employee.

(8)  A person who purposely or knowingly violates this section is guilty of a misdemeanor and upon conviction shall be punished by a fine of not less than $50 or more than $1,000, by imprisonment in the county jail for not more than 6 months, or by both. A civil proceeding under 2-2-136 or 2-2-144 does not preclude an action under this subsection."

Section 4.  Section 2-2-136, MCA, is amended to read:

"2-2-136.   Enforcement for state officers, legislators, and state employees. (1) (a) A person alleging a violation of this part by a state officer, legislator, or state employee may file a complaint with the commissioner of political practices. The commissioner does not have jurisdiction for a complaint concerning a legislator if a legislative act is involved in the complaint. The commissioner shall request any information necessary to make a determination from the complainant or the person who is the subject of the complaint and may issue subpoenas.

(b)  Unless the complaint is referred to the county attorney under subsection (1)(c), the commissioner shall hold an informal contested case hearing on the complaint as provided in Title 2, chapter 4, part 6. The commissioner shall issue a decision based upon the record established before the commissioner.

(c)  If it appears to the commissioner that a complaint alleges criminal conduct, the commissioner shall stay the proceedings under this section and refer the matter to the appropriate county attorney.

(2)  If the commissioner determines that a violation of this part has occurred, the commissioner may impose an administrative penalty of not less than $50 or more than $1,000, and if the violation was committed by a state employee, the commissioner may also recommend that the employing state agency discipline the employee. The commissioner may assess the costs of the proceeding against the person bringing the charges if the commissioner determines that a violation did not occur or against the officer or employee if the commissioner determines that a violation did occur.

(3)  The decision of the commissioner may be appealed to the ethics commission as provided in 2-2-137.

(4)  Except for records made public in the course of a hearing, a complaint and records obtained or prepared by the commissioner in connection with an investigation or complaint are not open for public inspection. The commissioner's decision issued after a hearing is a public record open to inspection.

(5)  The commissioner may adopt rules to carry out the responsibilities and duties assigned by this part."

Section 5.  Section 2-4-313, MCA, is amended to read:

"2-4-313.   Distribution, costs, and maintenance. (1) The secretary of state shall distribute copies of ARM and supplements or revisions to ARM to the following:

(a)  attorney general, one copy;

(b)  clerk of United States district court for the district of Montana, one copy;

(c)  clerk of United States court of appeals for the ninth circuit, one copy;

(d)  county commissioners or governing body of each county of this state, for use of county officials and the public, at least one but not more than two copies, which may be maintained in a public library in the county seat or in the county offices as the county commissioners or governing body of the county may determine;

(e)  state law library, one copy;

(f)  state historical society, one copy;

(g)  each unit of the Montana university system, one copy;

(h)  law library of the university of Montana-Missoula, one copy;

(i)  legislative council services division, two copies;

(j)  library of congress, one copy;

(k)  state library, one copy.

(2)  The secretary of state, each county in the state, and the librarians for the state law library and the university of Montana-Missoula law library shall maintain a complete, current set of ARM, including supplements or revisions to ARM. The designated persons shall also maintain the register issues published during the preceding 2 years. The secretary of state shall maintain a permanent set of the registers.

(3)  The secretary of state shall make copies of and subscriptions to ARM and supplements or revisions to ARM and the register available to any person at prices fixed in accordance with subsection (4).

(4)  The secretary of state, in consultation with the administrative code committee, shall determine the cost of supplying copies of ARM and supplements or revisions to ARM and the register to persons not listed in subsection (1). The cost must be the approximate cost of publication of the copies, including indexing, printing or duplicating, and mailing. However, a uniform price per page or group of pages may be established without regard to differences in cost of printing different parts of ARM and supplements or revisions to ARM and the register. Fees are not refundable.

(5)  The secretary of state shall deposit all fees in a proprietary fund.

(6)  The secretary of state may charge agencies a filing fee for all material to be published in ARM or the register. The secretary of state shall fix, in consultation with the administrative code committee, the fee to cover the costs of supplying copies of ARM and supplements or revisions to ARM and the register to the persons listed in subsection (1). The cost must be the approximate cost of publication of the copies, including indexing, printing or duplicating, and mailing. However, a uniform price per page or group of pages may be established without regard to differences in cost of printing different parts of ARM and supplements or revisions to ARM and the register."

Section 6.  Section 2-4-622, MCA, is amended to read:

"2-4-622.   When hearings officer unavailable for decision. (1) If the person who conducted the hearing becomes unavailable to the agency, proposed findings of fact may be prepared by a person who has read the record only if the demeanor of witnesses is considered immaterial by all parties.

(2)  The parties may waive compliance with 2-4-621 and 2-4-622 this section by written stipulation."

Section 7.  Section 2-7-517, MCA, is amended to read:

"2-7-517.   Penalty. (1) When a local government entity has failed to file a report as required by 2-7-503(1), unless an extension has been granted by the department for good cause shown, or to make the payment required by 2-7-514(2) within 60 days, the department may issue an order stopping payment of any state financial assistance to the local government entity or may charge a late payment penalty as adopted by rule. Upon receipt of the report or payment of the filing fee, all financial assistance that was withheld under this section must be released and paid to the local government entity.

(2)  When a local government entity has failed to make payment as required by 2-7-516(1) within 60 days of receiving a bill for an audit, the department may issue an order stopping payment of any state financial aid to the local government entity. Upon payment for the audit, all financial aid that was withheld because of failure to make payment must be released and paid to the local government entity."

Section 8.  Section 2-8-113, MCA, is amended to read:

"2-8-113.   Hearings by standing committee -- criteria for termination. (1) Prior to termination of an agency or program, the appropriate standing committee in each house of the legislature or a joint committee of both houses composed of members of the standing committee assigned to conduct the hearing shall hold a public hearing, receiving testimony from the public and the head of the department to which the agency or program involved is attached, the head of the agency involved, and persons who conducted the review.

(2)  In the event termination of an agency or program is recommended by the legislative audit committee, the agency involved in the termination has the burden of demonstrating a public need for the agency's or program's continued existence and the extent to which a change in the composition, structure, and operation of the agency or program would improve public health, safety, or welfare.

(3)  In determining whether to reestablish an agency or program, the legislature shall consider the performance audit and review conducted by the legislative audit committee, the public testimony responsive to the questions set forth in subsection (2) of 2-8-112, and other matters considered relevant by the committee."

Section 9.  Section 2-15-2204, MCA, is amended to read:

"2-15-2204.   Developmental disabilities planning and advisory council. (1) The governor shall appoint a developmental disabilities planning and advisory council in accordance with the provisions of this section.

(2)  The council is composed of at least 23 but no more than 25 members and consists of the following:

(a)  a representative of the program of services provided under the authority of the Rehabilitation Act of 1973, 29 U.S.C. 701, et seq.;

(b)  a representative of the program of services provided under the authority of the Older Americans Act of 1965, 42 U.S.C. 3001, et seq.;

(c)  a representative of the program of services for persons with developmental disabilities provided under the authority of Title XIX of the Social Security Act, 42 U.S.C. 1396, et seq.;

(d)  a representative of the program of services provided under the authority of the Individuals With Disabilities Education Act, 20 U.S.C. 1400, et seq.;

(e)  two recognized professionals, one each in the disciplines of medicine and law;

(f)  one member of the state senate;

(g)  one member of the state house of representatives;

(h)  seven persons, each of whom has a developmental disability or who is an immediate family member or guardian of a person with a developmental disability;

(i)  one member of each of the five regional councils provided for in 53-20-207, each of whom has a developmental disability or who is an immediate family member or guardian of a person with a developmental disability;

(j)  the director of the university-affiliated or satellite program on developmental disabilities, created pursuant to 42 U.S.C. 6031 6061, or a designee of the director;

(k)  the director of the state protection and advocacy system, created pursuant to 42 U.S.C. 6012 6041, or a designee of the director; and

(l)  a representative of a statewide developmental disabilities service provider organization whose member agencies provide direct services to persons with developmental disabilities.

(3)  (a) Each member who serves on the council pursuant to subsection (2)(a), (2)(b), (2)(c), or (2)(d) shall serve for a term concurrent with the respective term of the director of the agency that administers the program that the member represents. Upon the removal of an agency director from office, the representative's term as a member of the council is automatically terminated.

(b)  Each member who serves on the council pursuant to subsection (2)(f) or (2)(g) must be appointed or reappointed annually by the governor.

(c)  Eight of the members serving on the council pursuant to subsection (2)(e), (2)(h), (2)(i), (2)(l), or (3)(d) must be appointed by the governor to serve for terms concurrent with the gubernatorial term and until their successors are appointed. The remaining members serving on the council pursuant to subsection (2)(e), (2)(h), (2)(i), (2)(l), or (3)(d) must be appointed by the governor to serve for terms ending on January 1 of the third year of the succeeding gubernatorial term and until their successors are appointed.

(d)  Representatives named to the council pursuant to this section, in addition to fulfilling the requirements listed in subsections (2)(a) through (2)(l), may also be selected to represent the following areas: psychology, social work, special education, and minority groups, including Native Americans with developmental disabilities. A minimum of one member of the council must represent each of these areas. In the event that the persons listed in subsections (2)(a) through (2)(l) do not represent all of the areas of psychology, social work, special education, and minority groups, including Native Americans with developmental disabilities, up to two representatives may be added to the membership of the council to represent not more than two of these groups.

(4)  The council is allocated to the department for administrative purposes only and, unless inconsistent with the provisions of 53-20-206 and this section, the provisions of 2-15-121 apply."

Section 10.  Section 2-18-203, MCA, is amended to read:

"2-18-203.   Review of positions -- change in classification. (1) The department shall continuously review all positions on a regular basis and adjust classifications to reflect significant changes in duties and responsibilities. In the event that adjustments are to be made to class specifications, class series benchmarks, or criteria used for allocating positions to classes affecting employees within a bargaining unit, the department shall consult with the representative of the bargaining unit prior to implementation of the adjustments, except for blue-collar, and teachers', and liquor store clerks' classification plans, which plans must remain mandatory negotiable items under Title 39, chapter 31.

(2)  Employees and employee organizations must be given the opportunity to appeal the allocation or reallocation of a position to a class. The grade assigned to a class and factors assigned to class series benchmarks are not appealable subjects under 2-18-1011 through 2-18-1013.

(3)  The period of time for which retroactive pay for a classification appeal may be awarded under 2-18-1011 through 2-18-1013 or under parts 1 through 3 of this chapter may not extend beyond 30 days prior to the date on which the appeal was filed."

Section 11.  Section 2-18-301, MCA, is amended to read:

"2-18-301.   Purpose and intent of part -- rules. (1) The purpose of this part is to provide the market-based compensation necessary to attract and retain competent and qualified employees in order to perform the services that the state is required to provide to its citizens.

(2)  It is the intent of the legislature that compensation plans for state employees, excluding those employees excepted under 2-18-103 or 2-18-104 and excluding employees compensated under 2-18-313 through and 2-18-315, be based on an analysis of the labor market as provided by the department in a salary survey. The salary survey must be submitted to the office of budget and program planning as a part of the information required by 17-7-111.

(3)  Except as provided in 2-18-110, pay adjustments and pay schedules provided for in 2-18-303 and in 2-18-312, 2-18-313, and through 2-18-315 supersede any other plan or systems established through collective bargaining after the adjournment of the 54th legislature.

(4)  Pay levels provided for in 2-18-312, 2-18-313, and through 2-18-315 may not be increased through collective bargaining after adjournment of the 54th legislature.

(5)  Total funds required to implement the pay schedules provided for in 2-18-312, 2-18-313, and through 2-18-315 for any employee group or bargaining unit may not be increased through collective bargaining over the amount appropriated by the 54th legislature.

(6)  The department shall administer the pay program established by the legislature on the basis of merit, internal equity, and competitiveness to external labor markets when fiscally able.

(7)  The department may promulgate rules not inconsistent with the provisions of this part, collective bargaining statutes, or negotiated contracts to carry out the purposes of this part."

Section 12.  Section 2-18-303, MCA, is amended to read:

"2-18-303.   Procedures for using pay schedules. (1) The pay schedules provided in 2-18-312 must be implemented as follows:

(a)  The pay schedules provided in 2-18-312 indicate the entry salary and market salary for each grade for positions classified under the provisions of part 2 of this chapter.

(b)  Each employee newly hired by the state of Montana must be hired at the entry rate, except as provided in subsections (7) and (8).

(c)  On the first day of the first complete pay period in fiscal year 1996, each employee hired before July 1, 1995, is entitled to the amount of the employee's base salary as it was on June 30, 1995, plus, on the employee's anniversary date that occurs on or after September 30, 1995, the increases provided in subsection (1)(d), if applicable.

(d)(c)  (i) Effective on the first day of the pay period that includes an employee's anniversary date during the fiscal years year ending June 30, 1996, and June 30, 1997, an employee's market ratio must be compared to the target market ratio in the matrix in subsection (1)(d)(ii) (1)(c)(ii) that corresponds to the employee's grade level and completed years of uninterrupted state service. For employees hired on or before September 30, 1994, the anniversary date is October 1.

(ii) As provided in subsection (1)(d)(i) (1)(c)(i), the following matrix must be used to compare an employee's market ratio to the target market ratio that corresponds to the employee's grade level and completed years of uninterrupted state service:

TARGET MARKET RATIOS

Grade Years

0 1 2 3 4 5 6 7 8 9 10

4 0.844 0.874 0.904 0.935 0.967 0.999 1.000 1.000 1.000 1.000 1.000

5 0.842 0.871 0.900 0.930 0.961 0.992 1.000 1.000 1.000 1.000 1.000

6 0.840 0.868 0.896 0.925 0.955 0.985 1.000 1.000 1.000 1.000 1.000

7 0.838 0.865 0.892 0.920 0.949 0.978 1.000 1.000 1.000 1.000 1.000

8 0.836 0.862 0.889 0.916 0.944 0.972 1.000 1.000 1.000 1.000 1.000

9 0.834 0.859 0.885 0.911 0.938 0.965 0.993 1.000 1.000 1.000 1.000

10 0.832 0.857 0.882 0.908 0.934 0.961 0.988 1.000 1.000 1.000 1.000

11 0.830 0.854 0.878 0.903 0.928 0.954 0.980 1.000 1.000 1.000 1.000

12 0.828 0.851 0.875 0.899 0.924 0.949 0.975 1.000 1.000 1.000 1.000

13 0.826 0.849 0.872 0.896 0.920 0.945 0.970 0.996 1.000 1.000 1.000

14 0.824 0.846 0.869 0.892 0.915 0.939 0.963 0.988 1.000 1.000 1.000

15 0.822 0.844 0.866 0.888 0.911 0.934 0.958 0.982 1.000 1.000 1.000

16 0.820 0.841 0.863 0.885 0.907 0.930 0.953 0.977 1.000 1.000 1.000

17 0.818 0.839 0.860 0.882 0.904 0.926 0.949 0.972 0.996 1.000 1.000

18 0.816 0.836 0.857 0.878 0.899 0.921 0.943 0.966 0.989 1.000 1.000

19 0.814 0.834 0.854 0.875 0.896 0.917 0.939 0.961 0.984 1.000 1.000

20 0.812 0.831 0.851 0.871 0.892 0.913 0.935 0.957 0.979 1.000 1.000

21 0.810 0.829 0.849 0.869 0.889 0.910 0.931 0.953 0.975 0.997 1.000

22 0.808 0.827 0.846 0.866 0.886 0.906 0.927 0.948 0.970 0.992 1.000

23 0.806 0.825 0.844 0.863 0.883 0.903 0.923 0.944 0.965 0.987 1.000

24 0.804 0.822 0.841 0.860 0.879 0.899 0.919 0.940 0.961 0.982 1.000

25 0.802 0.820 0.838 0.857 0.876 0.895 0.915 0.935 0.956 0.977 0.999

(iii) If, on the first day of the pay period that includes an employee's anniversary date during the fiscal year ending June 30, 1996, the employee's market ratio is less than the target market ratio that corresponds to the employee's grade level and completed years of uninterrupted state service, the employee's base salary must be increased to the lesser of:

(A)  the market salary for the employee's grade multiplied by the target ratio that corresponds to the employee's grade level and completed years of uninterrupted state service; or

(B)  the employee's base salary as it was on the last day of the pay period immediately preceding the pay period that includes October 1, 1995, plus 5%.

(iv)(iii) If, on the first day of the pay period that includes an employee's anniversary date during the fiscal year ending June 30, 1997, the employee's market ratio is less than the target market ratio that corresponds to the employee's grade level and completed years of uninterrupted state service, the employee's base salary must be increased to the lesser of:

(A)  the market salary for the employee's grade multiplied by the target ratio that corresponds to the employee's grade level and completed years of uninterrupted state service; or

(B)  the employee's base salary as it was on the last day of the pay period immediately preceding the pay period that includes October 1, 1996, plus 6%.

(e)(d)  An employee's base salary may be no less than the entry salary for the employee's assigned grade.

(f)(e)  An employee's base salary may not exceed the maximum salary for the employee's grade. The salary of an employee may not be reduced because of this provision.

(g)(f)  The maximum salary for each grade is determined by subtracting the entry salary from the market salary and adding that amount to the market salary.

(h)(g)  An employee's market ratio, as it was on the last day of the pay period immediately preceding the pay period that includes October 1, 1996, may not be reduced as a result of the adjustment of the pay ranges provided in 2-18-312(2).

(2)  The pay schedules provided in 2-18-312 and the provisions of subsection (1) of this section do not apply to those teachers, liquor store occupations, or blue-collar occupations compensated under the pay schedules provided in 2-18-313 through and 2-18-315.

(3)  The pay schedules provided in 2-18-313 through and 2-18-315 must be implemented as follows:

(a)  (i) The pay schedules provided for in 2-18-313 indicate the annual compensation for teachers employed under the authority of the department of corrections or the department of public health and human services for fiscal years 1996 and year 1997.

(ii) The compensation of each teacher on July 1, 1995, is the same as it was on June 30, 1995.

(iii)(ii) On the first day of the first pay period that includes October 1 of each fiscal year, a teacher employed under the authority of the department of public health and human services prior to October 1, 1994, shall advance one step on the appropriate pay schedule adopted in 2-18-313. A teacher hired after October 1, 1994, shall advance on the teacher's actual anniversary date.

(iv)(iii) On the first day of the first full pay period during the month that includes the teacher's anniversary date, a teacher employed under the authority of the department of corrections shall advance one step on the appropriate pay schedule adopted in 2-18-313.

(v)(iv)  On the first day of the first pay period that includes October 1 of each fiscal year, a teacher employed by the Montana school for the deaf and blind shall advance one step on the teacher pay matrix used by the school.

(b)  (i) The pay schedules provided in 2-18-314 indicate the maximum hourly compensation for fiscal years ending June 30, 1996, and June 30, 1997, for those employees in liquor store occupations who have collectively bargained separate classification and pay plans.

(ii) The compensation of each employee on the first day of the first pay period in fiscal year 1996 or 1997 is that amount corresponding to the grade occupied on the last day of the preceding fiscal year.

(c)(b)  (i) The pay schedules provided in 2-18-315 indicate the maximum hourly compensation for fiscal years ending June 30, 1996, and June 30, 1997, for employees in apprentice trades and crafts and other blue-collar occupations recognized in the state blue-collar classification plan who are members of units that have collectively bargained separate classification and pay plans.

(ii) The compensation of each employee on the first day of the first pay period in fiscal year 1996 or 1997 is that amount corresponding to the grade occupied on the last day of the preceding fiscal year.

(4)  (a) (i) A member of a bargaining unit may not receive a pay increase until the employer's collective bargaining representative receives written notice that the employee's bargaining unit has ratified a completely integrated collective bargaining agreement covering the biennium ending June 30, 1997.

(ii) If ratification of a completely integrated collective bargaining agreement, as required by subsection (4)(a)(i), is not completed by July 1, 1995, retroactivity to that date may be negotiated.

(iii) If ratification of a completely integrated collective bargaining agreement, as required by subsection (4)(a)(i), is not completed by July 1, 1995, members of the bargaining unit must continue to receive the compensation that they were receiving as of June 30, 1995, until an agreement is ratified.

(b)  Methods of administration not inconsistent with the purpose of this part and necessary to properly implement the pay schedules and adjustments provided in 2-18-312, 2-18-313, through 2-18-315, and this section may be provided for in collective bargaining agreements.

(5)  The current wage or salary of an employee may not be reduced by the implementation of the pay schedules provided for in 2-18-312, 2-18-313, and through 2-18-315.

(6)  The department may authorize a separate pay schedule for medical doctors if the rates provided in 2-18-312 are not sufficient to attract and retain fully licensed and qualified physicians at the state institutions.

(7)  The department may develop programs that enable the department to mitigate problems associated with difficult recruitment, retention, transfer, or other exceptional circumstances. Insofar as To the extent that the program may apply applies to employees within a collective bargaining unit, it is a negotiable subject under 39-31-305.

(8)  The department shall review the competitiveness of the compensation provided to all occupations under this part. If the department finds that substantial problems exist with recruitment and retention because of inadequate salaries when compared to competing employers, the department may establish criteria allowing an adjustment in pay or classification to mitigate the problems. Insofar as To the extent that these adjustments may apply to employees within a collective bargaining unit, the implementation of these adjustments is a negotiable subject under 39-31-305."

Section 13.  Section 2-18-304, MCA, is amended to read:

"2-18-304.   Longevity allowance. (1) (a) (i) Effective July 1, 1995, through the last day of the pay period immediately preceding the pay period that includes October 1, 1995, in addition to the compensation provided for in 2-18-303, 2-18-312, 2-18-313, 2-18-314, or 2-18-315, each employee who has completed 5 years of uninterrupted state service must receive 9/10 of 1% of the employee's base salary multiplied by the number of completed, contiguous 5-year periods of uninterrupted state service.

(ii) Effective on the first day of the pay period that includes October 1, 1995, in addition to the compensation provided for in 2-18-303, 2-18-312, 2-18-313, 2-18-314, or 2-18-315, each employee who has completed 5 years of uninterrupted state service must receive 1.5% of the employee's base salary multiplied by the number of completed, contiguous 5-year periods of uninterrupted state service.

(b)  Service to the state is not interrupted by authorized leaves of absence.

(2)  (a) For the purpose of determining years of service under this section, an employee must be credited with 1 year of service for each period of:

(i)  2,080 hours of service following the employee's date of employment; an employee must be credited with 80 hours of service for each biweekly pay period in which the employee is in a pay status or on an authorized leave of absence without pay, regardless of the number of hours of service in the pay period; or

(ii) 12 uninterrupted calendar months following the employee's date of employment in which the employee was in a pay status or on an authorized leave of absence without pay, regardless of the number of hours of service in any month. An employee of a school at a state institution or the university system must be credited with 1 year of service if the employee is employed for an entire academic year.

(b)  State agencies, other than the university system and a school at a state institution, shall use the method provided in subsection (2)(a)(i) to calculate years of service under this section."

Section 14.  Section 2-18-704, MCA, is amended to read:

"2-18-704.   Mandatory provisions. (1) An insurance contract or plan issued under this part must contain provisions that permit:

(a)  the member of a group who retires from active service under the appropriate retirement provisions provided by law to remain a member of the group until the member becomes eligible for medicare under the federal Health Insurance for the Aged Act, 42 U.S.C. 1395, as amended, unless the member is a participant in another group plan with substantially the same or greater benefits at an equivalent cost or unless the member is employed and, by virtue of that employment, is eligible to participate in another group plan with substantially the same or greater benefits at an equivalent cost;

(b)  the surviving spouse of a member to remain a member of the group as long as the spouse is eligible for retirement benefits accrued by the deceased member as provided by law unless the spouse is eligible for medicare under the federal Health Insurance for the Aged Act or unless the spouse has or is eligible for equivalent insurance coverage as provided in subsection (1)(a);

(c)  the surviving children of a member to remain members of the group as long as they are eligible for retirement benefits accrued by the deceased member as provided by law unless they have equivalent coverage as provided in subsection (1)(a) or are eligible for insurance coverage by virtue of the employment of a surviving parent or legal guardian.

(2)  An insurance contract or plan issued under this part must contain the provisions of subsection (1) for remaining a member of the group and also must permit:

(a)  the spouse of a retired member the same rights as a surviving spouse under subsection (1)(b);

(b)  the spouse of a retiring member to convert a group policy as provided in 33-22-508; and

(c)  continued membership in the group by anyone eligible under the provisions of this section, notwithstanding the person's eligibility for medicare under the federal Health Insurance for the Aged Act.

(3)  (a) A state insurance contract or plan must contain provisions that permit a legislator to remain a member of the state's group plan until the legislator becomes eligible for medicare under the federal Health Insurance for the Aged Act, 42 U.S.C. 1395, as amended, if the legislator:

(i)  terminates service in the legislature and is a vested member of a state retirement system provided by law; and

(ii) notifies the department of administration in writing within 90 days of the end of the legislator's legislative term.

(b)  A former legislator may not remain a member of the group plan under the provisions of subsection (3)(a) if the person:

(i)  is a member of a plan with substantially the same or greater benefits at an equivalent cost; or

(ii) is employed and, by virtue of that employment, is eligible to participate in another group plan with substantially the same or greater benefits at an equivalent cost.

(c)  A legislator who remains a member of the group under the provisions of subsection (3)(a) and subsequently terminates membership may not rejoin the group unless the person again serves as a legislator.

(4)  A person electing to remain a member of the group under subsection (1), (2), or (3) shall pay the full premium for coverage and for that of the person's covered dependents.

(5)  An insurance contract or plan issued under this part that provides for the dispensing of prescription drugs by an out-of-state mail service pharmacy, as defined in 37-7-702:

(a)  must permit any member of a group to obtain prescription drugs from a pharmacy located in Montana that is willing to match the price charged to the group or plan and to meet all terms and conditions, including the same professional requirements that are met by the mail service pharmacy for a drug, without financial penalty to the member; and

(b)  may only be with an out-of-state mail service pharmacy that is registered with the board under Title 37, chapter 7, part 7, and that is registered in this state as a foreign corporation."

Section 15.  Section 2-18-1202, MCA, is amended to read:

"2-18-1202.   Definitions. As used in this part, the following definitions apply:

(1)  "Agency" has the meaning provided in 2-18-101 but does not include the Montana university system.

(2)  "Employee" means a person employed by the state who has achieved permanent status, as defined in 2-18-101, or officers and employees of the legislative branch and teachers under the authority of the department of corrections or department of public health and human services who have been employed for at least 6 continuous months and who have waived benefits under the provisions of 2-18-319 and 2-18-320.

(3)  "Privatization" means contracting with the private sector to provide a service normally or traditionally provided directly by an employee of an agency."

Section 16.  Section 3-2-405, MCA, is amended to read:

"3-2-405.   Settlements and accounts to state auditor treasurer. (1) The clerk is responsible for and must shall account for and, in his settlement with to the state auditor, treasurer for must be charged with the full amount of all fees collected or chargeable and accruing in causes brought into the court for services rendered therein in the court up to the time of each settlement. The settlement must take place quarterly, and immediately thereafter after the settlement, the clerk must shall pay the amount found due into the treasury or to the public employees' retirement division, as provided in 3-2-404.

(2)  He must also at At the end of each quarter the clerk shall render to the state auditor treasurer, in such the form as that officer prescribes, an account in detail and under oath of all fees chargeable and accruing in causes brought into court and not included in his the clerk's previous accounts.

(3)  His The clerk's salary may not be allowed or paid until all fees so accruing for which he the clerk is chargeable have been accounted for and paid over."

Section 17.  Section 5-2-504, MCA, is amended to read:

"5-2-504.   Legislative branch consolidated. The following legislative branch entities are consolidated with the legislative council, as provided in 5-2-503 and this section, with the legislative council established by 5-11-101:

(1)  the senate and the house of representatives provided for in Article V, section 1, of the Montana constitution;

(2)  the legislative council established by 5-11-101;

(3)(2)  the legislative services division established by 5-11-111;

(4)(3)  the legislative finance committee established by 5-12-201;

(5)(4)  the legislative fiscal division established by 5-12-301;

(6)(5)  the legislative audit committee established by 5-13-201;

(7)(6)  the legislative audit division established by 5-13-301;

(8)(7)  the administrative code committee established by Title 5, chapter 14, part 1;

(9)(8)  the environmental quality council established by 5-16-101;

(10)(9) the revenue oversight committee established by 5-18-102; and

(11)(10) the committee on Indian affairs established by 5-19-102."

Section 18.  Section 5-4-307, MCA, is amended to read:

"5-4-307.   Bills remaining with the governor. (1) A bill which that has passed both houses of the legislature and has not been returned by the governor within 5 days after its delivery to him if the legislature is in session or within 25 days if the legislature is adjourned 10 days after its delivery to the governor becomes law.

(2)  The governor shall deliver the bill to the secretary of state and direct him the secretary of state to authenticate it by a certificate endorsed on or attached thereon to the bill. The form of the certificate shall must be: "This bill having remained with the governor 5 10 days, and the legislature being in session, it has become a law this .... day of ...., ....". or "This bill having remained with the governor 25 days, and the legislature being adjourned, it has become a law this .... day of ...., ....". The certificate shall must be signed by the secretary of state and deposited with the laws in his the secretary of state's office."

Section 19.  Section 5-4-308, MCA, is amended to read:

"5-4-308.   Transmittal of veto messages to legislative council services division. The governor shall transmit one copy of each veto message to the legislative council services division."

Section 20.  Section 5-5-214, MCA, is amended to read:

"5-5-214.   Interim activity. The subcommittees may perform their functions when the legislature is not in session. The personnel, data, and facilities of the legislative council services division shall must be made available to such the subcommittees."

Section 21.  Section 5-5-217, MCA, is amended to read:

"5-5-217.   Selection and assignment of interim studies. (1) Immediately following adjournment sine die, the legislative council services division shall prepare a list of study requests adopted. A copy of the list shall must be distributed to each legislator with a request that the legislator rank the study requests in the order of importance he that the legislator ascribes to them. The lists, with the priorities assigned, shall must be returned to the legislative council services division.

(2)  The legislative council shall review the priority lists returned by legislators, review estimated costs and staff assistance associated with the requested studies, and designate those studies to be assigned. In designating studies, the legislative council may combine requests as one study when the subject matter of those requests is closely related. The legislative council shall group related studies together and shall designate the number of subcommittees to be assigned studies.

(3)  The legislative council services division shall inform the committee on committees and speaker of the house of those studies that have been selected and to which joint subcommittee each study has been assigned. The committee on committees and speaker shall then proceed under 5-5-211 to appoint the subcommittees."

Section 22.  Section 5-11-203, MCA, is amended to read:

"5-11-203.   Distribution of session laws -- inspection of journals. (1) Immediately after the session laws are published, the legislative services division shall distribute them.

(2)  The legislative services division shall make the house and senate journals available for inspection or copying by the public as provided in Title 2, chapter 6, part 1. The legislative services division may publish the journals in an electronic format.

(3)  The following entities may receive the number of copies of session laws listed at no cost:

(a)  to the library of congress, eight copies;

(b)  to the state library, two copies;

(c)  to the state historical library, two copies;

(d)  to the state law librarian, four copies for the use of the library and additional copies as may be required for exchange with libraries and institutions maintained by other states and territories and public libraries;

(e)  to the library of each custodial institution, one copy;

(f)  to each Montana member of congress, each United States district judge in Montana, each of the judges of the state supreme and district courts, and each of the state officers as defined in 2-2-102(8), one copy;

(g)  to any agency, board, commission, or office of the state, other than a state officer, and to any other subdivision of the state upon request and approval by the legislative council, one copy;

(h)  to each member of the legislature, the secretary of the senate, and the chief clerk of the house of representatives from the session at which the laws were adopted, one copy;

(i)  to each of the community college districts of the state, as defined in 20-15-101, and each unit of the Montana university system, one copy;

(j)  to each county clerk, one copy for the use of the county; and

(k)  to each county attorney and to each clerk of a district court, one copy."

Section 23.  Section 5-11-210, MCA, is amended to read:

"5-11-210.   Clearinghouse for reports to legislature. (1) For the purposes of this section, "report" means a report required by law to be given to or filed with the legislature.

(2)  On or before September 1 of each year preceding the convening of a regular session of the legislature, an entity required to report to the legislature shall provide, in writing, to the executive director of the legislative council services division:

(a)  the final title of the report;

(b)  an abstract or description of the contents of the report, not to exceed 100 words;

(c)  a recommendation on how many copies of the report should be provided to the legislature;

(d)  the reasons why the number of copies recommended is, in the opinion of the reporting entity, the appropriate number of copies; and

(e)  an estimated cost for each copy of the report.

(3)  After considering all of the information available about the report, including the number of legislators requesting copies of the report pursuant to subsection (7), the legislative council or the executive director shall, in writing, direct the reporting entity to provide a specific number of copies. The number of copies required is at the sole discretion of the legislative council. The legislative council or the executive director may require the reporting entity to mail the copies of the report.

(4)  The legislative council may require that the report be submitted in an electronic format usable on the legislature's current computer hardware, in a microform, such as microfilm or microfiche, or in a CD-ROM format, meaning compact disc read-only memory.

(5)  Costs of preparing and distributing a report to the legislature, including writing, printing, postage, distribution, and all other costs, accrue to the reporting agency. Costs incurred in meeting the requirements of this section may not accrue to the legislative council services division.

(6)  The executive director of the legislative council services division shall cause to be prepared a list of all reports required to be presented to the legislature from the list of titles received under subsection (2).

(7)  The executive director shall, as soon as possible following a general election, mail to each holdover senator, senator-elect, and representative-elect a list of the titles of the reports, along with the abstracts prepared pursuant to subsection (2)(b). The list must include a form on which each member or member-elect receiving the list may indicate the report or reports that the member or member-elect would like to receive.

(8)  The executive director of the legislative council services division shall make copies of reports requested pursuant to subsection (7) available to those members or members-elect by either requiring that copies be mailed pursuant to subsection (3) or by delivering copies of the reports during the first week of the legislative session.

(9)  The executive director of the legislative council services division may keep as many copies of a report as are necessary and discard the rest.

(10) The procedure outlined in this section may also be used for a report required to be made to the legislature under the Multistate Tax Compact contained in 15-1-601, the Vehicle Equipment Safety Compact contained in 61-2-201, the Multistate Highway Transportation Agreement contained in 61-10-1101, or the Western Interstate Nuclear Compact contained in 90-5-201."

Section 24.  Section 5-11-212, MCA, is amended to read:

"5-11-212.   Fees for proceedings. (1) A complete set of the proceedings of a regular or special session of the legislature may be purchased from the legislative council services division for the amount prescribed by the legislative council. Upon receipt of payment, the executive director of the council legislative services division shall supply the purchaser with a complete set of the proceedings.

(2)  A purchaser who requests that a set of the proceedings be mailed shall pay an additional fee as prescribed by the council for each complete set that is mailed.

(3)  Single copies of bills, resolutions, or amendments thereto to bills or resolutions may be purchased from the legislative council services division for a price varying with the length of the document as prescribed by the legislative council.

(4)  Single copies of status sheets or status of proceedings may be purchased from the legislative council services division for a price per copy as prescribed by the legislative council. A person may subscribe to receive daily copies of the status sheets or status of proceedings by mail for a fee set by the legislative council to cover the costs of the service.

(5)  The executive director of the legislative council services division shall account for all funds collected under this section and shall transmit the funds to the treasurer of the state of Montana, who shall credit them to the general fund."

Section 25.  Section 5-11-213, MCA, is amended to read:

"5-11-213.   Exclusions. Each general circulation newspaper published in Montana and each radio or television station broadcasting in Montana that has registered with the executive director of the legislative council services division is exempt from 5-11-212 and shall receive one complete set of the legislative proceedings of the legislature for the ensuing biennium without charge."

Section 26.  Section 5-17-205, MCA, is amended to read:

"5-17-205.   Commission activities -- authority. The commission may:

(1)  raise money from the private sector for the ongoing historical restoration and preservation of the capitol; and

(2)  suggest capitol improvements, except changes in the location of the Montana senate chambers; and

(3)  plan for the capitol centennial event."

Section 27.  Section 5-18-107, MCA, is amended to read:

"5-18-107.   Powers and duties of committee -- duty to review revenue rules -- legislative oversight of department of revenue -- committee reports -- revenue estimating and use of estimates -- coal tax oversight. (1) The committee shall review all proposed rules of the department of revenue filed with the secretary of state.

(2)  The committee may:

(a)  request and obtain the department's rulemaking records for the purpose of reviewing compliance with 2-4-305;

(b)  prepare written recommendations for the adoption, amendment, or rejection of a rule and submit the recommendations to the department;

(c)  submit oral or written testimony at a rulemaking hearing;

(d)  require the department to appear before the committee and respond to the committee's recommendations for the adoption, amendment, or rejection of a rule;

(e)  require that a rulemaking hearing be held in accordance with the provisions of 2-4-302 through 2-4-305;

(f)  recommend to the legislature the repeal, amendment, or adoption of a rule as provided in 2-4-412;

(g)  institute, intervene in, or otherwise participate in proceedings involving the legality of a rule under the Montana Administrative Procedure Act in the state and federal courts and administrative agencies;

(h)  review the incidence and conduct of the department's administrative proceedings;

(i)  require the department to publish the full or partial text of any pertinent material adopted by reference under 2-4-307;

(j)  by an affirmative vote of at least six members of the committee, contract for the preparation of an economic impact statement or require the department to prepare an economic impact statement, following the provisions of 2-4-405;

(k)  petition the department to promulgate, amend, or repeal a rule. Within 60 days after submission of a petition, the department shall either deny the petition in writing, stating its reasons for the denial, or shall initiate rulemaking proceedings in accordance with 2-4-302 through 2-4-305.

(l)  make written objection to a proposed rule of the department for lack of substantial compliance with 2-4-302 through 2-4-305. The provisions of 2-4-406 govern the objection procedure, the department's response, and the procedure for and effect of publication of the objection in the Montana Administrative Register and the Administrative Rules of Montana.

(m)  petition the department for a declaratory ruling as to the applicability of any statutory provision or of any rule or order of the department. A copy of a declaratory ruling must be filed with the secretary of state for publication in the register. A declaratory ruling or the refusal to issue a ruling is subject to judicial review in the same manner as decisions or orders in contested cases under the Montana Administrative Procedure Act.

(n)  petition for judicial review of the sufficiency of the reasons for the department's finding of imminent peril to the public health, safety, or welfare, cited in support of an emergency or temporary rule proposed by the department under 2-4-303; and

(o)  require the department to conduct the biennial review of its rules as required in 2-4-314 and report its findings to the committee.

(3)  The committee shall exercise legislative oversight of the department of revenue, including without limitation the review of:

(a)  proposed budgets;

(b)  proposed legislation;

(c)  pending litigation; and

(d)  major contracts and personnel actions of the department.

(4)  The committee may investigate and issue reports on any matter concerning taxation or the department of revenue.

(5)  (a) The committee shall have prepared by December 1 for introduction during each regular session of the legislature in which a revenue bill is under consideration an estimate of the amount of revenue projected to be available for legislative appropriation.

(b)  The committee's estimate, as introduced in the legislature, constitutes the legislature's current revenue estimate until amended or until final adoption of the estimate by both houses. It is intended that the legislature's estimates and the assumptions underlying the estimates will be used by all agencies with responsibilities for estimating revenues or costs, including the preparation of fiscal notes.

(c)  The legislative council services division shall provide staff assistance to the committee. The committee may request the assistance of the staffs of the office of the legislative fiscal analyst, the legislative auditor, the department of revenue, and any other agency that has information regarding any of the tax or revenue bases of the state.

(6)  The committee may:

(a)  review the programs financed by coal severance tax funds;

(b)  consider any matters relating to coal taxation; and

(c)  prepare for the legislature a report, as provided in 5-11-210, on potential uses of the coal tax trust fund to develop a stable, strong, and diversified Montana economy that meets the needs of present and future generations of Montanans while maintaining and improving a clean and healthful environment as required by Article IX, section 1, of the Montana constitution."

Section 28.  Section 5-22-101, MCA, is amended to read:

"5-22-101.   Legislative oversight committee -- appointment -- staff assistance. (1) (a) There is a joint oversight committee on children and families. The oversight committee is composed of eight members who are appointed as follows:

(i)  four members of the house of representatives, not more than two of whom may be from one political party, appointed by the speaker of the house; and

(ii) four members of the senate, not more than two of whom may be from one political party, appointed by the committee on committees.

(b)  The members appointed under subsection (1)(a) must include representatives from the house appropriations subcommittee on human services and aging and the senate finance and claims subcommittee on human services and aging.

(2)  In case of a vacancy, a replacement must be selected in the manner of the original appointment.

(3)  Members are entitled to salary and expenses as provided in 5-2-302.

(4)  The oversight committee may request staff assistance from the legislative council services division, which assistance may be provided within limits established by the legislative council, given other priorities and responsibilities.

(5)  Each state agency that provides services or funding for a program or service for children and families shall provide assistance and information upon request of the oversight committee."

Section 29.  Section 7-1-114, MCA, is amended to read:

"7-1-114.   Mandatory provisions. (1) A local government with self-government powers is subject to the following provisions:

(a)  All all state laws providing for the incorporation or disincorporation of cities and towns; for the annexation, disannexation, or exclusion of territory from a city or town; for the creation, abandonment, or boundary alteration of counties; and for city-county consolidation;

(b)  Sections 7-3-104 through 7-3-106, 7-3-111 through 7-3-114, and 7-3-1101 through 7-3-1105 Title 7, chapter 3, part 1;

(c)  All all laws establishing legislative procedures or requirements for units of local government;

(d)  All all laws regulating the election of local officials;

(e)  All all laws which that require or regulate planning or zoning;

(f)  Any any law directing or requiring a local government or any officer or employee of a local government to carry out any function or provide any service;

(g)  Any any law regulating the budget, finance, or borrowing procedures and powers of local governments, except that the mill levy limits established by state law shall do not apply;

(h)  Title 70, chapters 30 and 31.

(2)  These provisions are a prohibition on the self-government unit acting other than as provided."

Section 30.  Section 7-2-2218, MCA, is amended to read:

"7-2-2218.   Form of ballot. (1) If the proposed new county is to be formed from one county, or from portions of two or more existing counties, the ballot shall must be in the following form:

(a)  proclamation and notice required by 7-2-2215 shall must require the electors to cast ballots which shall that contain the words "For the new county of .... (giving the name of the proposed new county) -- Yes" and "For the new county of .... (giving the name of the proposed new county) -- No".

(b)  The ballots shall must also contain the names of individuals to be voted for to fill the various elective offices designated in the proclamation notice for counties of the class to which the proposed county will belong, as determined by the board of county commissioners, as herein otherwise provided in this part.

(c)  There shall must also be printed upon the ballot the words "For the county seat" and the names of all cities or towns which that may have filed with the election administrator a petition, signed by at least 25 registered electors, nominating any city or town within the proposed new county for the county seat. The elector shall designate his the elector's choice for county seat by marking a cross (X) opposite the name of the city or town for which he the elector desires to cast his ballot a vote.

(2)  If the proposed new county is to be an existing county enlarged by territory taken from one or more other counties, the proclamation and notice required by 7-2-2215(1) shall must require the electors to cast ballots which shall that must contain the legal description of the territory to be taken from the county in which the election is held, together with any name or names for the territory that may be in common use, and the words "For the territory described (or commonly known as ....) to be detached from .... County and added to .... County -- Yes" and "For the territory described (or commonly known as ....) to be detached from .... County and added to .... County -- No"."

Section 31.  Section 7-2-2219, MCA, is amended to read:

"7-2-2219.   Conduct of election. (1) (a) The board issuing the proclamation and notice of election pursuant to 7-2-2215 shall cause require the county election administrator to furnish to the election judges of each precinct in the proposed new county all election supplies and equipment necessary to conduct the election and which that are not specifically directed to be furnished by the election administrator of another county or counties.

(b)  The election administrator of each county from which territory is taken for the proposed new county shall, not less than 5 days before the date of the election, furnish for each precinct within the proposed new county a precinct register for the precincts of the proposed new county which that are within their respective counties.

(2)  The elections provided for in 7-2-2215 shall be are governed and controlled by the general election laws of the state, so far as to the extent that the same general election laws are applicable and except as otherwise provided herein in this section. The provisions of the election laws relating to preparation, printing, and distribution of sample ballots, except the provisions of these laws relating to primary elections in this state, apply to any election provided for in this part. All returns of an election shall must be made to and canvassed by the board of county commissioners calling the election.

(3)  All nominations of candidates for offices required to be filled at the election shall must be made in the manner provided by law for the nomination of candidates by petition."

Section 32.  Section 7-4-2106, MCA, is amended to read:

"7-4-2106.   Vacancy on board of county commissioners. (1) For the purposes of this part, "vacancy" has the same meaning as prescribed in 2-16-501.

(2)  Whenever a vacancy occurs in the board of county commissioners from a failure to elect or otherwise, the remaining county commissioners must shall fill the vacancy, and such the appointee shall hold office until the next general election unless otherwise provided in subsection (3) or (4). The procedure to be used to fill the vacancy is as follows:

(a)  If the former incumbent represented a party eligible for a primary election under 13-10-601, the county central committee of that party shall submit to the remaining commissioners three names of people who have lived in the unrepresented district for at least 2 years preceding the day the vacancy occurs, and the. The remaining commissioners shall appoint one of these three to fill the vacancy. Whenever the remaining commissioners are unable to elect an appointee from the submitted list, they shall request a second list of three names from the county central committee. The second list may not contain any of the names submitted on the first list. The remaining commissioners shall then select an appointee from the individuals named on both lists.

(b)  If the former incumbent was independent or was originally nominated by a party that does not meet the requirements of 13-10-601 or if the vacancy occurs from a failure to elect, the remaining commissioners shall invite applications for the vacancy in a notice published as provided in 13-1-108 and shall accept an application from any person who has lived in the unrepresented district for at least 2 years preceding the day the vacancy occurs. The remaining commissioners shall appoint one of these applicants to fill the vacancy.

(3)  Whenever a vacancy occurs 75 days or more before the general election held during the second or fourth year of the term, an individual shall must be elected to complete the term at that general election. The election procedure to be used to elect the successor is as follows:

(a)  Whenever the vacancy occurs 75 days or more before the primary election during the second or fourth year of the term, the same procedure shall be utilized must be used as is used to elect county commissioners to full 6-year terms.

(b)  Whenever the vacancy occurs after the 75th day preceding the primary election, any political party desiring to enter a candidate in the general election shall select a candidate as provided in 13-38-204. A political party shall notify the clerk and recorder of the party nominee. A person desiring to be a candidate as an independent shall follow the procedures provided in 13-10-501 and 13-10-502. The petition for an independent candidate shall must be filed with the clerk and recorder on or before the 75th day prior to the general election. A candidate for a nonpartisan office shall file as provided in Title 13, chapter 14.

(4)  Whenever a vacancy occurs after the 75th day preceding the general election held during the fourth year of the term, the person appointed by the remaining county commissioners under 7-4-2106(2) subsection (2) shall serve until the end of the term."

Section 33.  Section 7-4-2206, MCA, is amended to read:

"7-4-2206.   Vacancies. (1) For the purposes of this part, "vacancy" has the same meaning as prescribed in 2-16-501.

(2)  Vacancies in all county offices, except that of county commissioner, shall must be filled by appointment by the board of county commissioners. Except for the justice of the peace, the appointee shall hold his holds the office, if elective, until the next general election unless otherwise provided in subsection (3) or (4), and if not elective, the appointee serves at the pleasure of the commissioners.

(3)  Whenever a vacancy occurs 75 days or more before the general election held during the second year of the term, an individual shall must be elected to complete the term at that general election. The election procedure to be used to elect the successor is as follows:

(a)  Whenever the vacancy occurs 75 days or more before the primary election during the second year of the term, the same procedure shall be utilized must be used as is used to elect a person to that office for a full 4-year term.

(b)  Whenever the vacancy occurs after the 75th day preceding the primary election, any political party desiring to enter a candidate in the general election shall select a candidate as provided in 13-38-204. A political party shall notify the clerk and recorder of the party nominee. A person desiring to be a candidate as an independent shall follow the procedures provided in 13-10-501 and 13-10-502. The petition for an independent candidate shall must be filed with the clerk and recorder on or before the 75th day prior to the general election. A candidate for a nonpartisan office shall file as provided in Title 13, chapter 14.

(4)  Whenever a vacancy occurs after the 75th day preceding the general election held during the second year of the term, the person appointed by the commissioners under 7-4-2206(2) subsection (2) shall serve until the end of the term.

(5)  Vacancies occurring in the office of justice of the peace shall must be filled as provided in Title 3, chapter 10, part 2."

Section 34.  Section 7-6-2531, MCA, is amended to read:

"7-6-2531.   County may exceed maximum mill levy -- election required. The governing body of a county may raise money by taxation for the support of county government services, facilities, or other capital projects in excess of the levy or levies allowed by law under the following conditions:

(1)  The governing body shall pass a resolution indicating its intent to exceed the current statutory mill levy on the approval of a majority of the qualified electors voting in an election under subsection (2). The resolution must include:

(a)  the specific purpose for which the additional money will be used;

(b)  the specific amount to be raised;

(c)  the approximate number of mills required; and

(d)  the specific mill levy limitation to be exceeded.

(2)(a)  Except as provided in subsection (2)(b), the governing body shall submit the question of the additional mill levy to the qualified electors of the county at the next regular primary election held in an even-numbered year.

(b)  If the purpose of the special levy designated pursuant to subsection (1)(a) is for the support of a hospital health care facility as described in 7-6-2512, the governing body may submit the question of the additional mill levy to the qualified electors of the county at a general election, at a school election held pursuant to 20-3-304, or at a regular primary election held in an even-numbered year.

(c) If the majority voting on the question are in favor of the additional levy or levies, the governing body is authorized to exceed the statutory mill levy limit in the amount specified in the resolution for a period not to exceed 2 years."

Section 35.  Section 7-7-4602, MCA, is amended to read:

"7-7-4602.   Definitions. As used in this part, unless the context indicates otherwise, the following definitions apply:

(1)  "Enterprise" means any work, undertaking, or project which that the municipality is authorized to construct and from which the municipality derives revenues, revenue for the refinancing or the refinancing and improving of which enterprise refunding bonds are issued under this part; and such. The enterprise includes all incidental or connected improvements, betterments, extensions, and replacements, thereto and all appurtenances, facilities, lands, rights in land, water rights, franchises, and structures in connection therewith or incidental thereto.

(2)  "Federal agency" means the United States, the president of the United States, the federal emergency administrator of public works, or any agency, instrumentality, or corporation of the United States designated or created by or pursuant to any act or joint resolution of the congress of the United States or directly or indirectly owned or controlled by the United States.

(3)(2)  "Governing body" means, in the case of a city or town, the council, commission, or other body, board, officer, or officers having charge of the finances thereof of the city or town.

(4)(3)  "Holder of bonds" or "bondholder" (or any similar term) means any a person who is the bearer of any outstanding refunding bond, registered to bearer or not registered, or the registered owner of any such outstanding bond which that is at the time registered other than to bearer.

(5)(4)  "Improving" means reconstructing, replacing, extending, repairing, bettering, equipping, developing, or embellishing, or improving or any one or more of the foregoing.

(6)(5)  "Law" means any act or statute (general, special, or local) of this state, including without being but not limited to the charter of any municipality.

(7)(6)  "Municipality" means any city or town of this state.

(8)(7)  "Refinancing" means funding, refunding, paying, or discharging, by means of refunding bonds or the proceeds received from the sale thereof of refunding bonds, all or any part of any notes, bonds, or other obligations issued to finance or to aid in financing the acquisition, construction, or improving of an enterprise and payable solely from all or any part of the revenues thereof revenue of the refunding bonds, including interest thereon on the refunding bonds in arrears or about to become due, whether or not represented by coupons or interest certificates.

(9)(8)  "Refunding bonds" means notes, bonds, certificates, or other obligations of a municipality issued pursuant to this part or pursuant to any other law as supplemented by or in conjunction with this part.

(10)(9) "Revenues" "Revenue" means all fees, tolls, rates, rentals, and charges to be levied and collected in connection with an enterprise and all other income and receipts of whatever kind or character derived by the municipality from the operation of any an enterprise or arising from any an enterprise."

Section 36.  Section 7-13-4311, MCA, is amended to read:

"7-13-4311.   Authorization to furnish water and sewer services to industrial consumers. (1) Subject to the provisions of subsection (2), the city or town council of any city or town within Montana that owns and operates a municipal water system, and/or a municipal sewage system, or both, to furnish water services, and/or sewage services, or both, to the inhabitants of such the city or town as a public utility shall may, in addition to all other powers, have power to furnish water from such the water system and sewage services from such the sewage system:

(a)  to any person, factory, or other industry located within the corporate limits of such the city or town; or

(b)  to any person, factory, or other industry located outside the corporate limits of such the city or town.

(2)  (a) The services authorized by subsection (1) shall must be furnished at reasonable rates, filed by the city or town council and approved by the public service commission.

(b)  Delivery of water and delivery of sewage services by any such a city or town to or for the use of any person, factory, or other industry located outside the corporate limits of such the city or town shall must be made within or at the boundary line of the corporate limits of such the city or town or from any existing waterline or sewerline of such the city or town located outside of the corporate limits of such the city or town, except as hereinafter provided in this part."

Section 37.  Section 7-14-4736, MCA, is amended to read:

"7-14-4736.   Participation by municipality. If the municipality is willing to participate in the cost of leasing, improving, operating, or maintaining the offstreet parking sites in an improvement district established pursuant to 7-14-4731, the governing body may by resolution summarily order such the participation, and the amount of any such participation shall is not be subject to the limitations of 7-12-4102, 7-12-4103, and 7-12-4132."

Section 38.  Section 7-16-2105, MCA, is amended to read:

"7-16-2105.   Acquisition of land by county for public recreational or cultural purposes. (1) The counties of this state are authorized to acquire, by purchase, grant, deed, gift, devise, condemnation, or otherwise, lands suitable for public camping, public recreational purposes, civic centers, youth centers, museums, recreational centers, and any combination thereof or may lease the land tracts, each of which must be situated as to offer ready access to a public highway.

(2)  This section may not be construed as amending or repealing 7-16-2201 through 7-16-2204 7-16-2203."

Section 39.  Section 7-16-4222, MCA, is amended to read:

"7-16-4222.   Rules to implement part. (1) In addition to the powers and duties established in the ordinance creating the board of park commissioners and the provisions of 7-16-4223 and 7-16-4225 through 7-16-4228, the board of park commissioners has the following powers and duties:

(a)  to make all rules necessary or convenient to protect and promote the growth of trees and plants in parks, streets, avenues, alleys, boulevards, and public places under the care and control of the board and for the protection of all birds inhabiting, frequenting, or nesting in the parks, streets, avenues, boulevards, and public places;

(b)  to make all rules for the use of parks by the public; and

(c)  to provide penalties for the violation of the rules.

(2)  The rules authorized by this section have the force of city ordinances and may be enforced as ordinances of the city are enforced."

Section 40.  Section 7-32-2244, MCA, is amended to read:

"7-32-2244.   Detention of juveniles. Juveniles may be held in a detention center only in accordance with 41-5-301 through 41-5-307, 41-5-309, and 41-5-311 Title 41, chapter 5, part 3."

Section 41.  Section 7-34-2201, MCA, is amended to read:

"7-34-2201.   Erection and management of county health care facilities -- definition -- provision of health care services. (1) The board of county commissioners has jurisdiction and power, under the limitations and restrictions prescribed by law, to erect, furnish, equip, expand, improve, and maintain health care facilities and to provide health care services in those facilities as permitted by law.

(2)  The board of county commissioners of a county that has or may acquire title to a site and building or buildings suitable for county health care purposes has jurisdiction and power, under the limitations and restrictions prescribed by law, to erect, furnish, equip, expand, improve, maintain, and operate the building or buildings for health care purposes as provided by this section.

(3)  As used in parts 21, 23, 24, and 25 and this part, unless the context clearly requires otherwise, the term "health care facility" means a hospital, a medical assistance facility, an ambulatory surgical facility, a hospice, a kidney treatment center an end-stage renal dialysis facility, an outpatient facility, a public health center, a rehabilitation facility, a long-term care facility, or an adult day-care center, as defined in 50-5-101, or any combination and related medical facilities including offices for physicians or other health care professionals providing outpatient, rehabilitative, emergency, nursing, or preventive care."

Section 42.  Section 10-2-416, MCA, is amended to read:

"10-2-416.   Pledge to continue operation and maintenance. Pursuant to 38 U.S.C. 641 and 5035(a)(6) 8134 and 8135(a)(6), the state shall appropriate funds either from the general fund or from funds generated under 16-11-111 to the department of public health and human services for financial support necessary to provide for continued operation and maintenance of the state home for veterans in eastern Montana. The department of public health and human services may contract with a private vendor to provide for the operation of the eastern Montana veterans' home and may charge the contract vendor a rental fee for the maintenance and upkeep of the facility."

Section 43.  Section 10-3-207, MCA, is amended to read:

"10-3-207.   Text of compact. The interstate mutual aid compact referred to in 10-3-204 and 10-3-205 reads as follows:

INTERSTATE MUTUAL AID COMPACT

Article I

The purpose of this compact is to provide voluntary assistance among participating states in responding to any disaster or imminent disaster that overextends the ability of local and state governments to reduce, counteract, or remove the danger. Assistance may include but is not limited to rescue, fire, police, medical, communication, and transportation services and facilities to cope with problems which require use of special equipment, trained personnel, or personnel in large numbers not locally available.

Article II

Article I, section 10, of the Constitution of the United States permits a state to enter into an agreement or compact with another state, subject to the consent of congress. Congress, through enactment of 50 U.S.C. 2281(g) and 2283 (now repealed) and the executive branch, by issuance of Executive Orders No. 10186 of December 1, 1950, encourages the states to enter into emergency, disaster, and civil defense mutual aid agreements or pacts.

Article III

It is agreed by participating states that the following conditions will guide implementation of the compact:

(1)  Participating states through their designated officials are authorized to request and receive assistance from a participating state. Requests will be granted only if the requesting state is committed to the mitigation of the emergency and other resources are not immediately available.

(2)  Requests for assistance may be verbal or in writing. If the request is made by other than written communication, it must be confirmed in writing as soon as practical after the request. A written request shall provide an itemization of equipment and operators, types of expertise, and personnel or other resources needed. Each request must be signed by an authorized official.

(3)  Personnel and equipment of the aiding state made available to the requesting state shall, whenever possible, remain under the control and direction of the aiding state. The activities of personnel and equipment of the aiding state must be coordinated by the requesting state.

(4)  An aiding state has the right to withdraw some or all of its personnel and equipment whenever the personnel and equipment are needed by that state. Notice of intention to withdraw should be communicated to the requesting state as soon as possible.

Article IV

(1)  The requesting state shall reimburse the aiding state as soon as possible after the receipt by the requesting state of an itemized voucher requesting reimbursement of costs.

(2)  Any state rendering aid pursuant to this compact must be reimbursed by the state receiving such aid for any damage to, loss of, or expense incurred in the operation of any equipment used in responding to a request for aid, and for the cost incurred in connection with such requests.

(3)  Any state rendering aid pursuant to this compact must be reimbursed by the state receiving such aid for the cost of compensation and death benefits to injured officers, agents, or employees and their dependents or representatives if such officers, agents, or employees sustain injuries or are killed while rendering aid pursuant to this arrangement and such payments are made in the same manner and on the same terms as if the injury or death were sustained within the aiding state.

Article V

(1)  All privileges and immunities from liability, exemptions from law, ordinances, and rules and all pension, disability relief, workers' compensation, and other benefits that apply to the activity of officers, agents, or employees when performing their respective functions within the territorial limits of their respective political subdivisions apply to them to the same extent while engaged in the performance of any of their functions and duties extraterritorially under the provisions of this compact.

(2)  All privileges and immunities from liability, exemptions from law, ordinances, and rules and workers' compensation and other benefits that apply to duly enrolled or registered volunteers when performing their respective functions at the request of their state and within its territorial limits apply to the same extent while performing their functions extraterritorially under the provisions of this compact. Volunteers may include but are not limited to physicians, surgeons, nurses, dentists, structural engineers, and trained search and rescue volunteers.

(3)  The signatory states, their political subdivisions, municipal corporations, and other public agencies shall hold harmless the corresponding entities and personnel thereof from the other state with respect to the acts and omissions of its own agents and employees that occur while providing assistance pursuant to the common plan.

(4)  Nothing in this arrangement may be construed as repealing or impairing any existing interstate mutual aid agreements.

(5)  Upon enactment of this compact by two or more states, and annually by each January 1 thereafter, the participating states will exchange with each other the names of officials designated to request and provide services under this arrangement. In accordance with the cooperative nature of this arrangement, it is permissible and desirable for the states to exchange operational procedures to be followed in requesting assistance and reimbursing expenses.

(6)  This compact becomes effective and is binding upon the states so acting when it has been enacted into law by any two states. Thereafter, this compact becomes effective and binding as to any other state upon similar action by such state.

(7)  This compact remains binding upon a party state until it enacts a law repealing the compact and providing for the sending of formal written notice of withdrawal from the compact to the appropriate officials of all other party states. An actual withdrawal may not take effect until the 30th consecutive day after the notice has been sent. Such withdrawal does not relieve the withdrawing state from its obligations assumed under this compact prior to the effective date of withdrawal."

Section 44.  Section 10-3-501, MCA, is amended to read:

"10-3-501.   Policy of state. (1) The legislature recognizes that an enemy attack upon the United States is a possibility; that such an attack might be of unprecedented size and destructiveness; that a considerable period of time may elapse after an enemy attack before federal operational control over the management of resources can be instituted; and that federal planning and activities with respect to postattack recovery and rehabilitation necessarily are predicated on the ability of the states and their political subdivisions to prepare for and respond promptly to the problems created by an enemy attack. Therefore, it is hereby found and declared to be necessary to confer upon the governor and upon the executive heads of governing bodies of political subdivisions of this state the emergency powers provided for in this part.

(2)  It is further declared to be the purpose of this part and the policy of this state that all resource management functions of this state be coordinated to the maximum extent with the comparable functions of the federal government, of other states and localities, and of private agencies to the end that the most effective preparation and use may be made of available manpower, resources, and facilities in an emergency."

Section 45.  Section 10-3-504, MCA, is amended to read:

"10-3-504.   Emergency resource management plan. The plan shall must provide an emergency organization and emergency administrative policies and procedures for the conservation, allocation, distribution, and use of essential resources available to the state following a civil defense emergency such as an attack upon the United States. It shall be The plan is supplemental to the national plan for emergency preparedness adopted by the president of the United States and shall become becomes operative upon the establishment of a civil defense emergency. To the extent that the federal government is either incapable of or not prepared to conduct its emergency resources management program, the state emergency resources management plan will substitute for and replace the federal program until such the time as that the federal program becomes effective in the state."

Section 46.  Section 10-4-101, MCA, is amended to read:

"10-4-101.   Definitions. As used in this chapter, unless the context requires otherwise, the following definitions apply:

(1)  "Account" means the 9-1-1 emergency telecommunications account established in 10-4-301.

(2)  "Department" means the department of administration provided for in Title 2, chapter 15, part 10.

(3)  "Direct dispatch method" means a 9-1-1 service in which a public safety answering point, upon receipt of a telephone request for emergency services, provides for a decision as to the proper action to be taken and for dispatch of appropriate emergency service units.

(4)  "Emergency" means any an event that requires dispatch of a public or private safety agency.

(5)  "Emergency services" means services provided by any a public or private safety agency, including law enforcement, firefighting, ambulance or medical services, and civil defense services.

(6)  "Exchange access services" means:

(a)  telephone exchange access lines or channels that provide local access from the premises of a subscriber in this state to the local telecommunications network to effect the transfer of information; and

(b)  unless a separate tariff rate is charged therefor, any facility or service provided in connection with the services described in subsection (6)(a).

(7)  "Local government" means any city, county, or political subdivision of the state and its agencies.

(8)(7)  "Minimum 9-1-1 service" means a telephone service meeting the standards established in 10-4-102 that automatically connects a person dialing the digits 9-1-1 to an established public safety answering point. "Minimum 9-1-1 services" includes equipment for connecting and outswitching 9-1-1 calls within a telephone central office, trunking facilities from the central office to a public safety answering point, and equipment, as appropriate, for transferring the call to another point, when appropriate.

(9)(8)  A "9-1-1 jurisdiction" means a group of public or private safety agencies who operate within or are affected by one or more common central office boundaries and who have agreed in writing to jointly plan a 9-1-1 emergency telephone system.

(10)(9) "Private safety agency" means any entity, except a public safety agency, providing emergency fire, ambulance, or medical services.

(11)(10) "Provider" means a public utility, cooperative telephone company, or any other entity that provides telephone exchange access services.

(12)(11) "Public safety agency" means the state and any city, county, city-county consolidated government, municipal corporation, chartered organization, public district, or public authority located in whole or in part within this state that provides or has authority to provide emergency services.

(13)(12) "Public safety answering point" means a communications facility operated on a 24-hour basis that first receives 9-1-1 calls from persons in a 9-1-1 service area and which that may, as appropriate, directly dispatch public or private safety services or transfer or relay 9-1-1 calls to appropriate public safety agencies.

(14)(13) "Relay method" means a 9-1-1 service in which a public safety answering point, upon receipt of a telephone request for emergency services, notes the pertinent information from the caller and relays such the information to the appropriate public safety agency, other agencies, or other providers of emergency services for dispatch of an emergency unit.

(15)(14) "Subscriber" means an end user who receives telephone exchange access services.

(16)(15) "Transfer method" means a 9-1-1 service in which a public safety answering point, upon receipt of a telephone request for emergency services, directly transfers such a the request to an appropriate public safety answering agency or other provider of emergency services."

Section 47.  Section 10-4-301, MCA, is amended to read:

"10-4-301.   Establishment of emergency telecommunications account. A 9-1-1 emergency telecommunications account is established in the state special revenue fund in the state treasury. All money received by the department of revenue pursuant to 10-4-201 must be paid to the state treasurer for deposit in the account. After payment of refunds pursuant to 10-4-205, the balance of the account must be used for the purposes described in part 1 of this chapter. The distribution of the 9-1-1 emergency telecommunications account, according to the requirements of 10-4-302, is statutorily appropriated as provided in 17-7-502. Expenditures for actual and necessary expenses required for the efficient administration of the plan must be made from temporary appropriations, as described in 17-7-501(1) or (2), made for that purpose."

Section 48.  Section 13-13-276, MCA, is amended to read:

"13-13-276.   Legislative findings and purpose. The legislature finds that the increased use of facsimile transmissions has encouraged the possibility of absentee voter registration and the sending and receiving of absentee ballots by facsimile. The legislature also finds that while federal law encourages but does not require the use of facsimile transmissions in federal elections, there are is sufficient reliability in facsimile technology and there is sufficient evidence that absentee facsimile voting would be of benefit to electors in the United States service, to provide for absentee registration and voting by facsimile. It is the purpose of 13-13-276 through 13-13-279 13-13-278 to allow for absentee voter registration and voting by facsimile, while recognizing that state and local election officials have the responsibility to maintain the accuracy, integrity, and secrecy of the election process and the individual election ballot. It is the purpose of the legislature to allow facsimile voting for electors in the United States service but to continue to ensure that voting security is maintained for the ultimate purpose of preventing election fraud and maintaining the validity of the election process."

Section 49.  Section 13-13-278, MCA, is amended to read:

"13-13-278.   Adoption of rules -- acceptance of funds. (1) The secretary of state shall adopt reasonable rules under the rulemaking provisions of the Montana Administrative Procedure Act to implement 13-13-277. The rules are binding upon election administrators. The rules must require compliance with the same time requirements or deadlines as for registration and voting by absentee ballot by use of the public mails, except that the rules may provide for different times for the acceptance of facsimile ballots after the closing of the polls. The rules must maintain the accuracy, integrity, and secrecy of the ballot process and must allow registration and voting by facsimile through use of a private corporation or other private entity for transmission of facsimile messages only if the secretary of state finds that the use is essential to the purposes of 13-13-276 through 13-13-279 13-13-278.

(2)  The secretary of state may apply for and receive a grant of funds from any agency or office of the United States government or from any other public or private source and may use the money for the purpose of implementing 13-13-276 through 13-13-279 13-13-278."

Section 50.  Section 13-25-106, MCA, is amended to read:

"13-25-106.   Compensation of electors. Electors shall must receive the same pay and mileage that is allowed to members of the legislature. Payments shall must be certified by the secretary of state and paid by the state auditor treasurer from the state general fund."

Section 51.  Section 13-27-202, MCA, is amended to read:

"13-27-202.   Recommendations -- approval of form required. (1) Before submission of a sample sheet to the secretary of state pursuant to subsection (3), the following requirements must be fulfilled:

(a)  The text of the proposed measure must be submitted to the legislative services division for review.

(b)  The legislative services division staff shall review the text for clarity, consistency, and any other factors that the council staff considers when drafting proposed legislation.

(c)  Within 14 days after submission of the text, the legislative services division staff shall make to the person submitting the text written recommendations for changes in the text or a statement that no changes are recommended.

(d)  The person submitting the text shall consider the recommendations and respond in writing to the legislative services division, accepting, rejecting, or modifying each of the recommended changes. If no changes are recommended, no response is required.

(2)  The legislative services division shall furnish a copy of the correspondence provided for in subsection (1) to the secretary of state, who shall make a copy of the correspondence available to any person upon request.

(3)  Before a petition may be circulated for signatures, a sample sheet containing the text of the proposed measure must be submitted to the secretary of state in the form in which it will be circulated. The sample petition may not be submitted to the secretary of state more than 1 year prior to the final date for filing the signed petition with the secretary of state. The secretary of state shall refer a copy of the petition sheet to the attorney general for approval. The secretary of state and attorney general shall each review the petition for sufficiency as to form and approve or reject the form of the petition, stating the reasons for rejection, if any. The secretary of state or the attorney general may not reject the petition solely because the text contains material not submitted to the legislative services division unless the material not submitted to the legislative services division is a substantive change not suggested by the legislative services division.

(4)  The secretary of state shall review the comments and statements of the attorney general received pursuant to 13-27-312 and make a final decision as to the approval or rejection of the form of the petition. The secretary of state shall send written notice to the person who submitted the petition sheet of the approval or rejection within 28 days after submission of the petition sheet. If the petition is rejected, the notice must include reasons for rejection.

(5)  A petition with technical defects in form may be approved with the condition that those defects will be corrected before the petition is circulated for signatures.

(6)  The secretary of state shall upon request provide the person submitting the petition with a sample petition form, including the text of the proposed measure, the statement of purpose, and the statements of implications, all as approved by the secretary of state and the attorney general. The petition may be circulated in the form of the sample prepared by the secretary of state."

Section 52.  Section 13-37-106, MCA, is amended to read:

"13-37-106.   Salary. The commissioner of political practices is entitled to receive a an annual salary of $30,303 in fiscal year 1992 and $31,551 in fiscal year 1993 and thereafter."

Section 53.  Section 13-37-128, MCA, is amended to read:

"13-37-128.   Cause of action created. (1) Except as provided in 13-37-306, any A person who intentionally or negligently violates any of the reporting provisions of this chapter, shall be is liable in a civil action brought by the commissioner or a county attorney pursuant to the provisions outlined in 13-37-124 and 13-37-125 for an amount up to $500 or three times the amount of the unlawful contributions or expenditures, whichever is greater.

(2)  Any A person who makes or receives a contribution or expenditure in violation of 13-35-225, 13-35-227, 13-35-228, or this chapter is liable in a civil action brought by the commissioner or a county attorney pursuant to the provisions outlined in 13-37-124 and 13-37-125 for an amount up to $500 or three times the amount of the unlawful contribution or expenditure, whichever is greater."

Section 54.  Section 13-37-130, MCA, is amended to read:

"13-37-130.   Limitation of action. No An action may not be brought under 13-37-128 and 13-37-129 more than 4 years after the occurrence of the facts which that give rise to the action. No more than one judgment against a particular defendant may be had on a single state of facts. The civil action created in 13-37-128 and 13-37-129 shall be is the exclusive remedy for violation of the contribution, expenditure, and reporting provisions of this chapter, except as provided in 13-37-306. These provisions are not subject to the misdemeanor penalties of 13-35-103 but may be a ground for contest of election or removal from office as provided in 13-35-106(3) and Title 13, chapter 36."

Section 55.  Section 15-1-521, MCA, is amended to read:

"15-1-521.   Property valuation improvement fund. There is an account in the state special revenue fund to be used by the department for increasing the efficiency of the property appraisal, assessment, and taxation process through improvements in technology and administration. The department shall deposit fees collected pursuant to 2-6-110(4)(3) in the account."

Section 56.  Section 15-1-704, MCA, is amended to read:

"15-1-704.   Filing with district court. (1) After issuing a warrant, the department may file the warrant with the clerk of a district court. The clerk shall file the warrant in the judgment docket, with the name of the taxpayer listed as the judgment debtor.

(2)  A copy of the filed warrant may be sent by the department to the sheriff or agent authorized to collect the tax.

(3)  A judgment lien filed pursuant to this section may be renewed for another 10-year period pursuant to the provisions of methods provided in 25-13-102."

Section 57.  Section 15-7-303, MCA, is amended to read:

"15-7-303.   Definitions. As used in this part, the following definitions apply:

(1)  "Partial interest" means a percentage interest in property when less than 100%.

(2)(1)  "Person" means and includes an individual, corporation, partnership, or other business organization, trust, fiduciary, or agent or any other party presenting a document for recordation.

(3)(2)  "Real estate" includes:

(a)  land;

(b)  growing timber;

(c)  buildings, structures, fixtures, fences, and improvements affixed to land.

(4)(3)  "Transfer" means an act of the parties or of the law by which the title to real property is conveyed from one person to another.

(5)(4)  "Value" means the amount of the full actual consideration therefor for real estate paid or to be paid, including the amount of any lien or liens thereon on the real estate."

Section 58.  Section 15-8-104, MCA, is amended to read:

"15-8-104.   Department audit and review of taxable value -- costs paid by department. (1) When in the judgment of the director of revenue it is necessary, audits may be made for the purpose of determining the taxable value of net proceeds of mines and oil and gas wells and all other types of property subject to ad valorem taxation.

(2)  The department may conduct reviews of the assessment of all commercial personal property to ensure that the value of the property in those classes reflects market value. Because the assessed value of commercial personal property is defined as market value under 15-8-111(2), the review conducted by the department may be directed toward ensuring that all taxable personal property is reported to the department.

(3)  The cost of any audit or review performed under subsection (1) or (2) must be paid by the department."

Section 59.  Section 15-16-102, MCA, is amended to read:

"15-16-102.   Time for payment -- penalty for delinquency. Except as provided in 15-16-802 and 15-16-803 and unless Unless suspended or canceled under the provisions of Title 15, chapter 24, part 17, all taxes levied and assessed in the state of Montana, except assessments made for special improvements in cities and towns payable under 15-16-103, are payable as follows:

(1)  One-half of the taxes are payable on or before 5 p.m. on November 30 of each year or within 30 days after the tax notice is postmarked, whichever is later, and one-half are payable on or before 5 p.m. on May 31 of each year.

(2)  Unless one-half of the taxes are paid on or before 5 p.m. on November 30 of each year or within 30 days after the tax notice is postmarked, whichever is later, the amount payable is delinquent and draws interest at the rate of 5/6 of 1% a month from and after the delinquency until paid and 2% must be added to the delinquent taxes as a penalty.

(3)  All taxes due and not paid on or before 5 p.m. on May 31 of each year are delinquent and draw interest at the rate of 5/6 of 1% a month from and after the delinquency until paid, and 2% must be added to the delinquent taxes as a penalty.

(4)  If the date on which taxes are due falls on a holiday or Saturday, taxes may be paid without penalty or interest on or before 5 p.m. of the next business day in accordance with 1-1-307.

(5)  A taxpayer may pay current year taxes without paying delinquent taxes. The county treasurer shall accept a partial payment equal to the delinquent taxes, including penalty and interest, for one or more full taxable years, provided that taxes for both halves of the current tax year have been paid. Payment of taxes for delinquent taxes must be applied to the taxes that have been delinquent the longest. The payment of taxes for the current tax year is not a redemption of the property tax lien for any delinquent tax year.

(6)  The penalty and interest on delinquent assessment payments for specific parcels of land may be waived by resolution of the city council. A copy of the resolution must be certified to the county treasurer."

Section 60.  Section 15-16-119, MCA, is amended to read:

"15-16-119.   Taxation of personal property -- duty of department -- collection by state auditor. (1)  If the taxes on personal property are not a lien upon real property in the same county in an amount sufficient to secure the payment of the taxes, the department shall assess the property and compute the tax for the assessment. The department shall notify the county treasurer of the assessment and the amount of taxes due.  To compute the taxes due on the personal property, the department shall use the appropriate mills levied during the previous year.

(2)  The county treasurer shall notify the person against whom the tax is assessed and any other person having a properly perfected security interest of record of the amount and due date of the tax. The tax is due and payable 30 days from the date the treasurer mails the notice. Taxes not paid within 30 days become delinquent, and the penalty and interest provisions of 15-16-101 must be applied.

(3)  The county treasurer shall, after the tax becomes delinquent, either proceed under subsection (7) or levy upon and take into possession the personal property against which a tax is assessed or any other personal property in the hands of the delinquent taxpayer. The county treasurer may proceed to sell the property in the same manner as property is sold on execution by the sheriff.

(4)  The county treasurer shall, for the purpose of making the levy and sale, direct the sheriff to make the levy and sale. The sheriff, undersheriff, or any deputy sheriff of the county is ex officio a deputy county treasurer for sale purposes and may receive payment of the taxes, penalty, and interest. The sheriff may receive the same fees as for making a seizure and sale as provided in 15-17-911.

(5)  The county treasurer and the treasurer's sureties are liable on the treasurer's official bond for all taxes on personal property remaining uncollected by reason of the willful failure and neglect of the treasurer to levy upon and sell the personal property for the taxes levied upon the property, including penalty and interest.

(6)  Failure by the sheriff, undersheriff, or deputy sheriff acting as a deputy county treasurer to make the levy and sale results in a levy against the official bond of the sheriff, undersheriff, or deputy sheriff for payment of the delinquent tax, including penalty and interest.

(7)  The county treasurer shall give the board of county commissioners a list of delinquent personal property taxpayers and the taxes due. The board may order the county treasurer to verify the list under oath and to send a copy of the list to the state auditor department of administration for collection under Title 17, chapter 4, part 1.

(8)  The provisions of this section do not apply to property for which delinquent property taxes have been suspended or canceled under the provisions of Title 15, chapter 24, part 17."

Section 61.  Section 15-23-101, MCA, is amended to read:

"15-23-101.   Properties centrally assessed. The department of revenue shall centrally assess each year:

(1)  the franchise, roadway, roadbeds, rails, rolling stock, and all other operating property of railroads and railroad car companies operating in more than one county in the state or more than one state;

(2)  property owned by a corporation or other person operating a single and continuous property operated in more than one county or more than one state, including telegraph, telephone, microwave, electric power or transmission lines; natural gas or oil pipelines; canals, ditches, flumes, or like properties and including, if congress passes legislation that allows the state to tax property owned by an agency created by congress to transmit or distribute electrical energy, property constructed, owned, or operated by a public agency created by the congress to transmit or distribute electric energy produced at privately owned generating facilities (not including rural electric cooperatives);

(3)  all property of scheduled airlines;

(4)  the net proceeds of mines and of oil and gas wells;

(5)  the gross proceeds of coal mines; and

(6)  property described in subsections (1) and (2) which that is subject to the provisions of Title 15, chapter 24, part 12."

Section 62.  Section 15-23-703, MCA, is amended to read:

"15-23-703.   Taxation of gross proceeds -- taxable value for bonding and guaranteed tax base aid to schools. (1) The department shall compute from the reported gross proceeds from coal a tax roll that must be transmitted to the county treasurer on or before September 15 each year. The department may not levy or assess any mills against the reported gross proceeds of coal but shall levy a tax of 5% against the value of the reported gross proceeds as provided in 15-23-701(1)(d). The county treasurer shall proceed to give full notice as provided in 15-16-101 to each coal producer of the taxes due and to shall collect the taxes as provided in 15-16-101.

(2)  For bonding, county classification, and all nontax purposes, the taxable value of the gross proceeds of coal is 45% of the contract sales price as defined in 15-35-102.

(3)  Except as provided in subsection (6), the county treasurer shall calculate and distribute to the state, county, and eligible school districts in the county the amount of the coal gross proceeds tax, determined by multiplying the unit value calculated in 15-23-705 times the tons of coal extracted, treated, and sold on which the coal gross proceeds tax was owed during the preceding calendar year.

(4)  Except as provided in subsections (5), (6), and (8), the county treasurer shall credit the amount determined under subsection (3) and the amounts received under 15-23-706:

(a)  to the state and to the counties that levied mills in fiscal year 1990 against 1988 production in the relative proportions required by the levies for state and county purposes in the same manner as property taxes were distributed in fiscal year 1990 in the taxing jurisdiction; and

(b)  to school districts in the county that either levied mills in school fiscal year 1990 against 1988 production or used nontax revenue, such as Public Law 81-874 money, in lieu of levying mills against production, in the same manner that property taxes collected or property taxes that would have been collected would have been distributed in the 1990 school fiscal year in the school district.

(5)  (a) If the total tax liability in a taxing jurisdiction exceeds the amount determined in subsection (3), the county treasurer shall, immediately following the distribution from taxes paid on May 31 of each year, send the excess revenue, excluding any protested coal gross proceeds tax revenue, to the department for redistribution as provided in 15-23-706.

(b)  If the total tax liability in a taxing jurisdiction is less than the amount determined in subsection (3), the taxing jurisdiction is entitled to a redistribution as provided by 15-23-706.

(6)  The board of county commissioners of a county may direct the county treasurer to reallocate the distribution of coal gross proceeds taxes that would have gone to a taxing unit, as provided in subsection (4)(a), to another taxing unit or taxing units, other than an elementary school or high school, within the county under the following conditions:

(a)  The county treasurer shall first allocate the coal gross proceeds taxes to the taxing units within the county in the same proportion that all other property tax proceeds were distributed in the county in fiscal year 1990.

(b)  If the allocation in subsection (6)(a) exceeds the total budget for a taxing unit, the commissioners may direct the county treasurer to allocate the excess to any taxing unit within the county.

(7)  The board of trustees of an elementary or high school district may reallocate the coal gross proceeds taxes distributed to the district by the county treasurer under the following conditions:

(a)  The district shall first allocate the coal gross proceeds taxes to the budgeted funds of the district in the same proportion that all other property tax proceeds were distributed in the district in fiscal year 1990.

(b)  If the allocation under subsection (7)(a) exceeds the total budget for a fund, the trustees may allocate the excess to any budgeted fund of the school district.

(8)  The county treasurer shall credit all taxes collected under this part from coal mines that began production after December 31, 1988, in the relative proportions required by the levies for state, county, and school district purposes in the same manner as property taxes were distributed in the previous fiscal year. (In subsection (2), the deletion of the reference to subsection (5) of 15-35-102 terminates December 31, 2005--sec. 5, Ch. 318, L. 1995.)"

Section 63.  Section 15-23-706, MCA, is amended to read:

"15-23-706.   Department to determine redistribution of coal gross proceeds to taxing jurisdictions. (1) The coal gross proceeds redistribution account established in 15-23-707 is statutorily appropriated, as provided in 17-7-502, for allocation to the county for redistribution as provided in subsections (2) and (3).

(2)  Each year the department shall determine the amount of tax collected under this part from within each taxing unit in the county. If the amount collected by each county is less than the amount determined under 15-23-703(4)(3) for that county, the department shall, on or before June 30 of each year, send the amount of the difference from the state special revenue account established in 15-23-707 to the county treasurer for redistribution as provided in 15-23-703(5)(4).

(3)  If the amount received by the department for redistribution is less than or more than the redistribution amount determined in subsection (2), the department shall calculate and redistribute the shortage or excess amount in the following manner:

(a)  If a county does not receive the entire amount to which it is entitled under subsection (2), the shortage amounts of each taxing unit must be divided by the total shortage amounts of all taxing units determined under 15-23-703(4)(3) to obtain a shortage percentage for each taxing unit. The shortage percentage for each taxing unit must be multiplied by the amount that is available for redistribution to each taxing unit, and this amount must be redistributed to each respective taxing unit.

(b)  If there are excess amounts after the redistribution provided for in subsection (2), the excess amounts must be redistributed to the county of origin in proportion to the amount each taxing unit in the county contributed for redistribution.

(4)  The county treasurer shall distribute the money received under subsection (3)(b) of this section as provided in 15-23-703(5)(4)."

Section 64.  Section 15-23-707, MCA, is amended to read:

"15-23-707.   Coal gross proceeds redistribution account. (1) There is within the state special revenue fund a coal gross proceeds redistribution account.

(2)  All money received from county treasurers as provided in 15-23-703(6)(a)(5)(a) must be deposited by the department into the coal gross proceeds redistribution account for redistribution as provided in 15-23-706."

Section 65.  Section 15-30-101, MCA, is amended to read:

"15-30-101.   Definitions. For the purpose of this chapter, unless otherwise required by the context, the following definitions apply:

(1)  "Base year structure" means the following elements of the income tax structure:

(a)  the tax brackets established in 15-30-103, but unadjusted by subsection (2) of 15-30-103(2), in effect on June 30 of the taxable year;

(b)  the exemptions contained in 15-30-112, but unadjusted by 15-30-112(6), in effect on June 30 of the taxable year;

(c)  the maximum standard deduction provided in 15-30-122, but unadjusted by subsection (2) of 15-30-122(2), in effect on June 30 of the taxable year.

(2)  "Consumer price index" means the consumer price index, United States city average, for all items, using the 1967 base of 100 as published by the bureau of labor statistics of the U.S. department of labor.

(3)  "Department" means the department of revenue.

(4)  "Dividend" means any distribution made by a corporation out of its earnings or profits to its shareholders or members, whether in cash or in other property or in stock of the corporation, other than stock dividends.

(5)  "Fiduciary" means a guardian, trustee, executor, administrator, receiver, conservator, or any person, whether individual or corporate, acting in any fiduciary capacity for any person, trust, or estate.

(6)  "Foreign country" or "foreign "Foreign government" means any jurisdiction other than the one embraced within the United States, its territories, and its possessions.

(7)  "Gross income" means the taxpayer's gross income for federal income tax purposes as defined in section 61 of the Internal Revenue Code of 1954 (26 U.S.C. 61) or as that section may be labeled or amended, excluding unemployment compensation included in federal gross income under the provisions of section 85 of the Internal Revenue Code of 1954 (26 U.S.C. 85) as amended.

(8)  "Inflation factor" means a number determined for each taxable year by dividing the consumer price index for June of the taxable year by the consumer price index for June 1980.

(9)  "Information agents" includes all individuals, corporations, associations, and partnerships, acting in whatever capacity, including lessees or mortgagors of real or personal property, fiduciaries, brokers, real estate brokers, employers, and all officers and employees of the state or of any municipal corporation or political subdivision of the state, having the control, receipt, custody, disposal, or payment of interest, rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable annual or periodical gains, profits, and income with respect to which any person or fiduciary is taxable under this chapter.

(10) "Knowingly" is as defined in 45-2-101.

(11) "Net income" means the adjusted gross income of a taxpayer less the deductions allowed by this chapter.

(12) "Paid", for the purposes of the deductions and credits under this chapter, means paid or accrued or paid or incurred, and the terms "paid or accrued" and "paid or incurred" must be construed according to the method of accounting upon the basis of which the taxable income is computed under this chapter.

(13) "Pension and annuity income" means:

(a)  systematic payments of a definitely determinable amount from a qualified pension plan, as that term is used in section 401 of the Internal Revenue Code (26 U.S.C. 401), or systematic payments received as the result of contributions made to a qualified pension plan that are paid to the recipient or recipient's beneficiary upon the cessation of employment;

(b)  payments received as the result of past service and cessation of employment in the uniformed services of the United States;

(c)  lump-sum distributions from pension or profitsharing profit-sharing plans to the extent that the distributions are included in federal adjusted gross income;

(d)  distributions from individual retirement, deferred compensation, and self-employed retirement plans recognized under sections 401 through 408 of the Internal Revenue Code (26 U.S.C. 401 through 408) to the extent that the distributions are not considered to be premature distributions for federal income tax purposes; or

(e)  amounts received from fully matured, privately purchased annuity contracts after cessation of regular employment.

(14) "Purposely" is as defined in 45-2-101.

(15) "Received", for the purpose of computation of taxable income under this chapter, means received or accrued, and the term "received or accrued" must be construed according to the method of accounting upon the basis of which the taxable income is computed under this chapter.

(16) "Resident" applies only to natural persons and includes, for the purpose of determining liability to the tax imposed by this chapter with reference to the income of any taxable year, any person domiciled in the state of Montana and any other person who maintains a permanent place of abode within the state even though temporarily absent from the state and who has not established a residence elsewhere.

(17) "Stock dividends" means new stock issued, for surplus or profits capitalized, to shareholders in proportion to their previous holdings.

(18) "Taxable income" means the adjusted gross income of a taxpayer less the deductions and exemptions provided for in this chapter.

(19) "Taxable year" or "tax year" means the taxpayer's taxable year for federal income tax purposes.

(20) "Taxpayer" includes any person or fiduciary, resident or nonresident, subject to a tax imposed by this chapter and does not include corporations."

Section 66.  Section 15-30-111, MCA, is amended to read:

"15-30-111.   Adjusted gross income. (1) Adjusted gross income is the taxpayer's federal income tax adjusted gross income as defined in section 62 of the Internal Revenue Code of 1954 (26 U.S.C. 62), as that section may be labeled or amended, and in addition includes the following:

(a)  (i) interest received on obligations of another state or territory or county, municipality, district, or other political subdivision of another state, except to the extent that the interest is exempt from taxation by Montana under federal law;

(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue Code of 1986 (26 U.S.C. 852(b)(5)), as that section may be amended or renumbered, that are attributable to the interest referred to in subsection (1)(a)(i);

(b)  refunds received of federal income tax, to the extent that the deduction of the tax resulted in a reduction of Montana income tax liability;

(c)  that portion of a shareholder's income under subchapter S. of Chapter 1 of the Internal Revenue Code of 1954 that has been reduced by any federal taxes paid by the subchapter S. corporation on the income;

(d)  depreciation or amortization taken on a title plant as defined in 33-25-105(15); and

(e)  the recovery during the tax year of an amount deducted in any prior tax year to the extent that the amount recovered reduced the taxpayer's Montana income tax in the year deducted.

(2)  Notwithstanding the provisions of the federal Internal Revenue Code of 1954, as labeled or amended, adjusted gross income does not include the following, which are exempt from taxation under this chapter:

(a)  (i) all interest income from obligations of the United States government, the state of Montana, county, municipality, district, or other political subdivision of the state and any other interest income that is exempt from taxation by Montana under federal law;

(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue Code of 1986 (26 U.S.C. 852(b)(5)), as that section may be amended or renumbered, that are attributable to the interest referred to in subsection (2)(a)(i);

(b)  interest income earned by a taxpayer who is 65 years of age or older in a tax year up to and including $800 for a taxpayer filing a separate return and $1,600 for each joint return;

(c)  (i)  except as provided in subsection (2)(c)(ii), the first $3,600 of all pension and annuity income received as defined in 15-30-101;

(ii)  for pension and annuity income described under subsection (2)(c)(i), as follows:

(A)  each taxpayer filing singly, head of household, or married filing separately shall reduce the total amount of the exclusion provided in subsection (2)(c)(i) by $2 for every $1 of federal adjusted gross income in excess of $30,000 as shown on the taxpayer's return;

(B)  in the case of married taxpayers filing jointly, if both taxpayers are receiving pension or annuity income or if only one taxpayer is receiving pension or annuity income, the exclusion claimed as provided in subsection (2)(c)(i) must be reduced by $2 for every $1 of federal adjusted gross income in excess of $30,000 as shown on their joint return;

(d)  all Montana income tax refunds or tax refund credits;

(e)  gain required to be recognized by a liquidating corporation under 15-31-113(1)(a)(ii);

(f)  all tips or gratuities that are covered by section 3402(k) or service charges that are covered by section 3401 of the Internal Revenue Code of 1954 (26 U.S.C. 3402(k) or 3401), as amended and applicable on January 1, 1983, received by persons for services rendered by them to patrons of premises licensed to provide food, beverage, or lodging;

(g)  all benefits received under the workers' compensation laws;

(h)  all health insurance premiums paid by an employer for an employee if attributed as income to the employee under federal law;

(i)  all money received because of a settlement agreement or judgment in a lawsuit brought against a manufacturer or distributor of "agent orange" for damages resulting from exposure to "agent orange";

(j)  principal and income in a medical care savings account established in accordance with 15-61-201 or withdrawn from an account for eligible medical expenses, as defined in 15-61-102, of the taxpayer or a dependent of the taxpayer or for the long-term care of the taxpayer or a dependent of the taxpayer; and

(k)  the recovery during the tax year of any amount deducted in any prior tax year to the extent that the recovered amount did not reduce the taxpayer's Montana income tax in the year deducted.

(3)  A shareholder of a DISC that is exempt from the corporation license tax under 15-31-102(1)(l) shall include in the shareholder's adjusted gross income the earnings and profits of the DISC in the same manner as provided by section 995 of the Internal Revenue Code (26 U.S.C. 995) for all periods for which the DISC election is effective.

(4)  A taxpayer who, in determining federal adjusted gross income, has reduced the taxpayer's business deductions by an amount for wages and salaries for which a federal tax credit was elected under section 44B sections 38 and 51(a) of the Internal Revenue Code of 1954, as that section those sections may be labeled or amended, is allowed to deduct the amount of the wages and salaries paid regardless of the credit taken. The deduction must be made in the year the wages and salaries were used to compute the credit. In the case of a partnership or small business corporation, the deduction must be made to determine the amount of income or loss of the partnership or small business corporation.

(5)  Married taxpayers filing a joint federal return who are required to include part of their social security benefits or part of their tier 1 railroad retirement benefits in federal adjusted gross income may split the federal base used in calculation of federal taxable social security benefits or federal taxable tier 1 railroad retirement benefits when they file separate Montana income tax returns. The federal base must be split equally on the Montana return.

(6)  A taxpayer receiving retirement disability benefits who has not attained age 65 by the end of the tax year and who has retired as permanently and totally disabled may exclude from adjusted gross income up to $100 per week received as wages or payments in lieu of wages for a period during which the employee is absent from work due to the disability. If the adjusted gross income before this exclusion and before application of the two-earner married couple deduction exceeds $15,000, the excess reduces the exclusion by an equal amount. This limitation affects the amount of exclusion, but not the taxpayer's eligibility for the exclusion. If eligible, married individuals shall apply the exclusion separately, but the limitation for income exceeding $15,000 is determined with respect to the spouses on their combined adjusted gross income. For the purpose of this subsection, permanently and totally disabled means unable to engage in any substantial gainful activity by reason of any medically determined physical or mental impairment lasting or expected to last at least 12 months. (Subsection (2)(f) terminates on occurrence of contingency--sec. 3, Ch. 634, L. 1983.)"

Section 67.  Section 15-30-117, MCA, is amended to read:

"15-30-117.   Net operating loss -- computation. (1) A Montana net operating loss must be determined in accordance with section 172 of the Internal Revenue Code of 1954 (26 U.S.C. 172) or as that section may be labeled or amended and in accordance with the following:

(a)  The net operating loss deduction for Montana purposes is increased by the following:

(i)  that portion of the federal income tax and motor vehicle tax allowed as a deduction under 15-30-121 or 15-30-131 which that is attributable to income from a Montana trade or business; and

(ii) Montana wages and salaries allowed as a business deduction under 15-30-111(4).

(b)  The net operating loss deduction for Montana purposes is decreased by the following:

(i)  interest received on obligations of another state or territory or of a county, municipality, district, or political subdivision thereof allowed as nonbusiness income under 15-30-111(1)(a);

(ii) federal income tax refunds required to be reported under 15-30-111 and 15-30-131 as Montana business income;

(iii) state income tax; and

(iv) any other nonbusiness deductions allowed under 15-30-121 in excess of nonbusiness income.

(2)  Notwithstanding the provisions of section 172 of the Internal Revenue Code of 1954 (26 U.S.C. 172) or as that section may be labeled or amended, a net operating loss does not include:

(a)  income defined as exempt from state taxation under 15-30-111(2); or

(b)  a zero bracket deduction provided for under section 63 of the Internal Revenue Code of 1954 (26 U.S.C. 63) or as that section may be labeled or amended."

Section 68.  Section 15-30-121, MCA, is amended to read:

"15-30-121.   Deductions allowed in computing net income. (1) In computing net income, there are allowed as deductions:

(1)(a)  the items referred to in sections 161, including the contributions referred to in 33-15-201(5)(b), and 211 of the Internal Revenue Code of 1954 (26 U.S.C. 161 and 211), or as sections 161 and 211 are labeled or amended, subject to the following exceptions, which are not deductible:

(a)(i)  items provided for in 15-30-123;

(b)(ii) state income tax paid;

(c)(iii) one-half of premium payments for medical care as provided in subsection (9) (2);

(2)(b)  federal income tax paid within the tax year;

(3)(c)  expenses of household and dependent care services as outlined in subsections (3)(a) through (3)(c) and (9) (1)(c)(i) through (1)(c)(iii) and (3) and subject to the limitations and rules as set out in subsections (3)(d) through (3)(f) (1)(c)(iv) through (1)(c)(vi), as follows:

(a)(i)  expenses for household and dependent care services necessary for gainful employment incurred for:

(i)(A)  a dependent under 15 years of age for whom an exemption can be claimed;

(ii)(B) a dependent as allowable under 15-30-112(5), except that the limitations for age and gross income do not apply, who is unable to provide self-care because of physical or mental illness; and

(iii)(C) a spouse who is unable to provide self-care because of physical or mental illness;

(b)(ii) employment-related expenses incurred for the following services, but only if the expenses are incurred to enable the taxpayer to be gainfully employed:

(i)(A)  household services that are attributable to the care of the qualifying individual; and

(ii)(B) care of an individual who qualifies under subsection (3)(a) (1)(c)(i);

(c)(iii)  expenses incurred in maintaining a household if over half of the cost of maintaining the household is furnished by an individual or, if the individual is married during the applicable period, is furnished by the individual and the individual's spouse;

(d)(iv) the amounts deductible in subsections (3)(a) through (3)(c) (1)(c)(i) through (1)(c)(iii), subject to the following limitations:

(i)(A)  a deduction is allowed under subsection (3)(a) (1)(c)(i) for employment-related expenses incurred during the year only to the extent that the expenses do not exceed $4,800;

(ii)(B)  expenses for services in the household are deductible under subsection (3)(a) (1)(c)(i) for employment-related expenses only if they are incurred for services in the taxpayer's household, except that employment-related expenses incurred for services outside the taxpayer's household are deductible, but only if incurred for the care of a qualifying individual described in subsection (3)(a)(i) (1)(c)(i)(A) and only to the extent that the expenses incurred during the year do not exceed:

(A)(I)  $2,400 in the case of one qualifying individual;

(B)(II) $3,600 in the case of two qualifying individuals; and

(C)(III) $4,800 in the case of three or more qualifying individuals;

(e)(v)  if the combined adjusted gross income of the taxpayers exceeds $18,000 for the tax year during which the expenses are incurred, the amount of the employment-related expenses incurred, to be reduced by one-half of the excess of the combined adjusted gross income over $18,000;

(f)(vi) for purposes of this subsection (3) (1)(c):

(i)(A)  married couples shall file a joint return or file separately on the same form;

(ii)(B)  if the taxpayer is married during any period of the tax year, employment-related expenses incurred are deductible only if:

(A)(I)  both spouses are gainfully employed, in which case the expenses are deductible only to the extent that they are a direct result of the employment; or

(B)(II)  the spouse is a qualifying individual described in subsection (3)(a)(iii) (1)(c)(i)(C);

(iii)(C)  an individual legally separated from the individual's spouse under a decree of divorce or of separate maintenance may not be considered as married;

(iv)(D)  the deduction for employment-related expenses must be divided equally between the spouses when filing separately on the same form;

(v)(E)  payment made to a child of the taxpayer who is under 19 years of age at the close of the tax year and payments made to an individual with respect to whom a deduction is allowable under 15-30-112(5) are not deductible as employment-related expenses;

(4)(d)  in the case of an individual, political contributions determined in accordance with the provisions of section 218(a) and (b) of the Internal Revenue Code (now repealed) that were in effect for the tax year ended December 31, 1978;

(5)(e)  that portion of expenses for organic fertilizer allowed as a deduction under 15-32-303 that was not otherwise deducted in computing taxable income;

(6)(f)  contributions to the child abuse and neglect prevention program provided for in 41-3-701, subject to the conditions set forth in 15-30-156;

(7)(g)  one-half of premium payments, except premiums deducted in determining Montana adjusted gross income, for:

(a)(i)  insurance for medical care made directly by the taxpayer; and

(b)(ii) long-term care insurance with benefits that meet or exceed the minimum standards as established by the state insurance commissioner; and

(8)(h)  contributions to the Montana drug abuse resistance education program provided for in 44-2-702, subject to the conditions set forth in 15-30-159.

(9)(2)  For the purpose of subsection (7)(a) (1)(g)(i), deductible medical insurance premiums are those premiums that provide payment for medical care as defined by 26 U.S.C. 213(d).

(10)(3) (a) Subject to the conditions of subsection (3) (1)(c), a taxpayer who operates a family day-care home or a group day-care home, as these terms are defined in 52-2-703, and who cares for the taxpayer's own child and at least one unrelated child in the ordinary course of business may deduct employment-related expenses considered to have been paid for the care of the child.

(b)  The amount of employment-related expenses considered to have been paid by the taxpayer is equal to the amount that the taxpayer charges for the care of a child of the same age for the same number of hours of care. The employment-related expenses apply regardless of whether any expenses actually have been paid. Employment-related expenses may not exceed the amounts specified in subsection (3)(d)(ii) (1)(c)(iv)(B).

(c)  Only a day-care operator who is licensed and registered as required in 52-2-721 is allowed the deduction under this subsection (10) (3). (Subsection (8) (1)(h) terminates on occurrence of contingency--sec. 12, Ch. 808, L. 1991.)"

Section 69.  Section 15-30-162, MCA, is amended to read:

"15-30-162.   Investment credit. (1) There is allowed as a credit against the tax imposed by 15-30-103 a percentage of the credit allowed with respect to certain depreciable property under section 38 of the Internal Revenue Code of 1954 (26 U.S.C. 38), as amended, or as that section 38 may be renumbered or amended. However, rehabilitation costs as set forth under section 46(a)(2)(F) of the Internal Revenue Code of 1954 (26 U.S.C. 46), or as that section 46(a)(2)(F) may be renumbered or amended, are not to be included in the computation of the investment credit. The credit is allowed for the purchase and installation of certain qualified property defined by section 38 of the Internal Revenue Code of 1954 (26 U.S.C. 38), as amended, if the property meets all of the following qualifications:

(a)  it was placed in service in Montana; and

(b)  it was used for the production of Montana adjusted gross income.

(2)  The amount of the credit allowed for the taxable year is 5% of the amount of credit determined under section 46(a)(2) of the Internal Revenue Code of 1954 (26 U.S.C. 46), as amended, or as that section 46(a)(2) may be renumbered or amended.

(3)  Notwithstanding the provisions of subsection (2), the investment credit allowed for the taxable year may not exceed the taxpayer's tax liability for the taxable year or $500, whichever is less.

(4)  If property for which an investment credit is claimed is used both inside and outside this state, only a portion of the credit is allowed. The credit must be apportioned according to a fraction the numerator of which is the number of days during the taxable year the property was located in Montana and the denominator of which is the number of days during the taxable year the taxpayer owned the property. The investment credit may be applied only to the tax liability of the taxpayer who purchases and places in service the property for which an investment credit is claimed. The credit may not be allocated between spouses unless the property is used by a partnership or small business corporation of which they are partners or shareholders.

(5)  The investment credit allowed by this section is subject to recapture as provided for in section 47 of the Internal Revenue Code of 1954 (26 U.S.C. 47), as amended, or as that section 47 may be renumbered or amended."

Section 70.  Section 15-30-201, MCA, is amended to read:

"15-30-201.   Definitions. When used in 15-30-201 through 15-30-209, the following definitions apply:

(1)  "Agricultural labor" means all services performed on a farm or ranch in connection with cultivating the soil or in connection with raising or harvesting any agricultural or horticultural commodity, including the raising, shearing, feeding, caring for, training, and management of livestock, bees, poultry, and fur-bearing animals and wildlife.

(2)  "Employee" means an officer, employee, or elected public official of the United States, the state of Montana, or any political subdivision of the United States or Montana or any agency or instrumentality of the United States, the state of Montana, or a political subdivision of the United States or Montana. The term also includes an officer of a corporation.

(3)  "Employer" means the person for whom an individual performs or performed any service, of whatever nature, as an employee of the person. However, if the person for whom the individual performs or performed the service does not have control of the payment of the wages for the service, the term means the person who has control of the payment of wages.

(4)  "Independent contractor" means an individual who renders service in the course of an occupation and:

(a)  has been and will continue to be free from control or direction over the performance of the services, both under contract and in fact; and

(b)  is engaged in an independently established trade, occupation, profession, or business.

(5)  "Lookback period" means the 12-month period ending the preceding June 30.

(6)  "Wages" means all remuneration, other than fees paid to a public official, for services performed by an employee for the employer, including the cash value of all remuneration paid in any medium other than cash, except that the term does not include remuneration paid:

(a)  for active service as a member of the regular armed forces of the United States, as defined in 10 U.S.C. 101(33);

(b)  for agricultural labor;

(c)  for domestic service in a private home, local college club, or local chapter of a college fraternity or sorority;

(d)  for casual labor not in the course of the employer's trade or business performed in any calendar quarter by an employee, unless the cash remuneration paid for the service is $50 or more and the service is performed by an individual who is regularly employed by the employer to perform the service. For purposes of this subsection (d) (6)(d), an individual is considered to be regularly employed by an employer during a calendar quarter only if:

(i)  on each of 24 days during a quarter, the individual performs service not in the course of the employer's trade or business for the employer for some portion of the day; and

(ii) the individual was regularly employed, as determined under subsection (6)(d)(i), by the employer in the performance of service during the preceding calendar quarter.

(e)  for services by a citizen or resident of the United States for a foreign government or an international organization;

(f)  for services performed by an ordained, commissioned, or licensed minister of a church in the exercise of the ministry or by a member of a religious order in the exercise of duties required by the order;

(g)  (i) for services performed by an individual under 18 years of age in the delivery or distribution of newspapers or shopping news, not including delivery or distribution to any point for subsequent delivery or distribution; or

(ii) for services performed by an individual in and at the time of the sale of newspapers or magazines to ultimate consumers under an arrangement under which the newspapers or magazines are to be sold by the individual at a fixed price, with the individual's compensation based on the retention of the excess of the price over the amount at which the newspapers or magazines are charged to the individual, whether or not the individual is guaranteed a minimum amount of compensation for the service or is entitled to be credited with the unsold newspapers or magazines turned back;

(h)  for services not in the course of the employer's trade or business to the extent paid in any medium other than cash when the payments are in the form of lodgings or meals and the services are received by the employee at the request of and for the convenience of the employer;

(i)  to or for an employee as a payment for or a contribution toward the cost of any group plan or program that benefits the employee, including but not limited to life insurance, hospitalization insurance for the employee or dependents, and employees' club activities;

(j)  as tips or gratuities that are in accordance with section 3402(k) or service charges that are covered by section 3401 of the Internal Revenue Code of 1954 (26 U.S.C. 3402(k) or 3401), as amended and applicable on January 1, 1983, received by persons for services rendered by them to patrons of premises licensed to provide food, beverage, or lodging;

(k)  by an employer for dependent care assistance actually provided to or on behalf of an employee and for which a credit is allowed under 15-30-186 or 15-31-131, subject to the limitations provided in section 129(b) of the Internal Revenue Code (26 U.S.C. 129(b)) as it read on January 1, 1989. (Subsection (6)(j) terminates on occurrence of contingency--sec. 3, Ch. 634, L. 1983.)"

Section 71.  Section 15-30-202, MCA, is amended to read:

"15-30-202.   Withholding of tax from wages. Each employer, except an independent contractor, making payment of wages shall withhold from wages a tax determined in accordance with the withholding tax tables prepared and issued by the department. Persons on active service as members of the regular armed forces of the United States, as defined in 10 U.S.C. 101(33), are not subject to the provisions of this section."

Section 72.  Section 15-31-102, MCA, is amended to read:

"15-31-102.   Organizations exempt from tax -- unrelated business income not exempt. (1) Except as provided in subsection (3), there shall may not be taxed under this title any income received by any:

(a)  labor, agricultural, or horticultural organization;

(b)  fraternal beneficiary, society, order, or association operating under the lodge system or for the exclusive benefit of the members of a fraternity itself operating under the lodge system and providing for the payment of life, sick, accident, or other benefits to the members of such the society, order, or association or their dependents;

(c)  cemetery company owned and operated exclusively for the benefit of its members;

(d)  corporation or association organized and operated exclusively for religious, charitable, scientific, or educational purposes, no part of the net income of which inures to the benefit of any private stockholder or individual;

(e)  business league, chamber of commerce, or board of trade not organized for profit, and no part of the net income of which inures to the benefit of any private stockholder or individual;

(f)  civic league or organization not organized for profit but operated exclusively for the promotion of social welfare;

(g)  club organized and operated exclusively for pleasure, recreation, and other nonprofitable purposes, no part of the net income of which inures to the benefit of any private stockholder or members;

(h)  farmers' or other mutual hail, cyclone, or fire insurance company, mutual ditch or irrigation company, mutual or cooperative telephone company, or like organization of a purely local character, the income of which consists solely of assessments, dues, and fees collected from members for the sole purpose of meeting its expenses;

(i)  cooperative association or corporation engaged in the business of operating a rural electrification system or systems for the transmission or distribution of electrical energy on a cooperative basis;

(j)  corporations or associations organized for the exclusive purpose of holding title to property, collecting income therefrom from the property, and turning over the entire amount thereof of the income, less expenses, to an organization which that itself is exempt from the tax imposed by this title;

(k)  wool and sheep pool, which is an association owned and operated by agricultural producers organized to market association members' wool and sheep, the income of which consists solely of assessments, dues, and fees collected from members for the sole purpose of meeting its expenses. Income, for this purpose, does not include expenses and money distributed to members contributing wool and sheep;.

(l)  corporation that qualifies as a domestic international sales corporation (DISC) under the provisions of section 991, et seq., of the Internal Revenue Code (26 U.S.C. 991, et seq.) and that has in effect for the entire taxable year a valid election under federal law to be treated as a DISC. If a corporation makes such an election under federal law, each person who at any time is a shareholder of such the corporation is subject to taxation under Title 15, chapter 30, on the earnings and profits of this DISC in the same manner as provided by federal law for all periods for which the election is effective.

(m)  farmers' market association not organized for profit, and no part of the net income of which inures to the benefit of any member, but that is organized for the sole purpose of providing for retail distribution of homegrown vegetables, handicrafts, and other products either grown or manufactured by the seller.

(2)  In determining the license fee to be paid under this part, there shall may not be included any earnings derived from any public utility managed or operated by any subdivision of the state or from the exercise of any governmental function.

(3)  Any unrelated business taxable income, as defined by section 512 of the Internal Revenue Code, of 1954 (26 U.S.C. 512), as amended, earned by any exempt corporation resulting in a federal unrelated business income tax liability of more than $100 shall must be taxed as other corporation income is taxed under this title. An exempt corporation subject to taxation on unrelated business income under this section must shall file a copy of its federal exempt organization business income tax return on which it reports its unrelated business income with the department of revenue."

Section 73.  Section 15-31-131, MCA, is amended to read:

"15-31-131.   Credit for dependent care assistance. (1) There is a credit against the taxes otherwise due under this chapter allowable to an employer for amounts paid or incurred during the taxable year by the employer for dependent care assistance actually provided to or on behalf of an employee if the assistance is furnished by a registered or licensed day-care provider and pursuant to a program that meets the requirements of section 89(k) and 129(d)(2) through (6) of the Internal Revenue Code (26 U.S.C. 129(d)(2) through (d)(6)).

(2)  (a) The amount of the credit allowed under subsection (1) is 20% of the amount paid or incurred by the employer during the taxable year, but the credit may not exceed $1,250 of day-care assistance actually provided to or on behalf of the employee.

(b)  For the purposes of this subsection, marital status must be determined under the rules of section 21(e)(3) and (4) of the Internal Revenue Code (26 U.S.C. 21(e)(3) and (e)(4)).

(c)  In the case of an onsite facility, the amount upon which the credit allowed under subsection (1) is based, with respect to any dependent, must be based upon utilization and the value of the services provided.

(3)  An amount paid or incurred during the taxable year of an employer in providing dependent care assistance to or on behalf of any employee does not qualify for the credit allowed under subsection (1) if the amount was paid or incurred to an individual described in section 129(c)(1) or (2) of the Internal Revenue Code (26 U.S.C. 129(c)(1) or (c)(2)).

(4)  An amount paid or incurred by an employer to provide dependent care assistance to or on behalf of an employee does not qualify for the credit allowed under subsection (1):

(a)  to the extent the amount is paid or incurred pursuant to a salary reduction plan; or

(b)  if the amount is paid or incurred for services not performed within this state.

(5)  If the credit allowed under subsection (1) is claimed, the amount of any deduction allowed or allowable under this chapter for the amount that qualifies for the credit (or upon which the credit is based) must be reduced by the dollar amount of the credit allowed. The election to claim a credit allowed under this section must be made at the time of filing the tax return.

(6)  The amount upon which the credit allowed under subsection (1) is based may not be included in the gross income of the employee to whom the dependent care assistance is provided. However, the amount excluded from the income of an employee under this section may not exceed the limitations provided in section 129(b) of the Internal Revenue Code (26 U.S.C. 129(b)). For purposes of Title 15, chapter 30, part 2, with respect to an employee to whom dependent care assistance is provided, "wages" does not include any amount excluded under this subsection. Amounts excluded under this subsection do not qualify as expenses for which a deduction is allowed to the employee under 15-30-121.

(7)  Any tax credit otherwise allowable under this section that is not used by the taxpayer in a particular year may be carried forward and offset against the taxpayer's tax liability for the next succeeding tax year. Any credit remaining unused in the next succeeding tax year may be carried forward and used in the second succeeding tax year, and likewise through the fifth year succeeding the tax year in which the credit was first allowed or allowable. A credit may not be carried forward beyond the fifth succeeding tax year.

(8)  If the taxpayer is an S. corporation, as defined in section 1361 of the Internal Revenue Code (26 U.S.C. 1361), and the taxpayer elects to take tax credit relief, the election may be made on behalf of the corporation's shareholders. A shareholder's credit must be computed using the shareholder's pro rata share of the corporation's costs that qualify for the credit. In all other respects, the effect of the tax credit applies to the corporation as otherwise provided by law.

(9)  For purposes of the credit allowed under subsection (1):

(a)  The definitions and special rules contained in section 129(e) of the Internal Revenue Code (26 U.S.C. 129(e)) apply to the extent applicable.

(b)  "Employer" means an employer carrying on a business, trade, occupation, or profession in this state.

(c)  "Internal Revenue Code" means the federal Internal Revenue Code as amended and in effect on January 1, 1989."

Section 74.  Section 15-32-102, MCA, is amended to read:

"15-32-102.   Definitions. As used in this part, the following definitions apply:

(1)  "Building" means:

(a) a single or multiple dwelling, including a mobile home,; or

(b) a building used for commercial, industrial, or agricultural purposes, that is enclosed with walls and a roof.

(2)  "Capital investment" means any material or equipment purchased and installed in a building or land with or without improvements.

(3)  "Energy conservation purpose" means one or both of the following results of an investment:

(a)  reducing the waste or dissipation of energy; or

(b)  reducing the amount of energy required to accomplish a given quantity of work.

(4)  "Geothermal system" means a system that transfers energy either from the ground, by way of a closed loop, or from ground water, by way of an open loop, for the purpose of heating or cooling a residential building.

(5)  "Passive solar system" means a direct thermal energy system that uses the structure of a building and its operable components to provide heating or cooling during the appropriate times of the year by using the climate resources available at the site. It includes only those portions and components of a building that are expressly designed and required for the collection, storage, and distribution of solar energy and that are not standard components of a conventional building.

(6)(5)  "Low emission wood or biomass combustion device" means a noncatalytic stove or furnace that:

(a)  (i) is specifically designed to burn wood pellets or other nonfossil biomass pellets; and

(ii) has a particulate emission rate of less than 4.1 grams per hour when tested in conformance with the standard method for measuring the emissions and efficiencies of residential wood stoves, as adopted by the department of environmental quality pursuant to 15-32-203; or

(iii) has an air-to-fuel ratio of 35 to 1 or greater when tested in conformance with the standard method for measuring the air-to-fuel ratio and minimum achievable burn rates for wood-fired appliances, as adopted by the department of environmental quality pursuant to 15-32-203; or

(b)  burns wood or other nonfossil biomass and has a particulate emission rate of less than 4.1 grams per hour when tested in conformance with the standard method for measuring the emissions and efficiencies of residential wood stoves, as adopted by the department of environmental quality pursuant to 15-32-203.

(6)  "Passive solar system" means a direct thermal energy system that uses the structure of a building and its operable components to provide heating or cooling during the appropriate times of the year by using the climate resources available at the site. It includes only those portions and components of a building that are expressly designed and required for the collection, storage, and distribution of solar energy and that are not standard components of a conventional building.

(7)  "Recognized nonfossil forms of energy generation" means:

(a)  a system that captures energy or converts energy sources into usable sources by using:

(i) solar energy, including passive solar systems;

(ii) wind;

(iii) solid waste; or

(iv) the decomposition of organic wastes;

(b)  a system that produces electric power from solid wood wastes; or

(c)  a small system that uses water power by means of an impoundment that is not over 20 acres in surface area."

Section 75.  Section 15-32-201, MCA, is amended to read:

"15-32-201.   Amount of credit -- to whom available. (1) A resident individual taxpayer who completes installation of an energy system using a recognized nonfossil form of energy generation, as defined in 15-32-102, in the taxpayer's principal dwelling prior to January 1, 1993, or who acquires title to a dwelling prior to January 1, 1993, that is to be used as the taxpayer's principal dwelling and is equipped with an energy system for which the credit allowed by this part has never been claimed is entitled to claim a tax credit in an amount equal to 10% of the first $1,000 and 5% of the next $3,000 of the cost of the system, including installation costs, less grants received or, if the federal government provides for a tax credit substantially similar in kind (not in amount), then a tax credit in an amount equal to 5% of the first $1,000 and 2 1/2% of the next $3,000 of the cost of the system, including installation costs, less grants received, against the income tax liability imposed against the taxpayer pursuant to chapter 30.

(2)  A resident individual taxpayer who completes installation of an energy system using a low emission wood or biomass combustion device, as defined in 15-32-102(6)(a)(5)(a), in the taxpayer's principal dwelling prior to January 1, 1996, is entitled to claim a tax credit in an amount equal to 20% of the first $1,000 and 10% of the next $3,000 of the cost of the system, including the installation costs, against the income tax liability imposed against the taxpayer pursuant to Title 15, chapter 30.

(3)  A resident individual taxpayer who completes installation of an energy system that uses a low emission wood or biomass combustion device, as defined in 15-32-102(6)(b)(5)(b), in the taxpayer's principal dwelling prior to January 1, 1996, is entitled to claim a tax credit in an amount equal to 10% of the first $1,000 and 5% of the next $3,000 of the cost of the system, including the installation costs, against the income tax liability imposed against the taxpayer pursuant to Title 15, chapter 30."

Section 76.  Section 15-32-403, MCA, is amended to read:

"15-32-403.   Limitation on credit. Whenever any federal wind energy tax credits for a system that generates electricity by means of wind power are allowed or allowable under section 48(1) 48(a) of the Internal Revenue Code (26 U.S.C. 48(a)) or any other federal law, the state credit allowed by 15-32-402 must be reduced by the amount of federal credits so that the effective credit does not exceed 60% of the eligible costs."

Section 77.  Section 15-36-324, MCA, is amended to read:

"15-36-324.   Distribution of taxes. (1) For each calendar quarter, the department of revenue shall determine the amount of tax, late payment interest, and penalty collected under this part. For purposes of distribution of the taxes to county and school taxing units, the department shall determine the amount of oil and natural gas production taxes paid on production from pre-1985 wells, post-1985 wells, and horizontally drilled wells located in the taxing unit.

(2)  Except as provided in subsections (3) and (4), oil production taxes must be distributed as follows:

(a)  The amount equal to 41.6% of the oil production taxes, including late payment interest and penalty, collected under this part must be distributed as provided in subsection (7).

(b)  The remaining 58.4% of the oil production taxes, plus accumulated interest earned on the amount allocated under this subsection (2)(b), must be deposited in the agency fund in the state treasury and transferred to the county and school taxing units for distribution as provided in subsection (8).

(3)  The amount equal to 100% of the oil production taxes, including late payment interest and penalty, collected from working interest owners on production from post-1985 wells occurring during the first 12 months of production must be distributed as provided in subsection (7).

(4)  The amount equal to 100% of the oil production taxes, including late payment interest and penalty, collected under this part on production from horizontally drilled wells and on the incremental production from horizontally recompleted wells occurring during the first 18 months of production must be distributed as provided in subsection (7).

(5)  Except as provided in subsection (6), natural gas production taxes must be allocated as follows:

(a)  The amount equal to 14.6% of the natural gas production taxes, including late payment interest and penalty, collected under this part must be distributed as provided in subsection (7).

(b)  The remaining 85.4% of the natural gas production taxes, plus accumulated interest earned on the amount allocated under this subsection (5)(b), must be deposited in the agency fund in the state treasury and transferred to the county and school taxing units for distribution as provided in subsection (8).

(6)  The amount equal to 100% of the natural gas production taxes, including late payment interest and penalty, collected from working interest owners under this part on production from post-1985 wells occurring during the first 12 months of production must be distributed as provided in subsection (7).

(7)  The department shall, in accordance with the provisions of 15-1-501(6), distribute the state portion of oil and natural gas production taxes, including late payment interest and penalty collected, as follows:

(a)  85% to the state general fund;

(b)  4.3% to the state special revenue fund for the purpose of paying expenses of the board as provided in 82-11-135; and

(c)  10.7% to be distributed as provided by 15-38-106(2).

(8)  (a) For the purpose of distribution of the oil and natural gas production taxes from pre-1985 wells, the department shall each calendar quarter adjust the unit value determined under 15-36-323 according to the ratio that the oil and natural gas production taxes from pre-1985 wells collected during the calendar quarter for which the distribution occurs plus penalties and interest on delinquent oil and natural gas production taxes from pre-1985 wells bears to the total liability for the oil and natural gas production taxes from pre-1985 wells for the quarter for which the distribution occurs. The amount of oil and natural gas production taxes distributions must be calculated and distributed as follows:

(i)  By the dates referred to in subsection (9), the department shall calculate and distribute to each eligible county the amount of oil and natural gas production taxes from pre-1985 wells for the quarter, determined by multiplying the unit value, as adjusted in this subsection (8)(a), by the units of production on which oil and natural gas production taxes from pre-1985 wells were owed for the calendar quarter for which the distribution occurs.

(ii) Any amount by which the total tax liability exceeds or is less than the total distributions determined in subsection (8)(a) must be calculated and distributed in the following manner:

(A)  The excess amount or shortage must be divided by the total distribution determined for that period to obtain an excess or shortage percentage.

(B)  The excess percentage must be multiplied by the distribution to each taxing unit, and this amount must be added to the distribution to each respective taxing unit.

(C)  The shortage percentage must be multiplied by the distribution to each taxing unit, and this amount must be subtracted from the distribution to each respective taxing unit.

(b)   Except as provided in subsection (8)(c), the county treasurer shall distribute the money received under subsection (9) from pre-1985 wells to the taxing units that levied mills in fiscal year 1990 against calendar year 1988 production in the same manner that all other property tax proceeds were distributed during fiscal year 1990 in the taxing unit, except that a distribution may not be made to a municipal taxing unit.

(c)  The board of county commissioners of a county may direct the county treasurer to reallocate the distribution of oil and natural gas production tax money that would have gone to a taxing unit, as provided in subsection (8)(b), to another taxing unit or taxing units, other than an elementary school or high school, within the county under the following conditions:

(i)  The county treasurer shall first allocate the oil and natural gas production taxes to the taxing units within the county in the same proportion that all other property tax proceeds were distributed in the county in fiscal year 1990.

(ii) If the allocation in subsection (8)(c)(i) exceeds the total budget for a taxing unit, the commissioners may direct the county treasurer to allocate the excess to any taxing unit within the county.

(d)  The board of trustees of an elementary or high school district may reallocate the oil and natural gas production taxes distributed to the district by the county treasurer under the following conditions:

(i)  The district shall first allocate the oil and natural gas production taxes to the budgeted funds of the district in the same proportion that all other property tax proceeds were distributed in the district in fiscal year 1990.

(ii) If the allocation under subsection (8)(d)(i) exceeds the total budget for a fund, the trustees may allocate the excess to any budgeted fund of the school district.

(e)  For all production from post-1985 wells and horizontally drilled wells completed after December 31, 1993, the county treasurer shall distribute oil and natural gas production taxes received under subsections (2)(b) and (5)(b) between county and school taxing units in the relative proportions required by the levies for state, county, and school district purposes in the same manner as property taxes were distributed in the preceding fiscal year.

(f)  The allocation to the county in subsection (8)(e) must be distributed by the county treasurer in the relative proportions required by the levies for county taxing units and in the same manner as property taxes were distributed in the preceding fiscal year.

(g)  The money distributed in subsection (8)(e) that is required for the county mill levies for school district retirement obligations and transportation schedules must be deposited to the funds established for these purposes.

(h)  The oil and natural gas production taxes distributed under subsection (8)(b) that are required for the 6-mill university levy imposed under 20-25-423 and for the county equalization levies imposed under 20-9-331 and 20-9-333, as those sections read on July 1, 1989, must be remitted by the county treasurer to the state treasurer.

(i)  The oil and natural gas production taxes distributed under subsection (8)(e) that are required for the 6-mill university levy imposed under 20-25-423, for the county equalization levies imposed under 20-9-331 and 20-9-333, and for the state equalization aid levy imposed under 20-9-360 must be remitted by the county treasurer to the state treasurer.

(j)  The amount of oil and natural gas production taxes remaining after the treasurer has remitted the amounts determined in subsections (8)(h) and (8)(i) is for the exclusive use and benefit of the county and school taxing units.

(9)  The department shall remit the amounts to be distributed in subsection (8) to the county treasurer by the following dates:

(a)  On or before August 1 of each year, the department shall remit to the county treasurer oil and natural gas production tax payments received for the calendar quarter ending March 31 of the current year.

(b)  On or before November 1 of each year, the department shall remit to the county treasurer oil and natural gas production tax payments received for the calendar quarter ending June 30 of the current year.

(c)  On or before February 1 of each year, the department shall remit to the county treasurer oil and natural gas production tax payments received for the calendar quarter ending September 30 of the previous year.

(d)  On or before May 1 of each year, the department shall remit to the county treasurer oil and natural gas production tax payments received for the calendar quarter ending December 31 of the previous calendar year.

(10) The department shall provide to each county by May 31 of each year the amount of gross taxable value represented by all types of production taxed under 15-36-304 for the previous calendar year multiplied by 60%. The resulting value must be treated as taxable value for county classification purposes and for county bonding purposes."

Section 78.  Section 15-36-325, MCA, is amended to read:

"15-36-325.   Local government severance tax payments for calendar year 1995 production -- distribution of payments -- not subject to I-105 limitations. (1) The local government severance tax imposed under 15-36-101, as that section read before January 1, 1996, for calendar year 1995 production is due as follows:

(a)  for oil and natural gas production occurring in the first calendar quarter of 1995, the tax is due May 31, 1996;

(b)(a)  for oil and natural gas production occurring in the second calendar quarter of 1995, the tax is due May 31, 1997;

(c)(b)  for oil and natural gas production occurring in the third calendar quarter of 1995, the tax is due May 31, 1998; and

(d)(c)  for oil and natural gas production occurring in the fourth calendar quarter of 1995, the tax is due May 31, 1999.

(2)  (a) If the taxpayer pays the entire local government severance tax liability for calendar year 1995 on or before June 30, 1996, the taxpayer must receive a 6% reduction in the total local government severance tax liability.

(b)  Any payment of local government severance taxes for calendar year 1995 made on or before June 30, 1997, does not accrue interest. Any payment of local government severance taxes for calendar year 1995 made after June 30, 1997, must accrue interest at the rate of 1% a month or fraction of a month from July 1, 1997, to the date of payment. Any payment for the third quarter of 1995 received after May 31, 1998, and any payment for the fourth quarter of 1995 received after May 31, 1999, is subject to the late payment penalty provisions in 15-36-311.

(c)  In the case of the dissolution of the operator or a change in the operator of any lease or unit, any unpaid local government severance tax for calendar year 1995 becomes due on the date of dissolution or on the date of the change in operator. The operator is subject to the provisions of subsection (2)(a) regarding the 6% tax liability reduction or the provisions of subsection (2)(b) regarding interest and penalties.

(3)  The department shall determine the amount of tax collected under subsections (1) and (2) from within each taxing unit.

(4)  For purposes of the distribution of local government severance taxes collected under this section, the department shall use the unit value of oil and gas for each taxing unit as determined in 15-36-323.

(5)  The local government severance tax must be deposited in the agency fund in the state treasury and transferred to the county for distribution as provided in subsection (6).

(6)  For the purpose of the distribution of the local government severance tax for calendar year 1995 production, the department shall adjust the unit value determined under this section according to the ratio that the local government severance taxes collected during the quarters for which the distribution occurs plus penalties and interest on delinquent local government severance taxes bears to the total liability for local government severance taxes for the quarters for which the distribution occurs. The taxes must be calculated and distributed as follows:

(a)  By July 31 of each of the years 1996, 1997, 1998, and 1999, the department shall calculate and distribute to each eligible county the amount of local government severance tax for calendar year 1995 production, determined by multiplying the unit value, as adjusted in this subsection (6), by the units of production on which the local government severance tax was owed during calendar year 1995 production.

(b)  Any amount by which the total tax liability exceeds or is less than the total distributions determined in subsection (6)(a) must be calculated and distributed in the following manner:

(i)  The excess amount or shortage must be divided by the total distribution determined for that period to obtain an excess or shortage percentage.

(ii) The excess percentage must be multiplied by the distribution to each taxing unit, and this amount must be added to the distribution to each respective taxing unit.

(iii) The shortage percentage must be multiplied by the distribution to each taxing unit, and this amount must be subtracted from the distribution to each respective taxing unit.

(7)  (a) The county treasurer shall distribute the money received under subsection (6) between the county and school taxing units. The distribution between county and school taxing units is the ratio of the number of mills levied for fiscal year 1990 against 1988 production in each taxing unit for the county and schools, including the county equalization levies that were in effect under 20-9-331 and 20-9-333 as those sections read on July 1, 1989, and the university 6-mill levy imposed under 20-25-423, except that a distribution may not be made to a municipal taxing unit or the state equalization aid levy imposed under 20-9-360. Distribution of money for the county equalization levies and the university levy must be remitted to the state by the county treasurer. The amounts distributed under subsections (7)(b) and (7)(c) are for the exclusive use of county and school taxing units.

(b)  The county treasurer shall deposit the money from subsection (7)(a) allocated to county levies to the oil and natural gas tax accelerated tax fund.

(c)  The trustees of a school district may allocate any payment received under subsection (7)(a) to any budget fund of the district or to the miscellaneous programs fund established in 20-9-507. The trustees shall direct the county treasurer to deposit the local government severance tax payments under this section to the funds of the district in accordance with the allocations determined by the trustees.

(8)  Local government severance tax payments to a county pursuant to this section are not subject to the limitations of Title 15, chapter 10, part 4. Payments of local government severance tax pursuant to this section may not be used for county classification purposes under 7-1-2111 and may not be considered in the determination of bonding limits under 7-7-2101, 7-7-2203, 7-14-2524, and 7-16-2327."

Section 79.  Section 15-38-104, MCA, is amended to read:

"15-38-104.   Tax on mineral production. (1) Except as provided in subsections (2) through (4) (5), the annual tax to be paid by a person engaged in or carrying on the business of mining, extracting, or producing a mineral is $25, plus an additional amount computed on the gross value of product that was derived from the business work or operation within this state during the calendar year immediately preceding at the rate of 1/2 of 1% of the amount of gross value of product at the time of extraction from the ground, if in excess of $5,000. Unless otherwise provided in a contract or lease, the pro rata share of any royalty owner or owners may be deducted from any settlements under the lease or leases or division of proceeds orders or other contracts.

(2)  The annual tax to be paid by a person engaged in or carrying on the business of mining, extracting, or producing:

(a)  talc is $25 plus an additional amount computed on the gross value of product for talc derived from the business work or operation within this state during the calendar year immediately preceding at the rate of 4% of the gross value of product in excess of $625; and

(b)  coal is $25 plus an additional amount computed on the gross value of product for coal produced in Montana during the calendar year immediately preceding at the rate of 0.4% of the gross value of product in excess of $6,250.

(3)  The annual tax to be paid by a person engaged in or carrying on the business of mining, extracting, or producing vermiculite is $25 plus an additional amount computed on the gross value of product for vermiculite derived from the business work or operation within this state during the calendar year immediately preceding at the rate of 2% of the gross value of product in excess of $1,250.

(4)  The annual tax to be paid by a person engaged in or carrying on the business of mining, extracting, or producing limestone for the production of quicklime is $25 plus an additional amount computed on the gross value of product for limestone derived from the business work or operation within this state during the calendar year immediately preceding at the rate of 10% of the gross value of product in excess of $250.

(5)  The annual tax to be paid by a person engaged in or carrying on the business of mining, extracting, or producing industrial garnets and associated byproducts is $25 plus an additional amount computed on the gross value of product for industrial garnets and associated byproducts derived from the business work or operation within this state during the calendar year immediately preceding at the rate of 1% on the gross value of product in excess of $2,500."

Section 80.  Section 15-38-106, MCA, is amended to read:

"15-38-106.   Payment of tax -- records -- collection of taxes -- refunds. (1) The tax imposed by this chapter must be paid by each person to which the tax applies, on or before March 31, on the value of product in the year preceding January 1 of the year in which the tax is paid. The tax must be paid to the department at the time the statement of yield for the preceding calendar year is filed with the department.

(2)  The department shall, in accordance with the provisions of 15-1-501(6), deposit the proceeds of the tax in the resource indemnity trust fund of the nonexpendable trust fund type, except that:

(a)  14.1% of the proceeds must be deposited in the ground water assessment account established by 85-2-905;

(b)  10% of the proceeds must be deposited in the renewable resource grant and loan program state special revenue account established by 85-1-604; and

(c)  30% of the proceeds must be deposited in the reclamation and development grants account established by 90-2-1104.

(3)  Every person to whom the tax applies shall keep records in accordance with 15-38-105, and the records are subject to inspection by the department upon reasonable notice during normal business hours.

(4)  The department shall examine the statement and compute the taxes to be imposed, and the amount computed by the department is the tax imposed, assessed against, and payable by the taxpayer. If the tax found to be due is greater than the amount paid, the excess must be paid by the taxpayer to the department within 30 days after written notice of the amount of deficiency is mailed by the department to the taxpayer. If the tax imposed is less than the amount paid, the difference must be applied as a tax credit against tax liability for subsequent years or refunded if requested by the taxpayer."

Section 81.  Section 15-38-201, MCA, is amended to read:

"15-38-201.   Creation of resource indemnity trust fund. For the purpose of carrying out this chapter, there is a resource indemnity trust fund in the nonexpendable trust fund type in the amount of $100 million. The resource indemnity fund shall must be credited with all moneys money received as herein provided in this part."

Section 82.  Section 15-38-202, MCA, is amended to read:

"15-38-202.   Investment of resource indemnity trust fund -- expenditure -- minimum balance. (1) All money paid into the resource indemnity trust fund, including money payable into the fund under the provisions of 15-36-324 and 15-37-117, must be invested at the discretion of the board of investments. All the net earnings accruing to the resource indemnity trust fund must annually be added to the trust fund until it has reached the sum of $10 million. Thereafter, only Only the net earnings may be appropriated and expended until the fund reaches $100 million. Thereafter, all net earnings and all receipts must may be appropriated by the legislature and expended, provided that the balance in the fund may never be less than $100 million.

(2)  (a) At the beginning of each fiscal year, there is allocated from the interest income of the resource indemnity trust fund $240,000, which is statutorily appropriated, as provided in 17-7-502, from the renewable resource grant and loan program state special revenue account to support the operations of the environmental science-water quality instructional programs at Montana state university-northern, to be used for support costs, for matching funds necessary to attract additional funds to further expand statewide impact, and for enhancement of the facilities related to the programs.

(b)  At the beginning of each biennium, there is allocated from the interest income of the resource indemnity trust fund:

(i)  an amount not to exceed $175,000 to the environmental contingency account pursuant to the conditions of 75-1-1101;

(ii) an amount not to exceed $50,000 to the oil and gas production damage mitigation account pursuant to the conditions of 82-11-161;

(iii) beginning in fiscal year 1996, $2 million to be deposited into the renewable resource grant and loan program state special revenue account, created by 85-1-604, for the purpose of making grants;

(iv) beginning in fiscal year 1996, $3 million to be deposited into the reclamation and development grants state special revenue account, created by 90-2-1104, for the purpose of making grants; and

(v)  beginning in fiscal year 1996, $500,000 to be deposited into the water storage state special revenue account created by 85-1-631.

(c)  The remainder of the interest income is allocated as follows:

(i)  Thirty-six percent of the interest income of the resource indemnity trust fund must be allocated to the renewable resource grant and loan program state special revenue account created by 85-1-604.

(ii) Eighteen percent of the interest income of the resource indemnity trust fund must be allocated to the hazardous waste/CERCLA special revenue account provided for in 75-10-621.

(iii) Forty percent of the interest income from the resource indemnity trust fund must be allocated to the reclamation and development grants account provided for in 90-2-1104.

(iv) Six percent of the interest income of the resource indemnity trust fund must be allocated to the environmental quality protection fund provided for in 75-10-704.

(3)  Any formal budget document prepared by the legislature or the executive branch that proposes to appropriate funds from the resource indemnity trust interest account other than as provided for by the allocations in subsection (2) must specify the amount of money from each allocation that is proposed to be diverted and the proposed use of the diverted funds. A formal budget document includes a printed and publicly distributed budget proposal or recommendation, an introduced bill, or a bill developed during the legislative appropriation process or otherwise during a legislative session."

Section 83.  Section 15-70-125, MCA, is amended to read:

"15-70-125.   Highway nonrestricted account. There is a highway nonrestricted account in the state special revenue fund. All interest and penalties collected under this chapter, except those collected by a justice's court, must, in accordance with the provisions of 15-1-501(6), be placed in the highway nonrestricted account."

Section 84.  Section 15-70-235, MCA, is amended to read:

"15-70-235.   Tribal motor fuels administration account. (1) There is a special revenue account called the tribal motor fuels administration account.

(2)  The administrative expenses and refund amounts deducted by the department of transportation under 15-70-234(3) an agreement must be deposited in the tribal motor fuels administration account.

(3)  The tribal motor fuels administration account may be expended by the department of transportation or by the department of justice only for the purposes of administering the motor fuels tax and providing refunds under 15-70-234 an agreement."

Section 85.  Section 15-70-236, MCA, is amended to read:

"15-70-236.   Tribal motor fuels tax account. (1) There is a special revenue account called the tribal motor fuels tax account.

(2)  The tax collected under 15-70-234, except the administrative expenses and refund amounts deducted under 15-70-234(3) an agreement, must be deposited in the tribal motor fuels tax account.

(3)  The money in the tribal motor fuels tax account must be disbursed to the tribe, as provided for in the agreement entered into pursuant to 15-70-234, on a quarterly basis."

Section 86.  Section 16-1-106, MCA, is amended to read:

"16-1-106.   Definitions. As used in this code, the following definitions apply:

(1)  "Agency franchise agreement" means an agreement between the department and a person appointed to sell liquor and table wine as a commission merchant rather than as an employee.

(2)  "Agency liquor store" means a store operated under an agency franchise agreement in accordance with this code for the purpose of selling liquor at either the posted or retail price for off-premises consumption.

(3)  "Alcohol" means ethyl alcohol, also called ethanol, or the hydrated oxide of ethyl.

(4)  "Alcoholic beverage" means a compound produced and sold for human consumption as a drink that contains more than 0.5% of alcohol by volume.

(5)  "Beer" means a malt beverage containing not more than 7% of alcohol by weight.

(6)  "Beer importer" means a person other than a brewer who imports malt beverages.

(7)  "Brewer" means a person who produces malt beverages.

(8)  "Community" means:

(a)  in an incorporated city or town, the area within the incorporated city or town boundaries;

(b)  in an unincorporated city or area, the area identified by the federal bureau of the census as a community for census purposes; and

(c)  in a consolidated local government, the area of the consolidated local government not otherwise incorporated.

(9)  "Department" means the department of revenue, unless otherwise specified.

(10) "Immediate family" means a spouse, dependent children, or dependent parents.

(11) "Import" means to transfer beer or table wine from outside the state of Montana into the state of Montana.

(12) "Industrial use" means a use described as industrial use by the federal Alcohol Administration Act and the federal rules and regulations of 27 CFR.

(13)(12) "Liquor" means an alcoholic beverage except beer and table wine.

(14)(13) "Malt beverage" means an alcoholic beverage made by the fermentation of an infusion or decoction, or a combination of both, in potable brewing water, of malted barley with or without hops or their parts or their products and with or without other malted cereals and with or without the addition of unmalted or prepared cereals, other carbohydrates, or products prepared from carbohydrates and with or without other wholesome products suitable for human food consumption.

(15)(14) "Package" means a container or receptacle used for holding an alcoholic beverage.

(16)(15) "Posted price" means the wholesale price of liquor for sale to persons who hold liquor licenses as fixed and determined by the department and in addition an excise and license tax as provided in this code.

(17)(16) "Proof gallon" means a U.S. gallon of liquor at 60 degrees on the Fahrenheit scale that contains 50% of alcohol by volume.

(18)(17) "Public place" means a place, building, or conveyance to which the public has or may be permitted to have access and any place of public resort.

(19)(18) "Retail price" means the price established by an agent for the sale of liquor to persons who do not hold liquor licenses. The retail price may not be less than the department's posted price.

(20)(19) "Rules" means rules adopted by the department or the department of justice pursuant to this code.

(21)(20) "State liquor warehouse" means a building owned or under control of the department for the purpose of receiving, storing, transporting, or selling alcoholic beverages to agency liquor stores.

(22)(21) "Storage depot" means a building or structure owned or operated by a brewer at any point in the state of Montana off and away from the premises of a brewery, which building or structure is equipped with refrigeration or cooling apparatus for the storage of beer and from which a brewer may sell or distribute beer as permitted by this code.

(23)(22) "Subwarehouse" means a building or structure owned or operated by a licensed beer wholesaler or table wine distributor, located at a site in Montana other than the site of the beer wholesaler's or table wine distributor's warehouse or principal place of business, and used for the receiving, storage, and distribution of beer or table wine as permitted by this code.

(24)(23) "Table wine" means wine that contains not more than 16% alcohol by volume.

(25)(24) "Table wine distributor" means a person importing into or purchasing in Montana table wine for sale or resale to retailers licensed in Montana.

(26)(25) "Warehouse" means a building or structure located in Montana owned or operated by a licensed beer wholesaler or table wine distributor for the receiving, storage, and distribution of beer or table wine as permitted by this code.

(27)(26) "Wine" means an alcoholic beverage made from or containing the normal alcoholic fermentation of the juice of sound, ripe fruit or other agricultural products without addition or abstraction, except as may occur in the usual cellar treatment of clarifying and aging, and that contains more than 0.5% but not more than 24% of alcohol by volume. Wine may be ameliorated to correct natural deficiencies, sweetened, and fortified in accordance with applicable federal regulations and the customs and practices of the industry. Other alcoholic beverages not defined in this subsection but made in the manner of wine and labeled and sold as wine in accordance with federal regulations are also wine."

Section 87.  Section 16-1-201, MCA, is amended to read:

"16-1-201.   Acts not covered by code. (1) Nothing in this code shall prevent prevents any brewer, distiller, or other person, duly licensed under the provisions of any statute of the United States of America for the manufacture of alcoholic beverages, from having or keeping alcoholic beverages in a place and in the manner authorized by or under any such statute.

(2)  It is hereby declared to be the policy of the state of Montana that the manufacture of alcoholic beverages, including the distillation, rectification, bottling, and processing as these terms are defined under the provisions of the laws of the United States, shall be is authorized and permitted by any brewer, distiller, rectifier, or other person duly licensed under any provision of any statute of the United States of America in a place and in the manner authorized by or under any statute of the United States, provided the. The department may make such adopt rules as that the department deems considers necessary with respect thereto to the manufacture of alcoholic beverages. The rules may not be inconsistent with this code or with the statutes of the United States of America or regulations issued under the provisions of the Federal Alcohol Administration Act, 27 U.S.C. 201 through 212, inclusive, or regulations issued under the provisions of chapter 51 of the Internal Revenue Code, 26 U.S.C 5001 through 5693, inclusive.

(3)  Nothing in this code shall prevent prevents:

(a)  the sale of liquor or table wine by any person to the department;

(b)  the purchase, importation, and sale of liquor and table wine by the department for the purposes of and in accordance with this code."

Section 88.  Section 16-1-202, MCA, is amended to read:

"16-1-202.   Preparations not subject to code. (1) Subject to the provisions of this section, nothing in this code shall, by reason only that such a preparation contains alcohol, prevent prevents the manufacture, sale, purchase, or consumption of any:

(a)  extract, essence, or tincture or other preparation containing alcohol which that is prepared according to a formula of the United States Pharmacopoeia or according to a formula approved of by the department; or

(b)  proprietary or patent medicine prepared according to a formula approved of by the department.

(2)  The department, if of the opinion that any such proprietary or patent medicine, extract, essence, tincture, or preparation which that contains alcohol or any other preparation of a solid, semisolid, or liquid nature containing that contains alcohol which, can be used or any that an extract from which, the substance can be used as a beverage or as the ingredient of any a beverage, may prohibit the retail sale thereof by retail within the state or the possession of the same or the possession of the substance for retail sale by retail within the state, except by a state an agency liquor store or by persons duly licensed by the department to keep and sell the same substance by retail in accordance with this code and the regulations made thereunder under this code.

(3)  The department shall notify the manufacturer or vendor of such the proprietary or patent medicine, extract, essence, tincture, or preparation of the prohibition."

Section 89.  Section 16-2-101, MCA, is amended to read:

"16-2-101.   Establishment and closure of agency liquor stores -- agency franchise agreement -- kinds and prices of liquor. (1) The department shall enter into agency franchise agreements to operate agency liquor stores as the department finds feasible for the wholesale and retail sale of liquor.

(2)  (a)  The department may from time to time fix the posted prices at which the various classes, varieties, and brands of liquor may be sold, and the posted prices must be the same at all agency liquor stores.

(b)  (i) The department shall supply from the state liquor warehouse to agency liquor stores the various classes, varieties, and brands of liquor for resale at the state posted price to persons who hold liquor licenses and to all other persons at the retail price established by the agent.

(ii)  (A) According to the ordering and delivery schedule set by the department, an agency liquor store may place a liquor order with the department at its state liquor warehouse in the manner to be established by the department.

(B)  The agency liquor store's purchase price is the department's posted price less the agency liquor store's commission rate in the state agency franchise agreement and less the agency liquor store's weighed average discount ratio. For purposes of this subsection (2)(b)(ii)(B), for agency liquor stores or employee-operated state liquor stores that were operating June 30, 1994, the weighted average discount ratio is the ratio between an agency liquor store's or the employee-operated state liquor store's full case discount sales divided by the agency liquor store's or employee-operated state liquor store's gross sales, based on fiscal year 1994 reported sales, times the state discount rate for case lot sales, as provided in 16-2-201, divided by the state discount rate for full case lot sales in effect on June 30, 1994. For all other stores that are placed in service after June 30, 1994, the weighted average discount ratio is the average ratio in fiscal year 1994 for similar sized stores for 1 year of operation. Thereafter, the The weighted discount ratio must be computed on the store's first 12 months of operation.

(C)  All liquor purchased from the state liquor warehouse by an agency liquor store must be paid for within 60 days of the date on which the department invoices the liquor to the agency liquor store.

(c)  An agency liquor store may sell table wine at retail for off-premises consumption.

(3)  Agency liquor stores may not be located in or adjacent to grocery stores in communities with populations over 3,000.

(4)  Agency liquor stores must receive commissions payable as follows:

(a)  a 10% commission for agencies in communities with less than 3,000 in population, unless adjusted pursuant to subsection (6) or (8);

(b)  a commission established by competitive bidding unless adjusted pursuant to subsection (6) or (8) for agencies in communities with 3,000 or more in population.

(5)  An agency franchise agreement must:

(a)  be effective for a 10-year period and may be renewed every 10 years if the requirements of the agency franchise agreement have been satisfactorily performed;

(b)  require the agent to maintain comprehensive general liability insurance and liquor liability insurance throughout the term of the agency franchise agreement in an amount established by the department of administration. The insurance policy must:

(i)  declare the department as an additional insured; and

(ii) hold the state harmless and agree to defend and indemnify the state in a cause of action arising from or in connection with the agent's negligent acts or activities in the execution and performance of the agency franchise agreement.

(c)  provide that upon termination by the department for cause or upon mutual termination, the agent is liable for any outstanding liquor purchase invoices. If payment is not made within the appropriate time, the department may immediately repossess all liquor inventory, wherever located.

(d)  specify the reasonable service and space requirements that the agent will provide throughout the term of the agency franchise agreement.

(6)  (a)  The commission percentage that the department pays the agent under an agency franchise agreement may be reviewed on July 1, 1998, and every 3 years thereafter at the request of either party. If the agent concurs, the department may adjust the commission percentage to be paid during the remaining term of the agency franchise agreement or until the next time the commission percentage is reviewed, if that is sooner than the term of the agency franchise agreement, to a commission percentage that is equal to the average commission percentage being paid agents with similar sales volumes if:

(i)  the agent's commission percentage is less than the average; and

(ii) all the requirements of the agency franchise agreement have been satisfactorily performed.

(b)  The adjusted commission percentage determined under subsection (6)(a) may be greater than the average commission paid agents with similar sales volume:

(i)  if the agent demonstrates that:

(A)  the agent has experienced cost increases that are beyond the agent's control, including but not limited to increases in the federally established minimum wage or escalation in prevailing rent; and

(B)  the average commission percentage is insufficient to yield net income commensurate with net income experienced before the cost increases occurred; and

(ii) if the department demonstrates that it is unable to indicate adjustments in the requirements specified in the agent's franchise agreement that will eliminate the impact of cost increases.

(7)  The liability insurance requirement may be reviewed every 3 years after July 1, 1995, at the request of either the agent or the department. If the agent concurs, the department may adjust the requirements to be effective during the remaining term of the agency franchise agreement if the adjustments adequately protect the state from risks associated with the agent's negligent acts or activities in the execution and performance of the agency franchise agreement. The amount of liability insurance coverage may not be less than the minimum requirements of the department of administration.

(8)  (a) Except as provided in subsection (8)(b), an agency franchise agreement must be renewed for additional 10-year periods if the agent has satisfactorily performed all the requirements of the agency franchise agreement. Except for establishing the new term and except for a commission percentage that may be negotiated as provided in subsection (8)(b), changes in the agency franchise agreement as a result of a renewal may not be made unless the agent and the department mutually agree.

(b)  If at least 90 days prior to the expiration of a 10-year agency franchise agreement, the department determines that an adjustment of the commission percentage paid to the agent is in the best interests of the state, the department shall notify the agent of that determination.

(c)  If the agent does not concur with the department's commission percentage adjustment, the department shall advertise for bids for the agency franchise at the adjusted commission percentage, subject to the provisions of this chapter. If bids from persons who meet the criteria provided in this chapter are received by the department for the agency franchise at the adjusted commission percentage, the agent under the existing franchise agreement has a preference right to renew the franchise agreement by concurring in the adjusted commission percentage.

(d)  If the agent under the existing franchise agreement declines to exercise the preference right under subsection (8)(c), the department shall enter into an agency franchise agreement as provided in this chapter with a person who accepted the adjusted commission percentage.

(e)  If the agent exercises the preference right and believes the adjusted commission percentage to be inadequate or not in the best interests of the state, the agent may request an administrative hearing. The request must contain a statement of reasons why the agent believes the commission percentage to be inadequate or not in the state's best interests. The department shall grant the request for a hearing if it determines that the statement indicates evidence that the adjusted commission percentage is inadequate or not in the state's best interests. The department may, after the hearing, adjust the commission percentage if the agent shows that the commission percentage is inadequate or not in the best interests of the state. If the department increases the commission percentage rate, the department shall set forth its findings and conclusions in writing and inform the agent and the other persons who offered to enter into an agency agreement at the adjusted commission rate.

(9)  (a)  The department may terminate an agency franchise agreement if the agent has not satisfactorily performed the requirements of the agency franchise agreement because the agent:

(i)  charges retail prices that are less than the department's posted price for liquor, sells liquor to persons who hold liquor licenses at less than the posted price, or sells liquor at case discounts greater than the discount provided for in 16-2-201 to persons who hold liquor licenses;

(ii) fails to maintain sufficient liability insurance;

(iii) has not maintained a quantity and variety of product available for sale commensurate with demand, delivery cycle, repayment schedule, mixed case shipments from the department, and the ability to purchase special orders;

(iv) at an agency liquor store located 35 miles or more from the nearest agency liquor store, has operated the agency liquor store in a manner that makes the premises unsanitary or inaccessible for the purpose of making purchases of liquor; or

(v)  fails to comply with the express terms of the agency franchise agreement.

(b)  The department shall give an agent 30 days' notice of its intent to terminate the agency franchise agreement for cause and specify the unmet requirements. The agent may contest the termination and request a hearing within 30 days of the date of notice. If a hearing is requested, the department shall suspend its termination order until after a final decision has been made pursuant to the Montana Administrative Procedure Act.

(c)  In the case of failure to make timely payments to the department for liquor purchased, the department may terminate the agency franchise agreement and immediately repossess any liquor purchased and in the possession of the agent. If an agency franchise agreement is terminated, the agent may contest the termination and request a hearing within 30 days of the department's repossession of the liquor. The agency liquor store shall remain closed until a final decision has been reached following a hearing held pursuant to the Montana Administrative Procedure Act.

(10) An agency franchise agreement may be terminated upon mutual agreement by the agent and the department.

(11) An agent may assign an agency franchise agreement to a person who, upon approval of the department, is named agent in the agency franchise agreement, with the rights, privileges, and responsibilities of the original agent for the remaining term of the agency franchise agreement. The agent shall notify the department of an intent to assign the agency franchise agreement 60 days before the intended effective date of the assignment. The department may not unreasonably withhold approval of an assignment request.

(12) A person or entity may not hold an ownership interest in more than one agency liquor store.

(13) The department shall maintain sufficient inventory in the state warehouse in order to meet a monthly service level of at least 97%."

Section 90.  Section 16-2-103, MCA, is amended to read:

"16-2-103.   Duplicate invoices of sales required. (1) The state An agency liquor store shall, upon each sale of liquor or table wine to any licensee, issue a duplicate invoice of the liquor or table wine purchased, as provided by the department, a copy of which shall must be delivered to the licensee and one copy retained at such the store.

(2)  The invoice shall must show the date of purchase, the name of the employee making the sale, the quantity of each kind of liquor or table wine purchased, the price paid therefor for the liquor or table wine, the name of the licensee, and the number of the license, with such any other information as that may be required by the department.

(3)  The licensee shall keep and retain his the duplicate invoice of all purchases made by him from the state an agency liquor store, which shall must at all times be subject to inspection by the duly authorized officers, agents, and employees of the department."

Section 91.  Section 16-3-220, MCA, is amended to read:

"16-3-220.   Wholesalers' service obligations -- applicability. (1) A wholesaler appointed to distribute a brand of beer within a territory specified by agreement pursuant to 16-3-221(3) 16-3-222 shall call on and offer that brand to at least 75% of the retailers within that territory at least every 3 weeks. However, if the brand of beer for which the wholesaler is appointed is a product of a brewer or beer importer whose products are not generally available, the wholesaler shall, at least every 3 weeks, call on and offer that brand to as many retailers within that territory as is reasonably possible given the amount of that brand that is available to the wholesaler.

(2)  If a retailer's account with a wholesaler is current as required under 16-3-243, the wholesaler may not refuse to sell the retailer any generally available brand of beer for which the wholesaler has been appointed for the territory in which the retailer is located. The wholesaler shall offer to deliver the beer to the retailer at least every 3 weeks.

(3)  For the purposes of this section, a brewer or beer importer's products are not generally available if:

(a)  all of the brands of a brewer or beer importer shipped to a wholesaler during the most recent calendar quarter total less than 600 barrels;

(b)  all of the brands of a brewer or beer importer shipped into the state total less than 1,200 barrels in each of the 2 consecutive preceding calendar quarters; and

(c)  all of the brands produced by the brewer at all of its facilities total less than 150,000 barrels per year.

(4)  This section applies to all beer distribution agreements entered into, assigned, or amended after July 1, 1986. It does not apply to a distribution agreement for a named brand entered into before July 1, 1986, but does not prohibit a brewer who is a party to an agreement from requiring the appointed wholesaler to fulfill similar service obligations in the territory."

Section 92.  Section 16-6-106, MCA, is amended to read:

"16-6-106.   When force may be used in seizure of alcoholic beverages -- forfeiture -- hearing. (1) If an alcoholic beverage is found by a department of justice investigator or a peace officer in any place in quantities that satisfy the investigator or peace officer that the alcoholic beverage is being kept contrary to this code, the investigator or peace officer may seize and remove, by force if necessary, any alcoholic beverage found and the packages in which the alcoholic beverage was kept and immediately turn the alcoholic beverage over to the department.

(2)  The department shall determine if the seized alcoholic beverage is suitable for resale in a state an agency liquor store. If the department has determined that the seized alcoholic beverage is suitable for resale, the department shall commence an administrative action against the owner of the alcoholic beverage. All seized alcoholic beverages found to be unsuitable for sale in a state an agency liquor store must be destroyed by the department.

(3)  A notice and opportunity for hearing must be given in accordance with the Montana Administrative Procedure Act, except that the notice must be published in the county where the alcoholic beverage was seized if a newspaper is published in the county.

(4)  The notice must show the date and place of seizure, the name of the person or persons actually or apparently in possession or control of the alcoholic beverage if the person was present at the time of the seizure, and the reasons the department claims the right to the possession of the alcoholic beverage. The notice must also demand that all persons who claim any right to the possession of the alcoholic beverage show the nature of their claim or claims, that the hearing examiner declare the alcoholic beverage contraband, and that the hearing examiner order that the alcoholic beverage be forfeited to the state."

Section 93.  Section 17-2-107, MCA, is amended to read:

"17-2-107.   Accurate accounting records and interentity loans. (1) The department of administration shall record receipts and disbursements for treasury funds and for accounting entities within treasury funds and shall maintain records in such a manner as to reflect the total cash and invested balance of each fund and each accounting entity. The department of administration shall adopt the necessary procedures to ensure that interdepartmental or intradepartmental transfers of money or loans do not result in inflation of figures reflecting total governmental costs and revenue.

(2)  (a) When the expenditure of an appropriation from a fund designated in 17-2-102(1)(a) through (1)(c) is necessary and the cash balance in the accounting entity from which the appropriation was made is insufficient, the department of administration may authorize a temporary loan, bearing no interest, of unrestricted money from other accounting entities if there is reasonable evidence that the income will be sufficient to repay the loan within 1 calendar year and if the loan is recorded in the state accounting records. An accounting entity receiving a loan or an accounting entity from which a loan is made may not be so impaired that all proper demands on the accounting entity cannot be met even if the loan is extended.

(b)  (i) When an expenditure from a fund or subfund designated in 17-2-102(1)(d)(i)(A) through (1)(d)(vi) is necessary and the cash balance in the fund or subfund from which the expenditure is to be made is insufficient, the commissioner of higher education may authorize a temporary loan, bearing interest as provided in subsection (4), of money from the agency's other funds or subfunds if there is reasonable evidence that the income will be sufficient to repay the loan within 1 calendar year and if the loan is recorded in the state accounting records. A fund or subfund receiving a loan or from which a loan is made may not be so impaired that all proper demands on the fund or subfund cannot be met even if the loan is extended.

(ii) One accounting entity within each fund or subfund designated in 17-2-102(1)(d)(i)(A) through (1)(d)(vi) must be established for the sole purpose of recording loans between the funds or subfunds. This accounting entity is the only accounting entity within each fund or subfund that may receive a loan or from which a loan may be made.

(c)  A loan made under subsection (2)(a) or (2)(b) must be repaid within 1 calendar year of the date on which the loan is approved unless it is extended under subsection (3) or by specific legislative authorization.

(3)  Under unusual circumstances, the director of the department of administration or the board of regents may grant one extension for up to 1 year for a loan made under subsection (2)(a) or (2)(b). The director or board shall prepare a written justification and proposed repayment plan for each loan extension authorized and shall furnish a copy of the written justification and proposed repayment plan to the house appropriations and senate finance and claims committees at the next legislative session.

(4)  Any loan from the current unrestricted subfund to funds designated in 17-2-102(1)(d)(i)(D) and (1)(d)(ii) through (1)(d)(vi) must bear interest at a rate equivalent to the previous fiscal year's average rate of return on the board of investments' short-term investment pool. Except for investment earnings on restricted donations, all designated and restricted subfund investment earnings, other than investment earnings on student activity fees used to support student governments at units of the university system, are credited to the state general fund.

(5)  If for 2 consecutive fiscal yearends a loan or an extension of a loan has been authorized to the same accounting entity as provided in subsection (2) or (3), the department of administration or the commissioner of higher education shall submit to the legislative finance committee by September 1 of the following fiscal year a written report containing an explanation as to why the second loan or extension was made, an analysis of the solvency of the accounting entity or accounting entities within the university fund or subfund, and a plan for repaying the loans.

(6)  If for 2 consecutive fiscal yearends an accounting entity in a fund or subfund designated in 17-2-102(1)(d)(i) through (1)(d)(vi) has a negative cash balance, the commissioner of higher education shall submit to the legislative finance committee by September 1 of the following fiscal year a written report containing an explanation as to why the accounting entity has a negative cash balance, an analysis of the solvency of the accounting entity, and a plan to address any problems concerning the accounting entity's negative cash balance or solvency.

(7)  (a) An accounting entity in a fund designated in 17-2-102(1)(a) through (1)(c) may not have a negative cash balance at fiscal yearend. The department of administration may, however, allow an accounting entity to carry a negative balance at any point during the fiscal year if the negative cash balance does not exist for more than 7 working days.

(b)  (i) Except as provided in subsection (7)(b)(ii), a unit of the university system shall maintain a positive cash balance in the funds and subfunds designated in 17-2-102(1)(d)(i)(A) through (1)(d)(i)(D) and (1)(d)(ii) through (1)(d)(vi).

(ii) If a fund or subfund inadvertently has a negative cash balance, the department of administration may allow the fund or subfund to carry the negative cash balance for no more than 7 working days. If the negative cash balance exists for more than 7 working days, a transaction may not be processed through the statewide accounting system for that fund or subfund.

(8)  Notwithstanding the provisions of subsections (2) through (4), the department of administration may authorize loans to accounting entities in the federal and state special revenue funds with long-term repayment whenever necessary because of the timing of the receipt of agreed upon reimbursements from federal, private, or other governmental entity sources for disbursements made. The department of administration may approve the loans if the requesting agency can demonstrate that the total loan balance does not exceed total receivables from federal, private, or other governmental entity sources and receivables have been billed on a timely basis. The loan must be repaid under terms and conditions as that may be determined by the department of administration or by specific legislative authorization."

Section 94.  Section 17-3-221, MCA, is amended to read:

"17-3-221.   State treasurer to be custodian of moneys money received under Taylor Grazing Act. The state treasurer shall be is the custodian of all moneys money that the treasurer of the United States may transfer transfers to the state of Montana under the terms of section 10 of the Taylor Grazing Act, 43 U.S.C. 315i, approved June 28, 1934, (Public No. 482), which provides that the secretary of the United States treasury pay one-half of the moneys received from each grazing district each year to the state where collected, to be expended as the legislature may prescribe."

Section 95.  Section 17-5-202, MCA, is amended to read:

"17-5-202.   Definitions. The following terms, wherever used or referred to in this part, have the following meanings As used in this part, the following definitions apply:

(1)  "Bonds" includes bonds, notes, warrants, debentures, certificates of indebtedness, temporary bonds, temporary notes, interim receipts, interim certificates, and all instruments or obligations evidencing or representing indebtedness or evidencing or representing the borrowing of money or evidencing or representing a charge, lien, or encumbrance on specific revenues, income, or property of a public body, including all instruments or obligations payable from a special fund.

(2)  "Public body" includes a county, city, town, school district, irrigation district, drainage district, special improvement district, or any other political or governmental subdivision of the state or any commission, authority, or agency of a political or governmental subdivision, and also includes the board of public education, the board of regents of higher education, the board of examiners, the board department of natural resources and conservation, the state transportation commission, or any other governmental agency of this state."

Section 96.  Section 17-6-103, MCA, is amended to read:

"17-6-103.   Security for deposits of public funds. The following kinds of securities may be pledged or guarantees may be issued to secure deposits of public funds:

(1)  direct obligations of the United States;

(2)  securities as to which the payment of principal and interest is guaranteed by the United States;

(3)  securities issued or fully guaranteed by the following agencies of the United States or their successors, whether or not guaranteed by the United States:

(a)  commodity credit corporation;

(b)  federal intermediate credit banks;

(c)  federal land bank;

(d)  bank for cooperatives;

(e)  federal home loan banks;

(f)  federal national mortgage association;

(g)  government national mortgage association;

(h)  small business administration;

(i)  federal housing administration; and

(j)  federal home loan mortgage corporation;

(4)  securities of or other interests in an open-end or closed-end management type investment company or investment trust registered under the Investment Company Act of 1940 (15 U.S.C. 80a-1 through 80a-64), as amended, if:

(a)  the portfolio of the investment company or investment trust is limited to United States government obligations and repurchase agreements fully collateralized by United States government obligations; and

(b)  the investment company or investment trust takes delivery of the collateral for any repurchase agreement, either directly or through an authorized custodian;

(5)  general obligation bonds of the state or of any county, city, school district, or other political subdivision of the state;

(6)  revenue bonds of any county, city, or other political subdivision of the state, when backed by the full faith and credit of the subdivision or when the revenue pledged to the payment of the bonds is derived from a water or sewer system and the issuer has covenanted to establish and maintain rates and charges for the system in an amount sufficient to produce revenue equal to at least 125% of the average annual principal and interest due on all bonds payable from the revenue during the outstanding term of the bonds;

(7)  interest-bearing warrants of the state or of any county, city, school district, or other political subdivision of the state issued in evidence of claims in an amount that, with all other claims on the same fund, does not exceed the amount validly appropriated in the current budget for expenditure from the fund in the year in which they are issued;

(8)  obligations of housing authorities of the state secured by a pledge of annual contributions or by a loan agreement made by the United States or any agency of the United States providing for contributions or a loan sufficient with other funds pledged to pay the principal of and interest on the obligations when due. The bonds and other obligations made eligible for investment in 7-15-4505 and 32-1-424(3)(a)(1)(a) may be used as security for all deposits of public funds or obligations for which depository bonds or any kind of bonds or other securities are required or may by law be deposited as security.

(9)  general obligation bonds of other states and of municipalities, counties, and school districts of other states;

(10) undertaking or guarantees issued by a surety company authorized to do business in the state;

(11) first mortgages and trust indentures on real property. The depository shall, on a quarterly basis, certify to the state treasurer that sufficient first mortgages and trust indentures on real property are available and segregated to secure deposits of public funds. The board of investments shall determine the amount of security required.

(12) bonds issued pursuant to Title 7, chapter 12, parts 21, 41, and 42;

(13) bonds issued pursuant to Title 90, chapter 6, part 1;

(14) revenue bonds issued by any unit of the university system of the state of Montana; and

(15) advance refunded bonds secured by direct obligations of the United States treasury held in irrevocable escrow."

Section 97.  Section 17-6-212, MCA, is amended to read:

"17-6-212.   State purchase of general fund warrants. (1) The state reserves a preference right, prior to the right of any person, company, or corporation, to purchase state general fund warrants issued with funds under the control of the board of investments and subject to investment.

(2)  When the board of investments has under its control any funds subject to investment that in its judgment it would be advantageous to invest in state general fund warrants and there are not sufficient funds in the state general fund to pay warrants issued against the fund at the time that they are issued and presented for payment, it shall authorize and direct the state treasurer to purchase state general fund warrants, designating the fund or funds to be invested and fixing the amount or amounts to be invested. State general fund warrants registered by the state treasurer pursuant to 17-8-304(1) and purchased by the board of investments must bear interest at a rate determined by the board. When determining the interest rate, the board shall consider:

(a)  the duration of the investment by estimating the time at which the warrants will be redeemed pursuant to 17-8-304(1); and

(b)  the interest rate of the investments liquidated to provide the funds to purchase the warrants.

(3)  The state treasurer shall attach to or stamp, write, or print upon each general fund warrant issued after the receipt of notice, until warrants totaling the amounts designated have been issued, a notice that the state will exercise its preference right to purchase the warrant.

(4)  The state treasurer shall, when the marked warrant is presented, pay it out of the proper fund as designated by the board, and the warrant purchased must be registered as other state warrants and must bear interest as provided by law.

(5)  When the designated amounts have been invested, the state treasurer shall notify the board of investments, which shall issue orders upon the proper funds addressed to the state auditor treasurer for warrants to be issued in favor of the treasurer."

Section 98.  Section 17-7-502, MCA, is amended to read:

"17-7-502.   Statutory appropriations -- definition -- requisites for validity. (1) A statutory appropriation is an appropriation made by permanent law that authorizes spending by a state agency without the need for a biennial legislative appropriation or budget amendment.

(2)  Except as provided in subsection (4), to be effective, a statutory appropriation must comply with both of the following provisions:

(a)  The law containing the statutory authority must be listed in subsection (3).

(b)  The law or portion of the law making a statutory appropriation must specifically state that a statutory appropriation is made as provided in this section.

(3)  The following laws are the only laws containing statutory appropriations: 2-9-202; 2-17-105; 2-18-812; 3-5-901; 5-13-403; 10-3-203; 10-3-310; 10-3-312; 10-3-314; 10-4-301; 15-1-111; 15-23-706; 15-30-195; 15-31-702; 15-37-117; 15-38-202; 15-65-121; 15-70-101; 16-1-404; 16-1-410; 16-1-411; 16-11-308; 17-3-106; 17-3-212; 17-5-404; 17-5-424; 17-5-804; 17-6-101; 17-6-201; 17-7-304; 18-11-112; 19-2-502; 19-6-709; 19-9-1007; 19-17-301; 19-18-512; 19-18-513; 19-18-606; 19-19-205; 19-19-305; 19-19-506; 20-8-107; 20-8-111; 20-9-361; 20-26-1503; 23-5-136; 23-5-306; 23-5-409; 23-5-610; 23-5-612; 23-5-631; 23-7-301; 23-7-402; 32-1-537; 37-43-204; 37-51-501; 39-71-503; 39-71-907; 39-71-2321; 39-71-2504; 44-12-206; 44-13-102; 50-4-623; 50-5-232; 50-40-206; 53-6-150; 53-6-703; 53-24-206; 60-2-220; 67-3-205; 75-1-1101; 75-5-1108; 75-6-214; 75-11-313; 76-12-123; 80-2-103; 80-2-222; 80-4-416; 81-5-111; 82-11-136; 82-11-161; 85-1-220; 85-20-402; 90-3-301; 90-4-215; 90-6-331; 90-7-220; 90-7-221; and 90-9-306.

(4)  There is a statutory appropriation to pay the principal, interest, premiums, and costs of issuing, paying, and securing all bonds, notes, or other obligations, as due, that have been authorized and issued pursuant to the laws of Montana. Agencies that have entered into agreements authorized by the laws of Montana to pay the state treasurer, for deposit in accordance with 17-2-101 through 17-2-107, as determined by the state treasurer, an amount sufficient to pay the principal and interest as due on the bonds or notes have statutory appropriation authority for the payments. (In subsection (3): pursuant to sec. 7, Ch. 567, L. 1991, the inclusion of 19-6-709 terminates upon death of last recipient eligible for supplemental benefit; and pursuant to sec. 7(2), Ch. 29, L. 1995, the inclusion of 15-30-195 terminates July 1, 2001.)"

Section 99.  Section 17-8-101, MCA, is amended to read:

"17-8-101.   Appropriation and disbursement of money from treasury. (1) Except as provided in subsection (5), money Money deposited in the general fund, the special revenue fund type (except money deposited in the treasury from nonstate and nonfederal sources restricted by law or by the terms of an agreement, such as a contract, trust agreement, or donation), and the capital projects fund type, with the exception of refunds authorized in subsection (3), must be paid out of the treasury only on appropriation made by law.

(2)  Money Subject to the provisions of subsection (8), money deposited in the enterprise fund type, internal service fund type, debt service fund type, expendable trust fund type, nonexpendable trust fund type, pension trust fund type, state special revenue fund from nonstate and nonfederal sources restricted by law or by the terms of an agreement, such as a contract, trust agreement, or donation, and agency fund type may be paid out of the treasury under general laws, or contracts entered into in pursuance of law, permitting the disbursement.

(3)  Subject to the provisions of subsection (8), money Money paid into the state treasury through error or under circumstances, such that the state is not legally entitled to retain it and a refund procedure is not otherwise provided by law, may be refunded upon the submission of a verified claim approved by the department of administration.

(4)  Authority to expend appropriated money may be transferred from one state agency to another, provided that the original purpose of the appropriation is maintained. The office of budget and program planning shall report semiannually to the legislative finance committee concerning all appropriations transferred under the provisions of this section.

(5)  Fees and charges for services deposited in the internal service fund type must be based upon commensurate costs. The legislative auditor, during regularly scheduled audits of state agencies, shall audit and report on the reasonableness of internal service fund type fees and charges and on the fund equity balances.

(6)  The office of budget and program planning shall include in the budget submitted to the legislature a report on:

(a)  enterprise funds, including retained earnings and contributed capital, projected operations and charges, and projected fund balances; and

(b)  internal service fund type fees and charges, including changes in the level of fees and charges, projected use of the fees and charges, and projected fund balances. Internal service fund type fees and charges must be approved by the legislature in the general appropriations act. Fees and charges in any biennium may not exceed the level approved by the legislature in the general appropriations act effective for that biennium.

(7)  Any accounts created in the enterprise fund or the internal service fund created after July 1, 1995, must be approved by the department, using conformity with generally accepted accounting principles as the primary approval criteria. The department shall report annually to the office of budget and program planning and the legislative finance committee on the nature, status, and justification for all new accounts in the enterprise fund and the internal service fund.

(8)  Enterprise and internal service funds must be appropriated if they are used as a part of a program that is not an enterprise or internal service function and otherwise requires an appropriation."

Section 100.  Section 18-1-103, MCA, is amended to read:

"18-1-103.   Resident defined. (1) For the purpose of 18-1-102, 18-1-103, and 18-1-111, and this section, the word "resident" shall include includes actual residence of an individual within this state for a period of more than 1 year immediately prior to bidding.

(2)  In a partnership enterprise or an association, the majority of all partners or association members shall must have been actual residents of the state of Montana for more than 1 year immediately prior to bidding.

(3)  Domestic corporations organized under the laws of the state of Montana are prima facie eligible to bid as residents, but this qualification may be set aside and a successful bid disallowed where when it is shown to the satisfaction of the board, commission, officer, or individual charged with the responsibility for the execution of such the contract that said the corporation is a wholly owned subsidiary of a foreign corporation or that said the corporation was formed for the purpose of circumventing the provisions relating to residence.

(4)  Notwithstanding the foregoing, any bidder on a contract for the purchase of goods, whether an individual, partnership, or corporation, foreign or domestic and regardless of ownership thereof, whose offered goods are Montana-made is a resident for the purpose of 18-1-102, 18-1-103, and 18-1-111, and this section."

Section 101.  Section 19-1-104, MCA, is amended to read:

"19-1-104.   Retirement systems to be considered separate. (1) Pursuant to section 218(d)(6) of the Social Security Act (42 U.S.C. 418(d)(6)), the public employees' retirement system of the state of Montana is, for the purposes of this chapter, considered a separate retirement system with respect to the state and a separate retirement system with respect to each political subdivision having positions covered thereby by the system.

(2)  Pursuant to section 218(p)(1) 218(l)(1) of the Social Security Act (42 U.S.C. 418(l)(1)), the Montana judges' retirement system, the sheriffs' retirement system, the Montana state game wardens' retirement system, the highway patrol officers' retirement system of the state of Montana, the public employees' retirement system of the state of Montana, and each municipal police retirement fund and each city participating in the municipal police officers' retirement system are, for the purposes of this chapter, considered separate retirement systems with respect to the state and separate retirement systems with respect to each political subdivision having positions covered thereby by those systems."

Section 102.  Section 19-1-402, MCA, is amended to read:

"19-1-402.   Contents of federal-state agreement. The agreement authorized by 19-1-401 may contain provisions relating to coverage, benefits, contributions, effective date, modification and termination of the agreement, administration, and other appropriate provisions as the state agency and secretary of health and human services shall agree upon, but, except as may be otherwise required or permitted by or under the Social Security Act as to the services to be covered, the agreement must provide in effect that:

(1)  benefits will be provided for employees whose services are covered by the agreement (and their dependents and survivors) on the same basis as though the services constituted employment within the meaning of Title II of the Social Security Act;

(2)  the state will pay to the secretary of the treasury of the United States, at a time or times as may be prescribed under the Social Security Act, contributions with respect to wages equal to the sum of the taxes that would be imposed by the Federal Insurance Contributions Act if the services covered by the agreement constituted employment within the meaning of that act;

(3)  the agreement must be effective with respect to services in employment covered by the agreement performed after a date specified in the agreement, but may not be effective with respect to services performed prior to the first day of the calendar year in which the agreement is entered into or in which the modification of the agreement making it applicable to services is entered into, except that the effective date may be made retroactive to the extent permitted by section 218(f) 218(e) of the Social Security Act (42 U.S.C. 418(e));

(4)  all services that constitute employment and are performed in the employ of the state by employees of the state must be covered by the agreement; and

(5)  all services that constitute employment, are performed in the employ of a political subdivision of the state, and are covered by a plan that is in conformity with the terms of the agreement and that has been approved by the state agency under part 5 must be covered by the agreement."

Section 103.  Section 19-1-503, MCA, is amended to read:

"19-1-503.   Required provisions of plan. A plan may not be approved unless:

(1)  it is in conformity with the requirements of the Social Security Act and with the agreement entered into under 19-1-401 and 19-1-402;

(2)  it provides that all services that constitute employment and that are performed in the employ of the political subdivisions by employees of the political subdivisions will be covered by the plan, except that it may exclude services performed by individuals to whom section 218(c)(3)(C) 218 (c)(3)(B) of the Social Security Act (42 U.S.C. 418(c)(3)(B)) is applicable;

(3)  it specifies the sources from which the funds necessary to make the payments required by 19-1-704 and 19-1-706 are expected to be derived and contains reasonable assurance that the sources will be adequate to make the payments;

(4)  it provides for methods of administration of the plan by the political subdivision as are found by the state agency to be necessary for the proper and efficient administration of the plan;

(5)  it provides that the political subdivision will make reports, in a form and containing information, as the state agency may require and will comply with the provisions that the state agency or the secretary of health and human services finds necessary to assure ensure the correctness and verification of the reports;

(6)  it authorizes the state agency, in its discretion, to terminate the plan in its entirety if it finds that there has been a failure to comply substantially with any provision contained in the plan. The termination is to take effect at the expiration of any notice and on conditions as may be provided by regulations of the state agency and may be consistent with the provisions of the Social Security Act."

Section 104.  Section 19-3-1104, MCA, is amended to read:

"19-3-1104.   Cancellation of disability retirement benefit upon reemployment. Any person receiving a disability retirement benefit who becomes an employee is considered reinstated to service from retirement, and the person's retirement benefit is canceled."

Section 105.  Section 19-3-1205, MCA, is amended to read:

"19-3-1205.   Amount of survivorship benefit. The survivorship benefit payable to a member's designated beneficiary is the actuarial equivalent of:

(1)  the accrued portion of the early retirement benefit pursuant to 19-3-906 that would have been payable to the member commencing at age 50 pursuant to 19-3-906, if the member had not attained age 50 or earned 25 years of service credit at the time of death;

(2)  if the deceased member had attained age 50 or earned 25 years of service credit at the time of death, the early retirement benefit that would have been payable to the member if the member had retired immediately prior to death; or

(3)  if the deceased member had attained age 60 or earned 30 years of service credit at the time of death, the service retirement benefit that would have been payable to the member if the member had retired immediately prior to death."

Section 106.  Section 19-9-411, MCA, is amended to read:

"19-9-411.   Election to purchase additional service. (1) At any time before retirement, a member may make a written election with the board to purchase additional service credit for the purpose of calculating the member's retirement benefit. Except as provided in subsection (3), the member may purchase 1 year of additional service credit for every 5 years of membership service that the member has qualified under the retirement system.

(2)  For each year of service credit purchased under this section, a member shall contribute to the pension trust fund an amount equal to the actuarial cost of granting the service, based on the most recent actuarial valuation of the system as determined by the board. Contributions may be made in a lump-sum payment or by making additional contributions in installments as agreed upon by the member and the board.

(3)  A member may elect to qualify no more than a combined total of 5 years of service under 19-2-705, 19-13-403 19-9-403, and this section.

(4)  Service purchased under this section is not membership service and may not be used to qualify a member for retirement or in the calculation of an actuarial reduction in benefits for a member who is not eligible for normal service retirement."

Section 107.  Section 19-9-1101, MCA, is amended to read:

"19-9-1101.   Preretirement death benefits. (1) Upon the death of a member before retirement, the member's surviving spouse or dependent child is eligible for benefits equal to one-half of the member's final average salary compensation as provided in 19-9-804.

(2)  Upon the death of an inactive nonvested member, the member's surviving spouse or dependent child is eligible for a refund of the member's accumulated contributions."

Section 108.  Section 19-20-302, MCA, is amended to read:

"19-20-302.   Active membership. (1) Unless otherwise provided by this chapter, the following persons must be active members of the retirement system, with the exception that those persons who became eligible for membership on September 1, 1937, or on September 1, 1939, and who elected not to become members under the provisions of the law at that time are not required to be members:

(a)  any person who is a teacher, principal, or district superintendent as defined in 20-1-101;

(b)  any person who is an administrative officer or a member of the instructional or scientific staff of a unit of the Montana university system and who has not elected or is not required to participate in the optional retirement program under Title 19, chapter 21;

(c)  any person employed as a speech therapist speech-language pathologist, school nurse, or school psychologist or in an instructional services capacity by the office of the superintendent of public instruction, the office of a county superintendent, a special education cooperative, a public institution of the state of Montana, the Montana state school for the deaf and blind, or a school district;

(d)  any person who is an administrative officer or a member of the instructional staff of the board of public education;

(e)  any person who has elected not to become a member of the retirement system and is reentering service in a capacity prescribed by subsection (1)(a), (1)(b), (1)(c), or (1)(d);

(f)  any person who has elected not to become a member of the retirement system, who has been continuously employed in a capacity prescribed by subsection (1)(a), (1)(b), (1)(c), or (1)(d) since the time of the election, and who may elect to become a member of the retirement system.

(2)  A person elected to the office of county superintendent of schools after July 1, 1995, is not eligible for optional membership in the public employees' retirement system under the provisions of 19-3-412 and may, within 30 days of taking office, elect to become an active member of the teachers' retirement system. The retirement system membership of an elected county superintendent of schools as of June 30, 1995, must remain unchanged for as long as the person continues to serve in the capacity of county superintendent of schools.

(3)  In order to be eligible for active membership, a person described in subsection (1) or (2) must:

(a)  be employed in the capacity prescribed for the person's eligibility for at least 30 days in any fiscal year; and

(b)  have the compensation for the person's creditable service totally paid by an employer.

(4)  (a) A substitute teacher:

(i)  may elect to become an active member of the retirement system on the first day of employment in any fiscal year; or

(ii) is required to become an active member of the retirement system on the 31st day of employment in any fiscal year if the substitute teacher has not elected membership under subsection (4)(a)(i).

(b)  The employer shall give written notification to a substitute teacher on the first day of employment in any fiscal year of the option to elect membership under subsection (4)(a)(i).

(5)  A substitute teacher who did not elect membership under subsection (4)(a)(i) and who subsequently becomes a member must be awarded creditable service for substitute teaching service if the substitute teacher contributes:

(a)  an amount equal to the combined employee and employer contributions that would have been made if the substitute teacher had elected membership; plus

(b)  interest at the rate that the contributions would have earned if they had been on deposit with the retirement system.

(6)  At any time that a person's eligibility to become a member of the retirement system is in doubt, the retirement board shall determine the person's eligibility for membership. All persons in similar circumstances must be treated alike."

Section 109.  Section 19-50-102, MCA, is amended to read:

"19-50-102.   Deferred compensation programs permitted -- rules. (1) The state or a political subdivision may establish deferred compensation plans that are eligible under section 457 of the Internal Revenue Code of 1954 (26 U.S.C. 457), as amended or superseded, and in compliance with regulations of the U.S. department of the treasury. Eligible deferred compensation plans for employees may be established in addition to any retirement, pension, or other benefit plan administered by the state or a political subdivision.

(2)  An employee may enter into a written agreement with the state or a political subdivision to defer a part of his the employee's compensation for the purpose of investment as provided by this chapter. The total amount deferred may not exceed the employee's annual salary and may not exceed the amounts permitted under applicable sections of the Internal Revenue Code.

(3)  Compensation deferred pursuant to this chapter is included as compensation for the purpose of computing retirement or pension benefits.

(4)  The amount of compensation deferred under this chapter may be used to purchase:

(a)  shares in a state deferred compensation investment fund established pursuant to Title 17 for the purpose of administering a state-invested deferred compensation plan. All contributions made by participants in the state deferred compensation investment fund and all interest or increase in the fund shall must be credited to the fund. These funds may be commingled with other state investment funds, but separate accounts must be maintained for participants in the state deferred compensation investment fund. The assets of the fund must be maintained for the benefit of participants and may not be diverted except for paying the reasonable expenses for administering the state deferred compensation investment fund.

(b)  savings accounts in federally insured financial institutions;

(c)  life insurance contracts and fixed annuity and variable annuity contracts from companies that are licensed to do business in the state and subject to regulation by the insurance commissioner; or

(d)  any combination of subsections (a), (b), or (c) above the items in subsection (4)(a), (4)(b), or (4)(c), as specified by the participant. The shares, accounts, or contracts so purchased are the exclusive property of and stand in the name of the state of Montana or a political subdivision until distributed to an employee in a manner provided in the plan agreement established by the administrator.

(5)  The administrator may allocate any necessary costs against the assets and interest earnings accumulated in funds, accounts, or contracts established under this chapter.

(6)  The department or appropriate officer of a political subdivision shall promulgate rules not inconsistent with this chapter for the proper administration of deferred compensation plans established under this chapter."

Section 110.  Section 20-1-301, MCA, is amended to read:

"20-1-301.   School fiscal year. The school fiscal year shall begin begins on July 1 and end ends on June 30. At least 180 school days of pupil instruction shall must be conducted during each school fiscal year, except that 175 days of pupil instruction for graduating seniors may be sufficient as provided in 20-9-313, or unless a variance for kindergarten has been granted under 20-1-302 or a district is granted a variance under the provisions of chapter 9, part 8, of this title. For any elementary or high school district that fails to provide for at least 180 school days of pupil instruction, the superintendent of public instruction shall reduce the county equalization as defined in 20-9-334 and the state equalization aid as defined in 20-9-343 for the district for that school year by 1/90th for each school day less than 180 school days."

Section 111.  Section 20-7-504, MCA, is amended to read:

"20-7-504.   State traffic education account -- proceeds earmarked for the account -- transmittal. (1) There is a traffic education account in the treasury of the state of Montana.

(2)  Money collected and accrued from motorcycle safety training courses, designated grants, and motorcycle registration fees or an amount equal to that amount must be deposited in the state traffic education account as provided in 20-7-513 and 20-7-514 and must be available to support only approved motorcycle safety training courses, appropriate motorcycle safety instructor training, and other related motorcycle safety training activities.

(3) When a court is required to transmit fees directly to the state treasurer, the gross proceeds including the portion of the fees to be credited to the traffic education account must be transmitted to the state treasurer and the appropriate portion must be deposited in the traffic education account."

Section 112.  Section 20-9-115, MCA, is amended to read:

"20-9-115.   Notice of preliminary budget filing and final budget meeting. Between July 10 and July 20 of each year, the clerk of each district shall publish one notice, in the local or county newspaper that the trustees of the district determine to be the newspaper with the widest circulation in the district, stating that the preliminary budget for the district for the school fiscal year just beginning, as prepared and adopted by the trustees, is on file in the clerk's office and open to inspection by all taxpayers. The notice must also state the time and place that the trustees will meet on the fourth second Monday in August for the purpose of considering and adopting the final budget of the district, that the meeting of the trustees may be continued from day to day until the final adoption of the district's budget, and that any taxpayer in the district may appear at the meeting and be heard for or against any part of the budget."

Section 113.  Section 20-9-341, MCA, is amended to read:

"20-9-341.   Definition of interest and income moneys money. (1) As used in this title, the term "interest and income moneys money" means the total of the following revenues revenue, as provided for by Article X, section 5, of the 1972 Montana constitution:

(a)  95% of the interest received from the investment of the public school fund;

(b)  95% of the interest received from the investment of any other school funds held in trust by the state board of land commissioners;

(c)  95% of the income received from the leasing of or sale of timber from state school lands after any deductions that may be made under the provisions of Title 77, chapter 1, part 6; and

(d)  95% of any other income derived from any other covenant affecting the use of state school lands.

(2)  The remaining 5% of such revenues shall the revenue described in subsections (1)(a) through (1)(d) must be annually credited to the public school fund."

Section 114.  Section 20-9-347, MCA, is amended to read:

"20-9-347.   Distribution of BASE aid and special education allowable cost payments in support of BASE funding program -- exceptions. (1) The superintendent of public instruction shall:

(a)  supply the county treasurer and the county superintendent with a monthly report of the payment of BASE aid in support of the BASE funding program of each district of the county;

(b)  in the manner described in 20-9-344, provide for a state advance to each county in an amount that is no less than the amount anticipated to be raised for the basic county tax fund as provided in 20-9-331 and for the basic special tax fund as provided in 20-9-333;

(c)  adopt rules to implement the provisions of subsection (1)(b).

(2)  (a) The superintendent of public instruction is authorized to adjust the schedule prescribed in 20-9-344 for distribution of the BASE aid payments if the distribution will cause a district to register warrants under the provisions of 20-9-212(8).

(b)  To qualify for an adjustment in the payment schedule, a district shall demonstrate to the superintendent of public instruction, in the manner required by the office, that the payment schedule prescribed in 20-9-344 will result in insufficient money available in all funds of the district to make payment of the district's warrants. The county treasurer shall confirm the anticipated deficit. This section may not be construed to authorize the superintendent of public instruction to exceed a district's annual payment for BASE aid.

(3)  The superintendent of public instruction shall:

(a)  distribute special education allowable cost payments to districts; and

(b)  supply the county treasurer and the county superintendent of public instruction schools with a report of payments for special education allowable costs to districts of the county."

Section 115.  Section 20-9-466, MCA, is amended to read:

"20-9-466.   School district bonds -- state loan -- qualifications for state loan. (1) The department of administration shall make a loan from the coal severance tax school bond contingency loan fund, established in 17-5-703, to a school district in an amount equal to the principal and interest payment on qualifying bonds when due in accordance with the provisions contained in the bonds. In order to receive a loan, the school district must:

(a)  have issued bonds between January 21, 1992, and January 1, 1993, pursuant to 20-9-421 and through 20-9-464;

(b)  be prevented from making principal and interest payments on the bonds because the debt service levy for the bonds:

(i)  has been declared invalid or unenforceable under Article II, section 4, or Article X, section 1, of the Montana constitution by a final court order; or

(ii) is prevented by an injunction;

(c)  have exhausted the debt service reserve for the bonds; and

(d)  have complied with all the requirements for the bonds contained in 20-9-467 and this section.

(2)  To qualify for the state loan described in subsection (1), a school district, before issuing its bonds, must have:

(a)  received voter approval for bonds pursuant to 20-9-421;

(b)  following voter approval, received a certificate of eligibility from the board of public education stating that after consultation with the superintendent of public instruction, the board has determined that a minimum of 75% of the principal amount of the proposed bonds will be used to:

(i)  restore, rebuild, or replace a destroyed or severely damaged school building;

(ii) correct one or more building deficiencies that affect the health and safety of school children;

(iii) correct one or more deficiencies that prevent the school district from meeting current accreditation standards; or

(iv) address any combination of circumstances described under subsections (2)(b)(i) through (2)(b)(iii); and

(c)  received a final certificate of allocation from the department of administration pursuant to subsection (5).

(3)  The board of public education shall:

(a)  maintain a record of the total principal amount of bonds for which certification has been issued; and

(b)  immediately furnish to the department a copy of each certificate issued.

(4)  Upon receipt of a copy of the certificate from the board of public education, the department shall temporarily allocate loan authority to the school district equal to the principal amount of bonds indicated in the board's certificate. The principal amount of bonds for which final certification is issued may be less than the principal amount of bonds approved by the voters pursuant to subsection (2)(a).

(5)  To obtain a final certificate of allocation, a school district shall provide the department, on a form provided by the department, the following information:

(a)  the tentative date of sale of the school district's bonds;

(b)  the principal amount of the bonds to be issued;

(c)  the name and addresses of bond counsel and the financial advisor; and

(d)  other information as requested by the department.

(6)  Upon issuance of the bonds, a school district shall forward to the department a copy of the district's bond resolution, the final opinion of bond counsel on the bonds, and a schedule of principal and interest payments on the bonds to maturity. The bond resolution must include a covenant agreeing to:

(a)  defend any lawsuit challenging the school district's authority to sell and issue the bonds and to levy a tax for payment of the principal of and interest on the bonds;

(b)  provide to the department before August 1 of each year a report of the school district's outstanding principal balance as of the preceding June 30 on the bonds secured by state loans;

(c)  refund the bonds on any normal call date if, during the term of the bonds, the school district can refund its bonds without the state loan security and without increasing its total debt service costs on the bonds; and

(d)  enter into a contract with the department establishing a schedule to repay the state if the state loans the school district money to make payments on district bonds. Notwithstanding other provisions of law, the loan must be repaid by the school district at a rate equivalent to the average yield of the pooled investment fund established in 17-6-203(3), commonly known as the short-term investment pool, for the period of the loan. Repayment must begin no later than January 1, 1994, and the The loan must be repaid in full within 10 years from the date the first loan is issued to a school district. Repayment must be paid from the sources designated for repayment of the bonds or from any other revenue and assets of the school district, including state equalization funds currently distributed or which may be distributed to the district. Loan repayments received by the department must be deposited in the coal severance tax school bond contingency loan fund.

(7)  The department shall maintain a record of the total principal amount of bonds secured by state loans.

(8)  A school district issuing bonds subject to 20-9-467 and this section may apply to the attorney general for a determination as to whether its bonds are affected by a court order declaring that the bonds of another district are invalid or unenforceable.

(9)  A school district whose authority to levy a property tax to pay principal of and interest on bonds has been challenged shall, upon notification of the challenge, immediately notify the attorney general and the department."

Section 116.  Section 20-15-326, MCA, is amended to read:

"20-15-326.   Determination of available financing -- fixing and levying property taxation for emergency budget. (1) After the last day of the fiscal year for which an emergency budget has been adopted, the board of trustees shall determine the amount of the cash balance that is available to finance the emergency budget's outstanding warrants or registered warrants for each fund included on the emergency budget. The available amount of the cash balance of each fund must be determined by deducting from the county treasurer's yearend cash balance for the fund the outstanding warrants or registered warrants issued under the regularly adopted final budget for the fund and the cash reserve for the fund that the trustees have established, within the limitations of law, for the following fiscal year.

(2)  The county treasurer shall prepare and deliver a statement on the financial cash status of each fund included on an emergency budget for a district that had an emergency budget during the preceding year to the board of county commissioners by the first Monday in August. The statement for each district emergency budget must include:

(a)  the total amount of emergency warrants that are registered against each fund of the district; and

(b)  the additional amount of money that is required to finance the registered warrants and interest on the warrants and that must be raised by a tax levy.

(3)  For each fund of the emergency budget of each district requiring a tax levy as established by subsection (2)(c) (2)(b), the board of county commissioners shall, at the time all other district and county taxes are fixed and levied, levy a tax on the taxable property of each applicable district that will raise sufficient financing to pay the amount established by the county treasurer."

Section 117.  Section 20-15-404, MCA, is amended to read:

"20-15-404.   Trustees to adhere to certain other laws. Unless the context clearly indicates otherwise, the trustees of a community college district shall adhere to:

(1)  the teachers' retirement provisions of Title 19, chapter 20;

(2)  the provisions of 20-1-201, 20-1-205, 20-1-211, and 20-1-212;

(3)  the school property provisions of 20-6-604, 20-6-605, 20-6-621, 20-6-622, 20-6-624, 20-6-631, and 20-6-633 through 20-6-636;

(4)  the adult education provisions of 20-7-701 through 20-7-713 Title 20, chapter 7, part 7;

(5)  the administration of finances provisions of 20-9-115, 20-9-134, 20-9-207, 20-9-208, 20-9-210, 20-9-215, 20-9-221, 20-9-223, and 20-9-512;

(6)  the school bond provisions of 20-9-401 through 20-9-408, 20-9-410 through 20-9-412, 20-9-421 through 20-9-446, 20-9-451 through 20-9-456, and 20-9-461 through 20-9-465;

(7)  the special purpose funds provisions of 20-9-502, 20-9-503, 20-9-507, 20-9-508, and 20-9-511;

(8)  the educational cooperative agreements provisions of 20-9-701 through 20-9-704;

(9)  the school elections provisions of Title 20, chapter 20;

(10)  the students' rights provisions of 20-25-511 through 20-25-516; and

(11)  the health provisions of 50-1-206."

Section 118.  Section 20-25-501, MCA, is amended to read:

"20-25-501.   Definitions. (1) Terms used in this part are defined as follows:

(a)  "Domicile" means a person's true, fixed, and permanent home and place of habitation.

(b)  "Emancipated minor" means a person under the age of 18 years who is self-supporting from personal earnings or is married. A person who received more than 25% of the cost of support from any person other than an agency of the government may not be considered an emancipated minor.

(c)(b)  "Minor" means a male or female person who has not obtained the age of 18 years.

(d)(c)  "Qualified person" means a person legally qualified to determine the person's own domicile.

(e)(d)  "Resident student" means:

(i)  a student who has been domiciled in Montana for 1 year immediately preceding registration at any unit for any term or session for which resident classification is claimed. Attendance as a full-time student at any college, university, or other institution of higher education is not alone sufficient to qualify for residence in Montana.

(ii)  any graduate of a Montana high school who is a citizen or resident alien of the United States and whose parents, parent, or guardian has resided in Montana at least 1 full year of the 2 years immediately preceding the student's graduation from high school. The classification continues for not more than 4 academic years if the student remains in continuous attendance at a unit; or

(iii)  a member of the armed forces of the United States assigned to and residing in Montana, the member's spouse, or the member's dependent children.

(2)  In the event that the definition of residency or any portion thereof of the definition is declared unconstitutional as it is applied to payment of nonresident fees and tuition, the regents of the Montana university system may make rules on what constitutes adequate evidence of residency status not inconsistent with those court decisions."

Section 119.  Section 22-1-412, MCA, is amended to read:

"22-1-412.   Purpose. It is the purpose of 22-1-412 and 22-1-413 and this section to establish a program whereby state funds may be appropriated to the Montana state library commission to provide the benefits of quality public library service to all residents of Montana by developing and strengthening local public libraries through library federations as defined in 22-1-402."

Section 120.  Section 22-3-429, MCA, is amended to read:

"22-3-429.   Requests for consultation -- public notice -- appeal of findings. (1)  A federal or state entity that acts upon a proposed federal or state action or an application for a federal, state, or local permit, license, lease, or funding may request the views of the historic preservation officer concerning:

(a)  the recommended eligibility for a register listing of any heritage property or paleontological remains;

(b)  the effects of a proposed action, activity, or undertaking on heritage property or remains that are found to be eligible for register listing; and

(c)  the appropriateness of a proposed plan for the avoidance or mitigation of effects.

(2)  A request for comment pursuant to 16 U.S.C. 470(f) 470f may be made simultaneously with a request pursuant to subsection (1). The historic preservation officer shall respond in writing to a request within 30 calendar days of receiving the request and shall address each property in the request and each topic of the request. In the event that an agency requests simultaneous consultation for two or more criteria under this section, the agency and historic preservation officer may extend the 30-day review period by mutual agreement. If the historic preservation officer fails to comment within that time, that failure is construed as concurrence with the agency's recommendation. In the event of failure to comment on a specific undertaking, the historic preservation officer may not change a finding for a heritage property at a later date.

(3)  If the proposed finding is that a heritage property or paleontological remains are involved and that a proposed activity will have an adverse impact on the property or remains, the proposed finding must address all properties or remains involved and describe the characteristics that illustrate the qualities that make the property or remains eligible for inclusion in the register. If the proposed finding includes a conclusion that a property or remains may be eligible but additional information or study is needed to reach an eligibility finding, the finding must specify the type and amount of information required in accordance with standards and guidelines as provided in 22-3-428.

(4)  At the time that the state or federal agency requests the views of the historic preservation officer as provided in subsection (1), the agency shall provide notice to the applicant, affected property owners, and other interested persons of the request for consultation and shall identify locations where the submitted materials may be reviewed.

(5)  The applicant and any affected property owners have 20 days in which to appeal the historic preservation officer's finding to the director. The appeal notice must include a written statement of reasons for the appeal and any additional supporting information.

(6)  The director of the historical society shall issue a final finding within 30 days of the expiration of the 20-day appeal period provided for under subsection (5). The issuance of this finding does not limit the rights of any applicant or affected property owner to challenge a finding under an existing federal law, regulation, or regulatory or administrative process.

(7)  If the applicant or an affected property owner is not satisfied with the finding of the director of the historical society concerning the eligibility of the property or remains for listing in the register or a finding of adverse effect to the property, the entity or property owner may appeal the finding to the district court in either Lewis and Clark County or a county in which affected property is located. Appeal may be taken by filing a petition with the district court citing the decision by the director of the historical society and the evidence upon which the director relied. On appeal, the district court may consider any documents supporting or not supporting the finding, the written comments received by the director of the historical society, and any additional evidence that may be submitted to the court. The district court may substitute its judgment for the judgment of the director of the historical society as to the weight of the evidence."

Section 121.  Section 22-3-603, MCA, is amended to read:

"22-3-603.   Management of historic sites and buildings -- contracts. (1) The Montana historical society may accept gifts, grants, bequests, or contributions of money, property, labor, or materials for use in the operation, maintenance, repair, preservation, or renovation of any historic site or building owned by the state of Montana.

(2)  The Montana historical society may contract with a local nonprofit corporation for the operation, maintenance, preservation, repair, or renovation of any historic site or building owned by the state. The nonprofit corporation may not be considered a public agency for purposes of Title 18, except for the provisions in chapter 2, part 2, or for the purposes of other statutes applicable to the historical society if 25% of the total annual expenses for all costs of operation, maintenance, repair, preservation, and renovation of the historic site or building is provided by in-kind or donated labor or materials by or on behalf of the contracting local nonprofit corporation. The nonprofit corporation must conform to the provisions of Title 18, chapter 2, part 2, and Title 35, chapter 2.

(3)  No A contract may not be entered into nor or any other obligation incurred for the purposes in subsection (1) until money has been appropriated by the legislature or is otherwise available. If funds are otherwise available, Title 18, chapter 2, parts 1, 3, and 4, are not applicable.

(4)  The Montana historical society may require a corporation managing a property pursuant to subsection (3) (2) to deposit in a local financial institution all profits, revenues revenue, royalties, or fees received or all gifts, grants, bequests, or other contributions collected by the corporation for the benefit of the property. All funds must be accounted for pursuant to the management contract and audited quarterly by the society or its designee, and expenditures of the funds may be used only for the operation, maintenance, preservation, repair, renovation, and management of the property."

Section 122.  Section 23-2-523, MCA, is amended to read:

"23-2-523.   Prohibited operation and mooring -- enforcement. (1) A person may not operate or knowingly permit a person to operate a motorboat or vessel or manipulate water skis, a surfboard, or a similar device or other contrivance in a reckless or negligent manner so as to endanger the life, limb, or property of a person by:

(a)  engaging in maneuvers that unreasonably or unnecessarily endanger life, limb, or property, including but not limited to weaving through congested vessel traffic or jumping the wake of another vessel unreasonably or unnecessarily close to the other vessel or when visibility around the other vessel is obstructed and including swerving at the last possible moment to avoid collision, following directly behind a waterskier, speeding in confined or restricted areas, and buzzing or wetting down others, which constitute reckless operation of a vessel;

(b)  crossing or jumping the wake of another vessel when within 100 yards of the vessel or within 100 yards of a waterskier being towed by the vessel, except when directly entering or leaving a public or private marina, waterski facility, or other watercraft docking or loading area.

(2)  A person may not operate a motorboat, including a sailboat propelled by a motor of any kind, or manipulate water skis, a surfboard, or a similar device attached to a motorboat while under the influence of alcohol, drugs, or a combination of the two.

(3)  It is unlawful for the owner of a motorboat or vessel or a person having the motorboat or vessel in charge or in control to authorize or knowingly permit the same motorboat or vessel to be operated by a person who by reason of physical or mental disability is incapable of operating the watercraft under the prevailing circumstances.

(4)  A person may not operate or knowingly permit a person to operate a motorboat or vessel at a rate of speed greater than will permit the person, in the exercise of reasonable care, to bring the vessel to a stop within the assured clear distance ahead. However, nothing in this part is intended to prevent the operator of a vessel actually competing in a regatta that is sanctioned by an appropriate governmental unit from attempting to attain high speeds on a marked racing course.

(5)  A person may not make a reckless approach to, departure from, or passage by a dock, ramp, diving board, or float.

(6)  Skiers being pulled by motorboats must have on their person a United States coast guard approved personal flotation device in good and serviceable condition.

(7)  A person may not moor a vessel to buoys or beacons placed in any waters of this state by the authority of the United States, an agency of the United States, or the department or in any manner hang on with a vessel to a buoy or beacon, except in the act of maintenance work on the buoy or beacon, nor may any person deface, remove, or destroy a buoy, beacon, or other authorized navigational marker maintained in the waters of this state.

(8)  If an officer whose duty it is to enforce the sections of this law observes a vessel being used without sufficient lifesaving or firefighting devices or in an overloaded or other unsafe condition and in the officer's judgment the use creates an especially hazardous condition, the officer may direct the operator to take whatever immediate and reasonable steps would be necessary for the safety of those aboard the vessel, including directing the operator to return to a mooring or launching site and to remain there until the situation creating the hazard is corrected or ended.

(9)  The population density and heavy recreational use of certain lakes require a noise standard more restrictive than the standard set in 23-2-526, in order to protect the public health and safety. Unless operated on a river or stream in compliance with a commission rule adopted under 23-2-521(9), a person may not operate a motorboat or personal watercraft on Flathead Lake, situated in Lake and Flathead Counties, Echo Lake, situated in Flathead County, or Swan Lake, situated in Lake County, in proximity to the shoreline if the noise emitted is greater than 75 dbA measured at the shoreline in accordance with the shoreline sound level measurement procedure (SAE J1970).

(10)  Unless accompanied by a person 18 years of age or older, a person 12 years of age or younger may not operate a motorboat or a personal watercraft that is powered by a motor rated at more than 10 horsepower. A person 13 or 14 years of age may not operate a vessel or personal watercraft powered by a motor rated at more than 10 horsepower without possessing a valid Montana motorboat operator's safety certificate or evidence of completion of a Montana-approved water safety course or unless accompanied by a person 18 years of age or older.

(11)  A person who owns or has charge or control of a motorboat or personal watercraft powered by a motor rated at more than 10 horsepower may not authorize or knowingly permit the motorboat or personal watercraft to be operated:

(a)  by a person 12 years of age or younger unless accompanied by a person 18 years of age or older; or

(b)  by a person 13 or 14 years of age unless the person possesses a valid Montana motorboat operator's safety certificate or evidence of completion of a Montana-approved water safety course or is accompanied by a person 18 years of age or older.

(12)  A person may not rent a motorboat or a personal watercraft powered by a motor rated at more than 10 horsepower to a person under 18 years of age."

Section 123.  Section 23-2-536, MCA, is amended to read:

"23-2-536.   (Temporary) Creation of boating advisory council -- appointment of members -- duties. (1) The department director appointed under 2-15-3401 shall appoint a boating advisory council to advise the department on the expenditure of funds in the motorboat account in the state special revenue fund.

(2)  The boating advisory council must be composed of at least five members of the public, each of whom must be interested in boating activities and the use of public boating facilities.

(3)  The boating advisory council is attached to the department in an advisory capacity only, as defined in 2-15-102(8).

(4)  All costs associated with the boating advisory council must be paid from the motorboat account in the state special revenue fund. Council members are not entitled to compensation or travel expenses as provided in 2-15-122. (Terminates June 30, 2002--sec. 9, Ch. 476, L. 1995.)"

Section 124.  Section 23-2-622, MCA, is amended to read:

"23-2-622.   Registration of racing snowmobile not required. A snowmobile built or used exclusively for racing in sanctioned competitive events or organized races, including testing areas designated by the sponsoring entity, is exempt from the certificate of ownership requirements of 23-6-611 23-2-611 and registration under 23-2-616."

Section 125.  Section 23-2-717, MCA, is amended to read:

"23-2-717.   Credit for overpayment -- interest on overpayment. (1) If the department of commerce determines that the amount of the assessment, penalty, or interest paid for any year is more than the amount due, the amount of the overpayment must be credited against any assessment, penalty, or interest then due from the taxpayer and the balance refunded to the taxpayer, to the taxpayer's successor through reorganization, merger, or consolidation, or to the taxpayer's shareholders upon dissolution.

(2)  Except as provided in subsection (3), interest is allowed on overpayments at the same rate as is provided in 23-2-716(2) from the due date of the return or from the date of overpayment, whichever is later, to the date the department of commerce approves refunding or crediting of the overpayment.

(3)  (a) Interest does not accrue during any period in which the processing of a claim for refund is delayed more than 30 days by reason of failure of the taxpayer to furnish information requested by the department of commerce for the purpose of verifying the amount of the overpayment.

(b)  Interest is not allowed:

(i)  if the overpayment is refunded within 6 months from the date the return is due or from the date the return is filed, whichever is later; or

(ii) if the amount of interest is less than $1.

(c)  Only a payment made incident to a bona fide and orderly discharge of actual tax liability or one reasonably assumed to be imposed by this chapter is considered an overpayment with respect to which interest is allowable."

Section 126.  Section 23-2-736, MCA, is amended to read:

"23-2-736.   Skier's conduct -- inherent risks. (1) A skier has the duty to conduct himself ski at all times so in a manner that he avoids injury to himself the skier and others and to be aware of the inherent risks of the sport.

(2)  A skier:

(a)  must know the range of his the skier's ability and safely conduct himself ski within the limits of that ability and his the skier's equipment so as to negotiate any section of terrain or ski trail safely and without injury or damage. A skier must know that his the skier's ability may vary because of trail changes caused by weather, grooming changes, or skier use.

(b)  shall maintain control of speed and course so as to prevent injury to himself the skier or others;

(c)  must shall abide by the requirements of the skier responsibility code that is published by the national ski areas association and that is current on April 4, 1989 posted as provided in 23-2-733; and

(d)  shall obey all posted or other warnings and instructions of the ski area operator.

(3)  A person may not:

(a)  place an object in the ski area or on the uphill track of a passenger tramway that may cause a passenger or skier to fall;

(b)  cross the track of a passenger tramway except at a designated and approved point; or

(c)  if involved in a skiing accident, depart from the scene of the accident without:

(i)  leaving personal identification; or

(ii) notifying the proper authorities and obtaining assistance when he the person knows that a person involved in the accident is in need of medical or other assistance.

(4)  A skier must shall accept all legal responsibility for injury or damage of any kind to the extent that the injury or damage results from risks inherent in the sport of skiing. Risks inherent in the sport of skiing are:

(a)  variations in skiing terrain, including surface and subsurface snow or ice conditions naturally occurring or resulting from weather changes, skier use, or grooming or snowmaking operations;

(b)  bare spots and thin snow cover caused by limited snowfall, melting, wind erosion, skier action, grooming, or unconsolidated base;

(c)  forest growth on designated trails;

(d)  skiing in an area not designated as a ski trail;

(e)  clearly visible or plainly marked improvements or equipment;

(f)  clearly visible or plainly marked mobile equipment and attachments, whether moving or stationary, used by the ski area operator; and

(g)  avalanches, except on open, designated ski trails."

Section 127.  Section 23-5-406, MCA, is amended to read:

"23-5-406.   Exempt charitable organizations and facilities. (1) (a) An organization granted an exemption under 26 U.S.C. 501(c)(3), (c)(4), (c)(8), or (c)(19):

(i)  on or before January 15, 1989, is exempt from taxation and the permit fee imposed by this part;

(ii) after January 15, 1989, is exempt from taxation and one-half the permit fee imposed by this part if the organization carries on gambling activities for no more than 60 days a calendar year.

(b)  An organization provided for in subsection (1)(a) shall:

(i)  limit its live bingo and keno activities to its main premises or place of operations and to events at other places operated by other charitable organizations or by a government unit or entity;

(ii) comply with other statutes and rules relating to the operation of live bingo and keno; and

(iii) apply to the department for a permit to conduct charitable live bingo or keno games.

(2)  A long-term care facility, as defined in 50-5-101, or a retirement home, as defined in subsection (4) of this section, that has obtained an operator's license and a permit from the department to operate live bingo or keno is exempt from taxation and the permit fee imposed by this part if the facility:

(a)  limits participation in live bingo and keno games to persons using the facility and their guests;

(b)  limits live bingo or keno activities to its main premises or place of operation; and

(c)  complies with other statutes and rules relating to the operation of live bingo and keno.

(3)  The department may revoke or suspend the permit of an organization or a facility provided for in subsection (1) or (2) if, after investigation, the department determines that the organization or facility is operating or has contracted with a nonqualified organization that is operating live bingo or keno in a predominantly commercial manner.

(4)  For purposes of this section, "retirement home" means a building in which sleeping rooms without cooking facilities in each room are rented to three or more persons who are 60 years of age or older and who do not need skilled nursing care, intermediate nursing care, or personal nursing care, as defined in 50-5-101."

Section 128.  Section 23-7-103, MCA, is amended to read:

"23-7-103.   Definitions. As used in this chapter, the following definitions apply:

(1)  "Commission" means the state lottery commission created by 23-7-201.

(2)  "Director" means the director appointed by the governor under 23-7-210 to administer and manage the state lottery.

(3)  "Lottery" or "state lottery" means the Montana state lottery created and operated pursuant to this chapter.

(4)  (a) "Lottery game" means any procedure, including any on-line online or other procedure using a machine or electronic device, by which one or more prizes are distributed among persons who have paid for a chance to win a prize and includes but is not limited to weekly (or other, longer time period) winner games, instant winner games, daily numbers games, and sports pool games, except.

(b) The term does not mean games prohibited by Title 23, chapter 5, part 1; lotteries prohibited Calcutta pools governed by Title 23, chapter 5, part 2; card games regulated by Title 23, chapter 5, part 3; raffles and bingo games governed by Title 23, chapter 5, part 4; and sports pools governed by Title 23, chapter 5, part 5."

Section 129.  Section 23-7-211, MCA, is amended to read:

"23-7-211.   Powers and duties of director. (1) The director shall:

(a)  administer the operation of the state lottery in accordance with this chapter and the rules and other directives of the commission;

(b)  appoint an assistant director for security and employ and direct personnel necessary to the operation of the state lottery;

(c)  license lottery ticket or chance sales agents and suspend or revoke licenses pursuant to this chapter and commission rules; and

(d)  maintain, with the assistant director for security, the security of the state lottery.

(2)  (a) With the concurrence of the commission or pursuant to commission rules, the director may enter into contracts for materials, equipment, and supplies to be used in the operation of the state lottery, for the design and installation of games, for consultant services, for promotion of the lottery, for the sale of tickets and chances, and for other services. The state shall provide for management, security, and internal audit control.

(b)  When a contract is awarded, a performance bond satisfactory to and in an amount determined by the commission and executed by a surety company authorized to do business in this state or otherwise secured in a manner satisfactory to the commission must be delivered to the commission. The requirements for this bond must be at least as stringent as those stated in 18-4-312(4)(3)."

Section 130.  Section 23-7-301, MCA, is amended to read:

"23-7-301.   Ticket or chance sales agents -- licenses. (1) Lottery tickets or chances may be sold only by ticket or chance sales agents licensed by the director in accordance with this section.

(2)  The commission shall by rule determine the places at which state lottery game tickets or chances may be sold.

(3)  (a) Before issuing a license, the director shall consider:

(i)  the financial responsibility and security of the applicant and his the applicant's business or activity;

(ii) the accessibility of his the applicant's place of business or activity to the public; and

(iii) the sufficiency of existing licenses to serve the public convenience and the volume of the expected sales.

(b)  No A person under 18 years of age may not sell lottery tickets or chances.

(c)  A license as an agent to sell lottery tickets or chances may not be issued to any person to engage in business exclusively as a lottery ticket or chance sales agent.

(4)  The director may issue temporary licenses upon conditions he that the director considers necessary.

(5)  License applicants shall pay a $50 fee to cover the cost of investigating and processing the application.

(6)  The director may require a bond from any licensed agent in an amount provided in the commission's rules and may purchase a blanket bond covering the activities of licensed agents.

(7)  A licensed agent shall display his the license or a copy thereof of the license conspicuously in accordance with the commission's rules.

(8)  A license is not assignable or transferable.

(9)  An employee of a ticket or chance sales agent may not be required to sell lottery game tickets or chances if the sale is against his the employee's religious or moral beliefs.

(10) Sales agents are entitled to a commission of no more than 10% of the face value of tickets and chances that they purchase from the lottery and do not return. However, to further the sale of lottery products, the lottery commission may adopt rules providing additional commissions to sales agents based on incremental sales. Commissions may not come from that part of all gross revenue that is net revenue and is paid to the superintendent of public instruction general fund. The commissions are statutorily appropriated, as provided in 17-7-502, to the lottery.

(11) Each sales agent shall keep a complete and up-to-date set of records and accounts fully showing his the agent's sales and provide it for inspection upon request of the commission, the director, the department of commerce, the office of the legislative auditor, or the office of the attorney general.

(12) Sales agents may pay the state lottery only by check, bankdraft, electronic fund funds transfer, or other recorded, noncash, financial transfer method as determined by the director.

(13) A license may be suspended or revoked for failure to maintain the license qualifications provided in subsection (3) or for violation of any provision of this chapter or a commission rule. Prior to suspension or revocation, the licensee must be given notice and an opportunity for a hearing."

Section 131.  Section 25-10-206, MCA, is amended to read:

"25-10-206.   Secretary of state's fee for accepting service of process. The fee of $5 paid by the plaintiff to the secretary of state pursuant to part 6 of chapter 3 and Rule 4D(6), M.R.Civ.P., shall must be taxed as part of his the plaintiff's costs if he the plaintiff prevails in the action."

Section 132.  Section 27-1-307, MCA, is amended to read:

"27-1-307.   Definitions. As used in 27-1-307 and 27-1-308 and this section:

(1)  "Collateral source" means a payment for something that is later included in a tort award and which that is made to or for the benefit of a plaintiff or is otherwise available to the plaintiff:

(a)  for medical expenses and disability payments under the federal Social Security Act, any federal, state, or local income disability act, or any other public program;

(b)  under any health, sickness, or income disability insurance or automobile accident insurance that provides health benefits or income disability coverage, and any other similar insurance benefits available to the plaintiff, except life insurance;

(c)  under any contract or agreement of any person, group, organization, partnership, or corporation to provide, pay for, or reimburse the costs of hospital, medical, dental, or other health care services, except gifts or gratuitous contributions or assistance;

(d)  any contractual or voluntary wage continuation plan provided by an employer or other system intended to provide wages during a period of disability; and

(e)  any other source, except the assets of the plaintiff or of his the plaintiff's immediate family if he the plaintiff is obligated to repay a member of his the plaintiff's immediate family.

(2)  "Person" includes individuals, corporations, associations, societies, firms, partnerships, joint-stock companies, government entities, political subdivisions, and any other entity or aggregate of individuals.

(3)  (a) "Plaintiff" means a person who alleges that he to have sustained bodily injury, or on whose behalf recovery for bodily injury or death is sought, or who would have a beneficial, legal, or equitable interest in a recovery.

(b)  The term includes:

(i)  a legal representative;

(ii) a person with a wrongful death or surviving cause of action;

(iii) a person seeking recovery on a claim for loss of consortium, society, assistance, companionship, or services; and

(iv) any other person whose right of recovery or whose claim or status is derivative of one who has sustained bodily injury or death."

Section 133.  Section 27-1-718, MCA, is amended to read:

"27-1-718.   Civil penalty for shoplifting. (1) An adult or emancipated minor, as defined in 20-25-501, who takes possession of any goods, wares, or merchandise displayed or offered for sale by any store or other mercantile establishment without the consent of the owner or seller and with the intention of converting the goods to the taker's own use without having paid the purchase price of the goods is liable to the owner or seller for a penalty, whether or not the goods have been returned undamaged, in the amount of the greater of $100 or the retail value of the goods, not to exceed $500. This amount is in addition to actual damages.

(2)  When an unemancipated minor takes possession of any goods, wares, or merchandise displayed or offered for sale by any store or other mercantile establishment without the consent of the owner or seller and with the intention of converting the goods to the minor's own use without having paid the purchase price of the goods, the minor's parent or legal guardian having custody of the minor is liable to the owner or seller for a penalty, whether or not the goods have been returned undamaged, equal to the greater of $100 or the retail value of the goods, not to exceed $500. For the purposes of this subsection (2), liability may not be imposed upon any governmental or private agency that has been assigned responsibility for the minor child pursuant to court order or action of the department of corrections or the department of public health and human services.

(3)  Judgments, but not claims, arising under this section may be assigned.

(4)  A conviction for violation of 45-6-301 is not a condition precedent to maintenance of a civil action under this section.

(5) For purposes of this section, the term "emancipated minor" means a person under 18 years of age who is self-supporting from personal earnings or is married. A person who received more than 25% of the cost of support from any person other than an agency of the government may not be considered an emancipated minor."

Section 134.  Section 30-4-213, MCA, is amended to read:

"30-4-213.   Final payment of item by payor bank -- when provisional debits and credits become final -- when certain credits become available for withdrawal. (1) An item is finally paid by a payor bank when the bank has done any of the following, whichever happens first:

(a)  paid the item in cash; or

(b)  settled for the item without having a right to revoke the settlement under statute, clearinghouse rule, or agreement; or

(c)  made a provisional settlement for the item and failed to revoke the settlement in the time and manner permitted by statute, clearinghouse rule, or agreement.

(2)  If provisional settlement for an item between the presenting and payor banks is made through a clearinghouse or by debits or credits in an account between them, then to the extent that provisional debits or credits for the item are entered in accounts between the presenting and payor banks or between the presenting and successive prior collecting banks seriatim, they become final upon final payment of the item by the payor bank.

(3)  If a collecting bank receives a settlement for an item which is or becomes final (subsections (3) and (4) of 30-4-211 and subsection (2) of 30-4-213 this section) the bank is accountable to its customer for the amount of the item and any provisional credit given for the item in an account with its customer becomes final.

(4)  Subject to applicable law stating a time for availability of funds and any right of the bank to apply the credit to an obligation of the customer, credit given by a bank for an item in a customer's account becomes available for withdrawal as of right:

(a)  if the bank has received a provisional settlement for the item, when such settlement becomes final and the bank has had a reasonable time to receive return of the item and the item has not been received within that time;

(b)  if the bank is both the depositary bank and the payor bank and the item is finally paid, at the opening of the bank's second banking day following receipt of the item.

(5)  Subject to applicable law stating a time for availability of funds and any right of a bank to apply a deposit to an obligation of the depositor, a deposit of money becomes available for withdrawal as of right at the opening of the bank's next banking day after receipt of the deposit."

Section 135.  Section 30-10-103, MCA, is amended to read:

"30-10-103.   Definitions. When used in parts 1 through 3 of this chapter, unless the context requires otherwise, the following definitions apply:

(1)  (a) "Broker-dealer" means any person engaged in the business of effecting transactions in securities for the account of others or for the person's own account.

(b)  The term does not include:

(i)  a salesperson, issuer, bank, savings institution, trust company, or insurance company; or

(ii) a person who does not have a place of business in this state if the person effects transactions in this state exclusively with or through the issuers of the securities involved in the transactions, other broker-dealers, or banks, savings institutions, trust companies, insurance companies, investment companies as defined in the Investment Company Act of 1940, pension or profit-sharing trusts, or other financial institutions or institutional buyers, whether acting for themselves or as trustee.

(2)  "Commissioner" means the securities commissioner of this state.

(3)  (a)  "Commodity" means:

(i)  any agricultural, grain, or livestock product or byproduct;

(ii)  any metal or mineral, including a precious metal, or any gem or gem stone, whether characterized as precious, semiprecious, or otherwise;

(iii)  any fuel, whether liquid, gaseous, or otherwise;

(iv)  foreign currency; and

(v)  all other goods, articles, products, or items of any kind.

(b)  Commodity does not include:

(i)  a numismatic coin with a fair market value at least 15% higher than the value of the metal it contains;

(ii)  real property or any timber, agricultural, or livestock product grown or raised on real property and offered and sold by the owner or lessee of the real property; or

(iii)  any work of art offered or sold by an art dealer at public auction or offered or sold through a private sale by the owner.

(4)  "Commodity Exchange Act" means the federal statute of that name as amended on the effective date of this subsection.

(5)  "Commodity futures trading commission" means the independent regulatory agency established by congress to administer the Commodity Exchange Act.

(6)  (a)  "Commodity investment contract" means any account, agreement, or contract for the purchase or sale, primarily for speculation or investment purposes and not for use or consumption by the offeree or purchaser, of one or more commodities, whether for immediate or subsequent delivery or whether delivery is intended by the parties and whether characterized as a cash contract, deferred shipment or deferred delivery contract, forward contract, futures contract, installment or margin contract, leverage contract, or otherwise. Any commodity investment contract offered or sold, in the absence of evidence to the contrary, is presumed to be offered or sold for speculation or investment purposes.

(b)  A commodity investment contract does not include a contract or agreement that requires, and under which the purchaser receives, within 28 calendar days after the payment in good funds of any portion of the purchase price, physical delivery of the total amount of each commodity to be purchased under the contract or agreement. The purchaser is not considered to have received physical delivery of the total amount of each commodity to be purchased under the contract or agreement when the commodity or commodities are held as collateral for a loan or are subject to a lien of any person when the loan or lien arises in connection with the purchase of each commodity or commodities.

(7)  (a)  "Commodity option" means any account, agreement, or contract giving a party to the account, agreement, or contract the right but not the obligation to purchase or sell one or more commodities or one or more commodity contracts, whether characterized as an option, privilege, indemnity, bid, offer, put, call, advance guaranty, decline guaranty, or otherwise.

(b)  The term does not include an option traded on a national securities exchange registered with the U.S. securities and exchange commission.

(8)  "Guaranteed" means guaranteed as to payment of principal, interest, or dividends.

(9)  (a)  "Investment adviser" means a person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities or who, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities.

(b)  The term includes a financial planner or other person who:

(i)  as an integral component of other financially related services, provides the investment advisory services described in subsection (9)(a) to others for compensation, as part of a business; or

(ii)  represents to any person that the financial planner or other person provides the investment advisory services described in subsection (9)(a) to others for compensation.

(c)  Investment adviser does not include:

(i)  an investment adviser representative;

(ii)  a bank, savings institution, trust company, or insurance company;

(iii)  a lawyer or accountant whose performance of these services is solely incidental to the practice of the person's profession or who does not accept or receive, directly or indirectly, any commission, payment, referral, or other remuneration as a result of the purchase or sale of securities by a client, does not recommend the purchase or sale of specific securities, and does not have custody of client funds or securities for investment purposes;

(iv)  a registered broker-dealer whose performance of services described in subsection (9)(a) is solely incidental to the conduct of business and for which the broker-dealer does not receive special compensation;

(v)  a publisher of any newspaper, news column, newsletter, news magazine, or business or financial publication or service, whether communicated in hard copy form or by electronic means or otherwise, that does not consist of the rendering of advice on the basis of the specific investment situation of each client;

(vi)  a person whose advice, analyses, or reports relate only to securities exempted by 30-10-104(1);

(vii) an engineer or teacher whose performance of the services described in subsection (9)(a) is solely incidental to the practice of the person's profession; or

(viii) other persons not within the intent of this subsection (9) as the commissioner may by rule or order designate.

(10) (a)  "Investment adviser representative" means any partner of, officer of, director of, or a person occupying a similar status or performing similar functions, or other individual employed by or associated with an investment adviser, except clerical or ministerial personnel, who:

(i)  makes any recommendation or otherwise renders advice regarding securities to clients;

(ii)  manages accounts or portfolios of clients;

(iii)  solicits, offers, or negotiates for the sale or sells investment advisory services; or

(iv)  supervises employees who perform any of the foregoing.

(b)  Investment adviser representative does not include a salesperson registered pursuant to 30-10-201(1) whose performance of the services described in subsection (10)(a) is solely incidental to the conduct of business as a salesperson and for which the salesperson does not receive special compensation other than fees relating to the solicitation or offering of investment advisory services of a registered investment adviser.

(11)  "Issuer" means any person who issues or proposes to issue any security, except that with respect to certificates of deposit, voting-trust certificates, or collateral-trust certificates or with respect to certificates of interest or shares in an unincorporated investment trust not having a board of directors (or persons performing similar functions) or of the fixed, restricted management, or unit type, the term "issuer" means the person or persons performing the acts and assuming the duties of depositor or manager pursuant to the provisions of the trust or other agreement or instrument under which the security is issued.

(12)  "Nonissuer" means not directly or indirectly for the benefit of the issuer.

(13)  "Offer" or "offer to sell" includes each attempt or offer to dispose of or solicitation of an offer to buy a security or interest in a security for value.

(13)(14)  "Person", for the purpose of parts 1 through 3 of this chapter, means an individual, a corporation, a partnership, an association, a joint-stock company, a trust in which the interests of the beneficiaries are evidenced by a security, an unincorporated organization, a government, or a political subdivision of a government.

(14)(15)  "Precious metal" means the following, in coin, bullion, or other form:

(a)  silver;

(b)  gold;

(c)  platinum;

(d)  palladium;

(e)  copper; and

(f)  other items as the commissioner may by rule or order specify.

(15)(16)  "Registered broker-dealer" means a broker-dealer registered pursuant to 30-10-201.

(16) (a)(17)  "Sale" or "sell" includes each contract of sale of, contract to sell, or disposition of a security or interest in a security for value.

(b)  "Offer" or "offer to sell" includes each attempt or offer to dispose of or solicitation of an offer to buy a security or interest in a security for value.

(c)  Any security given or delivered with or as a bonus on account of any purchase of securities or any other thing is considered to constitute part of the subject of the purchase and to have been offered and sold for value. A purported gift of assessable stock is considered to involve an offer and sale. Each sale or offer of a warrant or right to purchase or subscribe to another security of the same or another issuer, as well as each sale or offer of a security that gives the holder a present or future right or privilege to convert into another security of the same or another issuer, is considered to include an offer of the other security.

(17)(18)  "Salesperson" means an individual other than a broker-dealer who represents a broker-dealer or issuer in effecting or attempting to effect sales of securities. A partner, officer, or director of a broker-dealer or issuer is a salesperson only if the person otherwise comes within this definition. Salesperson does not include an individual who represents an issuer in:

(a)  effecting a transaction in a security exempted by 30-10-104(1), (2), (3), (8), (9), (10), or (11);

(b)  effecting transactions exempted by 30-10-105, except when registration as a salesperson, pursuant to 30-10-201, is required by 30-10-105 or by any rule promulgated under 30-10-105; or

(c)  effecting transactions with existing employees, partners, or directors of the issuer if no commission or other remuneration is paid or given directly or indirectly for soliciting any person in this state.

(18)(19)  "Securities Act of 1933", "Securities Exchange Act of 1934", "Public Utility Holding Company Act of 1935", "Investment Advisors Act of 1940", and "Investment Company Act of 1940" mean the federal statutes of those names as amended before or after July 1, 1961.

(19)(20) (a) "Security" means any note; stock; treasury stock; bond; commodity investment contract; commodity option; debenture; evidence of indebtedness; certificate of interest or participation in any profit-sharing agreement; collateral-trust certificate; preorganization certificate or subscription; transferable shares; investment contract; voting-trust certificate; certificate of deposit for a security; certificate of interest or participation in an oil, gas, or mining title or lease or in payments out of production under a title or lease; or, in general, any interest or instrument commonly known as a security, any put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities, including any interest in a security or based on the value of a security, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the foregoing.

(b)  Security does not include an insurance or endowment policy or annuity contract under which an insurance company promises to pay a fixed sum of money either in a lump sum or periodically for life or some other specified period.

(20)(21)  "State" means any state, territory, or possession of the United States, as well as the District of Columbia and Puerto Rico.

(21)(22)  "Transact", "transact business", or "transaction" includes the meanings of the terms "sale", "sell", and "offer"."

Section 136.  Section 30-10-110, MCA, is amended to read:

"30-10-110.   Scope. (1) Sections 30-10-201(1), 30-10-202, 30-10-301(1), 30-10-303, and 30-10-307 apply to persons who sell or offer to sell when an offer to sell is made in this state or an offer to buy is made and accepted in this state.

(2)  Sections 30-10-201(1), 30-10-301(1), and 30-10-303 apply to persons who buy or offer to buy when an offer to buy is made in this state or an offer to sell is made and accepted in this state.

(3)  For the purpose of this section, an offer to sell or buy is made in this state, whether or not either party is then present in this state, when the offer either originates from this state or is directed by the offeror to this state and received at the place to which it is directed or at any post office in this state in the case of a mailed offer, but for the purpose of 30-10-202, an offer to sell which that is not directed to or received by the offeree in this state is not made in this state.

(4)  For the purpose of this section, an offer to buy or sell is accepted in this state when acceptance is communicated to the offeror in this state and acceptance has not previously been communicated to the offeror, orally or in writing, outside this state. Acceptance is communicated to the offeror in this state, whether or not either party is then present in this state, when the offeree directs it to the offeror in this state, reasonably believing the offeror to be in this state, and it is received at the place to which it is directed or at any post office in this state in the case of a mailed acceptance.

(5)  An offer to sell or to buy is not made in this state when:

(a)  the publisher circulates or there is circulated on his the publisher's behalf in this state any bona fide newspaper or other publication of general, regular, and paid circulation which that is:

(i)  not published in this state; or

(ii) published in this state but has had more than two-thirds of its circulation outside this state during the past 12 months; or

(b)  a radio or television program originating outside this state is received in this state.

(6)  Sections 30-10-201(3), 30-10-301(2) and (3), and 30-10-303, as far as investment advisers and investment adviser representatives are concerned, apply when any act instrumental in effecting prohibited conduct is done in this state, whether or not either party is then present in this state.

(7)  Any security given or delivered with or as a bonus on account of any purchase of securities or any other thing is considered to constitute part of the subject of the purchase and to have been offered and sold for value. A purported gift of assessable stock is considered to involve an offer and sale. Each sale or offer of a warrant or right to purchase or subscribe to another security of the same or another issuer, as well as each sale or offer of a security that gives the holder a present or future right or privilege to convert into another security of the same or another issuer, is considered to include an offer of the other security."

Section 137.  Section 32-1-381, MCA, is amended to read:

"32-1-381.   Purpose. (1) The purpose of 32-1-381 through 32-1-384 is to:

(a)  authorize interstate banking by the acquisition of existing banks within the framework of the "Douglas amendment" to the Bank Holding Company Act of 1956 (12 U.S.C. 1841 through 1850), as amended;

(b)  provide a variety of banking alternatives in Montana in terms of the numbers and ownership of banks; and

(c)  conform Montana statutes with the provision of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, Public Law 103-328, 108 Stat. 2338, effective September 29, 1995 1994. Any inconsistencies between the provisions of 32-1-381 through 32-1-384 and Public Law 103-328 must be resolved in favor of Public Law 103-328.

(2)  Sections 32-1-381 through 32-1-384 do not authorize the establishment of a branch bank in Montana by a bank not located in Montana. Sections 32-1-371 and 32-1-375 do not apply to acquisitions or transactions authorized in 32-1-381 through 32-1-384."

Section 138.  Section 32-1-453, MCA, is amended to read:

"32-1-453.   Calculation of profits. Interest or commissions unpaid, although due or accrued, on debts owing to any bank shall may not be included in calculation of its profits, unless any the bank shall keep keeps its books on a complete accrual basis in which event any such the bank shall show on its books accrued interest receivable on notes, bonds, and other investments, unless the same shall be is past due as defined by 32-1-452, and shall also carry on its books accrued interest, taxes, and expenses payable."

Section 139.  Section 32-1-1005, MCA, is amended to read:

"32-1-1005.   Bond. Before accepting an appointment or acting as a trustee, guardian, or conservator, a foreign trust company shall file a bond with a court of competent jurisdiction in an amount as the court directs, with sufficient sureties, conditioned on the faithful discharge of its duties as trustee, guardian, or conservator. In lieu of the bond, the foreign trust company shall certify, in a manner acceptable to the department of commerce, that the capital stock of the foreign trust company is fully paid in cash, on deposit with an appropriate bank, and is of a sufficient amount to meet the requirements of 32-1-307(3) for a trust company organized under the laws of this state. The deposit must be maintained until the foreign trust company ceases to act as trustee, guardian, or conservator under this part. A foreign trust company does is not have required to file a bond or certify the deposit of its capital with respect to a trust, created other than a trust created by a will, if the trust instrument requests or directs that a bond is not required of the trustee."

Section 140.  Section 32-3-803, MCA, is amended to read:

"32-3-803.   Voting representative -- conflict of interest. (1) Each credit union that is a member of a corporate credit union may designate one person to be its voting representative in the corporate credit union. The person must be designated by the board of directors of the member credit union. The voting representative must be is eligible to hold office in the corporate credit union as if the person were a member of the corporate credit union.

(2)  (a) A director, committee member, officer, agent, or employee may not in any manner participate in the deliberation or determination of any question affecting that person's personal pecuniary interest.

(b)  A director, officer, agent, or employee may not in any manner participate in the determination of any matter material in amount, as defined by rule by the department, affecting the pecuniary interest of any corporation, partnership, or association, other than the corporate credit union, in which that person has a direct or indirect interest, except for matters involving payment of dividends to the membership.

(3)  The department shall adopt rules implementing this section in substantial conformance with Title 12, part 704, Code of Federal Regulations."

Section 141.  Section 32-6-102, MCA, is amended to read:

"32-6-102.   Electronic funds transfer systems -- applicability. The legislature has determined that electronic funds transfer systems are technologies offered by all types of financial depository institutions. These technologies provide the consumer with both convenience and efficiency in making financial transactions. Regulation E of the federal Electronic Fund Transfer Act (15 U.S.C. 1693, et seq.) addresses many of the consumer issues relating to these systems. This chapter applies to financial institutions chartered under the United States Code or Title 30 32, chapter 1, parts 1 through 5, to the extent that those laws permit."

Section 142.  Section 33-2-523, MCA, is amended to read:

"33-2-523.   Contracts on or after the operative date of 33-20-213 -- valuation. (1) This section applies to only those policies and contracts issued on or after the operative date of 33-20-213, except as otherwise provided in 33-2-524 for group annuity and pure endowment contracts issued prior to that date.

(2)  Except as otherwise provided in 33-2-524, 33-2-525, and 33-2-537(2), the minimum standard for the valuation of all the policies and contracts issued prior to October 1, 1995, must be the standard provided by the laws in effect prior to October 1, 1995. Except as otherwise provided in 33-2-524, 33-2-525, and 33-2-537(2), the minimum standard for the valuation of all policies and contracts must be the commissioner's reserve valuation methods defined in 33-2-525, 32-2-526(3) 33-2-526(3) and (4), and 33-2-537, 5% interest for group annuity and pure endowment contracts, and 3 1/2% interest for all other policies and contracts or, in the case of life insurance policies and contracts other than annuity and pure endowment contracts issued on or after March 17, 1973, 4% interest for all other policies issued prior to July 1, 1979, 5 1/2% interest for single-premium life insurance policies, and 4 1/2% interest for all other policies issued on or after July 1, 1979, and the following tables:

(a)  for all ordinary policies of life insurance issued on the standard basis, excluding any disability and accidental death benefits in the policies:

(i)  the commissioner's 1941 standard ordinary mortality table for policies issued prior to the operative date of 33-20-206, as amended, and the commissioner's 1958 standard ordinary mortality table for policies issued on or after that operative date but prior to January 1, 1989, except that for any category of the policies issued on female risks, modified net premiums and present values, referred to in 33-2-525 and 33-2-526, may be calculated, at the option of the insurer, with the approval of the commissioner, according to an age younger than the actual age of the insured; or

(ii) for policies issued on or after January 1, 1989:

(A)  the commissioner's 1980 standard ordinary mortality table;

(B)  at the election of the company for any one or more specified plans of life insurance, the commissioner's 1980 standard ordinary mortality table with 10-year select mortality factors; or

(C)  any ordinary mortality table adopted after 1980 by the national association of insurance commissioners that is approved by the commissioner by rule for use in determining the minimum standard of valuation for policies;

(b)  for all industrial life insurance policies issued on the standard basis, excluding any disability and accidental death benefits in the policies, the 1941 standard industrial mortality table for policies issued prior to the operative date of 33-20-207 and, for policies issued on or after that operative date, the commissioner's 1961 standard industrial mortality table or any industrial mortality table adopted after 1980 by the national association of insurance commissioners that is approved by the commissioner by rule for use in determining the minimum standard of valuation for the policies;

(c)  for individual annuity and pure endowment contracts, excluding any disability and accidental death benefits in the policies, the 1937 standard annuity mortality table or, at the option of the insurer, the annuity mortality table for 1949, ultimate, or any modification of either of these tables approved by the commissioner;

(d)  for group annuity and pure endowment contracts, excluding any disability and accidental death benefits in the policies, the group annuity mortality table for 1951, any modification of the table approved by the commissioner, or, at the option of the insurer, any of the tables or modifications of tables specified for individual annuity and pure endowment contracts;

(e)  (i) for total and permanent disability benefits in or supplementary to ordinary policies or contracts:

(A)  for policies or contracts issued on or after January 1, 1966, the tables of period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 disability study of the society of actuaries, with due regard to the type of benefit, or any tables of disablement rates and termination rates adopted after 1980 by the national association of insurance commissioners that are approved by the commissioner by rule for use in determining the minimum standard of valuation for the policies;

(B)  for policies or contracts issued on or after January 1, 1961, and prior to January 1, 1966, either the tables or, at the option of the insurer, the class 3 disability table (1926); and

(C)  for policies issued prior to January 1, 1961, the class 3 disability table (1926);

(ii) any table must, for active lives, be combined with a mortality table permitted for calculating the reserves for life insurance policies;

(f)  (i) for accidental death benefits in or supplementary to policies:

(A)  for policies issued on or after January 1, 1966, the 1959 accidental death benefits table or any accidental death benefits table adopted after 1980 by the national association of insurance commissioners that is approved by the commissioner by rule for use in determining the minimum standard of valuation for the policies;

(B)  for policies issued on or after January 1, 1961, and prior to January 1, 1966, either such table or, at the option of the insurer, the intercompany double indemnity mortality table; and

(C)  for policies issued prior to January 1, 1961, the intercompany double indemnity mortality table;

(ii) either table must be combined with a mortality table permitted for calculating the reserves for life insurance policies;

(g)  for group life insurance, life insurance issued on the substandard basis, and other special benefits, the tables as may be approved by the commissioner."

Section 143.  Section 33-2-830, MCA, is amended to read:

"33-2-830.   Real estate mortgages. (1) An insurer may invest any of its funds in bonds, notes, or other evidences of indebtedness which that are secured by first mortgages or deeds of trust upon improved real property located in the United States or Canada or which that are secured by first mortgages or deeds of trust upon leasehold estates having an unexpired term of not less than 21 years, inclusive of the term or terms which that may be provided by enforceable options of renewal, in improved real property located in the United States or Canada. In all cases the security for the loan must be a first lien upon such the real property, and there must may not be any condition or right of reentry or forfeiture not insured against, under which, in the case of real property other than leaseholds, such the lien can may be cut off or subordinated or otherwise disturbed or under which, in the case of leaseholds, the insurer is unable to continue the lease in force for the duration of the loan. Nothing herein shall prohibit This section does not prohibit any investment by reason of the existence of any prior lien for ground rents, taxes, assessments, or other similar charges not yet delinquent. This section shall not be deemed may not be considered to prohibit investment in mortgages or similar obligations when made under 33-2-828.

(2)  "Improved real estate property" means all farm lands used for tillage, crop, pasture, or timberlands and all real estate on which permanent improvements suitable for residential, institutional, commercial, or industrial use are situated.

(3)  (a) No such A mortgage loan or loans made or acquired by an insurer on any one property shall may not, at the time of investment by the insurer, exceed the larger of the following amounts as applicable:

(i)  80% of the value of the real property or leasehold securing the same, provided, however, or, if said the real property or leasehold consists of one- or two-family residential property, 90% of said the value;

(ii) the amount of any insurance or guaranty of such the loan by the United States of America or by any agency or instrumentality thereof of the United States; or

(iii) the amounts provided in subsection (3)(a)(i), plus the amount by which the excess of such the loan over such the amount is insured or guaranteed by the United States of America or by any agency or instrumentality thereof of the United States.

(b)  In the case of a purchase money mortgage given to secure the purchase price of real estate sold by the insurer, the amount so loaned or invested shall may not exceed the unpaid portion of the purchase price.

(4)  No such A mortgage loan or loans shall may not be made or acquired by an insurer except after an appraisal made by a qualified appraiser for the purpose of such an investment.

(5)  No such A mortgage loan made or acquired by an insurer which that is a participation or a part of a series or issue secured by the same mortgage or deed of trust shall be is not a lawful investment under this section unless the entire series or issue which that is secured by the same mortgage or deed of trust is held by such the insurer or unless the insurer holds a senior participation in such the mortgage or deed of trust, giving it substantially the rights of a first mortgagee.

(6)  No A mortgage loan upon a leasehold shall may not be made or acquired pursuant to this section unless the terms thereof shall of the loan provide for amortization payments to be made by the borrower on the principal thereof of the loan at least once in each year in amounts sufficient to completely to amortize the loan within a period of four-fifths of the term of the leasehold, inclusive of the term which that may be provided by an enforceable option of renewal, which that is unexpired at the time the loan is made, but in no event not exceeding 35 years."

Section 144.  Section 33-4-511, MCA, is amended to read:

"33-4-511.   Insurance of schools, community houses, and churches. (1) No A contract of insurance effected upon the property of any school district, rural community house, rural church, or rural public building pursuant to 33-4-501 shall be deemed to does not constitute such the school district or the owners of any such the community house, church, or public building a member of the insurer.

(2)  No A contract of insurance effected upon any rural school building, rural community house, rural church, or other rural public building referred to in 33-4-501(1)(c)(1)(d) shall be is not invalid because the directors or any director or officer of the insurer at the time of effecting the insurance coverage was a trustee, director, insurance producer, custodian, or manager or in any way in control, supervision, or management of any or all of the property so insured."

Section 145.  Section 33-10-202, MCA, is amended to read:

"33-10-202.   Definitions. As used in this part, the following definitions apply:

(1)  "Account" means any either of the three two accounts created under 33-10-203.

(2)  "Association" means the Montana life and health insurance guaranty association created under 33-10-203.

(3)  "Contractual obligation" means any obligation under covered policies.

(4)  "Covered policy" means any policy or contract within the scope of this part under subsections (4) through (6) of 33-10-201(4) through (6).

(5)  "Impaired insurer" means:

(a)  an insurer which that after July 1, 1974, becomes insolvent and is placed under a final order of liquidation, rehabilitation, or supervision by a court of competent jurisdiction; or

(b)  an insurer considered by the commissioner after July 1, 1974, to be unable or potentially unable to fulfill its contractual obligations.

(6)  (a) "Member insurer" means any an insurer that is licensed or that holds a certificate of authority to transact any kind of insurance in this state for which coverage is provided under 33-2-201 and includes any insurer whose license or certificate of authority may have been suspended, revoked, not renewed, or voluntarily withdrawn.

(b)  The term does not include:

(i)  a health service corporation;

(ii) a health maintenance organization;

(iii) a fraternal benefit society;

(iv) a mandatory state pooling plan;

(v)  a mutual assessment company or any entity that operates on an assessment basis;

(vi) an insurance exchange; or

(vii) an entity similar to any of the entities listed in subsections (6)(b)(i) through (6)(b)(vi).

(7)  "Person" means any individual, corporation, partnership, association, or voluntary organization.

(8)  (a) "Premiums" means direct gross insurance premiums and annuity considerations written on covered policies, less return premiums and considerations on premiums and dividends paid or credited to policyholders on the direct business.

(b) "Premiums" do not include premiums and considerations on contracts between insurers and reinsurers.

(c) As used in 33-10-227, "premiums" are those for the calendar year preceding the determination of impairment.

(9)  "Resident" means any a person who resides in this state at the time the impairment is determined and to whom contractual obligations are owed.

(10) "Unallocated annuity contract" means an annuity contract or group annuity certificate that is not issued to and owned by an individual, except to the extent of annuity benefits guaranteed to an individual by the insurer under the contract or certificate."

Section 146.  Section 33-16-1026, MCA, is amended to read:

"33-16-1026.   Rate filings. (1) A workers' compensation advisory organization shall file with the commissioner:

(a)  workers' compensation rates and rating plans that are limited to prospective loss costs;

(b)  each workers' compensation policy form to be used by its members or subscribers;

(c)  the uniform classification plan and rules of the advisory organization;

(d)  the uniform experience rating plan and rules of the advisory organization; and

(e)  any other information that the commissioner requests and is entitled to receive under this part.

(2)  Each insurer shall file with the commissioner all rates, supplementary rate information, and any changes and amendments made by it for use in this state as required by the commissioner under 33-16-1027(2).

(3)  An insurer may establish rates and supplementary rate information based upon the factors in 33-16-1021. An insurer may adopt by reference, with or without deviation, the prospective loss costs filed by the advisory organization designated under 33-16-1023 or the rates and supplementary rate information filed by another insurer.

(4)  An insurer may not make or issue a contract or policy of insurance under this part, except in accordance with the filings that are in effect for the insurer as provided in this part.

(5)  In addition to other prohibitions in this part, an advisory organization may not file rates, supplementary rate information, or supporting information on behalf of an insurer.

(6)  If each rate in a schedule of workers' compensation rates for specific classifications of risks filed by an insurer is not lower than the prospective loss costs contained in the schedule of workers' compensation rates for those classifications filed by the designated advisory organization under 33-16-1026(1) subsection (1), the schedule of rates filed by the insurer is not subject to 33-16-1027(1) but becomes effective upon filing."

Section 147.  Section 33-16-1035, MCA, is amended to read:

"33-16-1035.   Penalties -- suspension of license. (1) The commissioner may impose upon a person or organization that violates 33-16-1008 or 33-16-1020 through 33-16-1036 a penalty of not more than $500 for each violation.

(2)  If the commissioner determines that the violation is willful, the commissioner may impose a penalty of not more than $1,000 for each violation in addition to any other penalty provided by law.

(3)  The commissioner may suspend the license of an insurer or an advisory organization that fails to comply with any order within the time set by the order or extension granted by the commissioner. The commissioner may not suspend a license for failure to comply with an order until the time prescribed for appeal from the order has expired or, if appealed, until the order has been affirmed. The commissioner may determine the period of a suspension, which remains in effect for the period unless modified or rescinded or until the order upon which the suspension is based is modified, rescinded, or reversed.

(4)  Unless a consent decree has been entered, a penalty may not be imposed nor may a license be suspended or revoked unless the commissioner, following a hearing, issues a written order with findings of fact. The hearing must be held at least 10 days after written notice to the person or organization specifying the alleged violation.

(5)  A party aggrieved by an order or decision of the commissioner may, within 30 days after receiving the commissioner's notice, make a written request for a hearing."

Section 148.  Section 33-17-603, MCA, is amended to read:

"33-17-603.   Certificate of registration. (1) Except as provided in 33-17-604, a person may not act as or represent to the public that the person is an administrator in this state unless the person holds a certificate of registration as an administrator.

(2)  An application for a certificate of registration must be accompanied by a fee of $100. The commissioner shall issue the certificate unless the commissioner finds that the applicant is not competent, trustworthy, financially responsible, or of good personal and business reputation or that the applicant has had a previous application for a license denied for cause within 5 years.

(3)  A certificate of registration must be renewed each year by the administrator paying a continuation fee of $100 on or before July 1. Upon payment, the license certificate continues in force unless suspended, revoked, or otherwise terminated. The commissioner shall deposit the fee with the state treasurer to be credited to the general fund.

(4)  A certificate of registration may be suspended or revoked if, after notice and hearing, the commissioner finds that the administrator has violated any of the requirements of this part or that the administrator is not competent, trustworthy, financially responsible, or of good personal and business reputation.

(5)  Unless a certification requirement is waived, a person who acts as an administrator without a certificate of registration is subject to a fine of not less than $500 or more than $1,500."

Section 149.  Section 33-19-104, MCA, is amended to read:

"33-19-104.   Definitions. As used in this chapter, the following definitions apply:

(1)  (a) "Adverse underwriting decision" means any of the following actions with respect to insurance transactions involving insurance coverage that are individually underwritten:

(i)  a declination of insurance coverage;

(ii) a termination of insurance coverage;

(iii) failure of an insurance producer to apply for insurance coverage with a specific insurance institution which that the insurance producer represents and which that is requested by an applicant;

(iv) in the case of a property or casualty insurance coverage:

(A)  placement by an insurance institution or insurance producer of a risk with a residual market mechanism, an unauthorized insurer, or an insurance institution which that specializes in substandard risks; or

(B)  the charging of a higher rate on the basis of information that differs from that which the applicant or policyholder furnished;

(v)  in the case of a life, health, or disability insurance coverage, an offer to insure at higher than standard rates.

(b)  The following actions are not adverse underwriting decisions, but the insurance institution or insurance producer responsible for their occurrence shall nevertheless provide the applicant or policyholder with the specific reason or reasons for their occurrence:

(i)  the termination of an individual policy form on a class or statewide basis; or

(ii) a declination of insurance coverage solely because such that coverage is not available on a class or statewide basis; or

(iii) the rescission of a policy.

(2)  "Affiliate" or "affiliated" means a person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with another person.

(3)  "Applicant" means a person who seeks to contract for insurance coverage other than a person seeking group insurance that is not individually underwritten.

(4)  "Consumer report" means any written, oral, or other communication of information bearing on a natural person's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which that is used or expected to be used in connection with an insurance transaction.

(5)  "Consumer reporting agency" means any a person who:

(a)  regularly engages, in whole or in part, in the practice of assembling or preparing consumer reports for a monetary fee;

(b)  obtains information primarily from sources other than insurance institutions; and

(c)  furnishes consumer reports to other persons.

(6)  "Control", including the terms "controlled by" or "under common control with", means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by the person.

(7)  "Declination of insurance coverage" means a denial, in whole or in part, by an insurance institution or insurance producer of requested insurance coverage.

(8)  "Individual" means a natural person who:

(a)  regarding property or casualty insurance, is a past, present, or proposed named insured or certificate holder;

(b)  regarding life, health, or disability insurance, is a past, present, or proposed principal insured or certificate holder;

(c)  is a past, present, or proposed policyowner;

(d)  is a past or present applicant;

(e)  is a past or present claimant; or

(f)  derived, derives, or is proposed to derive insurance coverage under an insurance policy or certificate subject to this chapter.

(9)  "Institutional source" means a person or governmental entity that provides information about an individual to an insurance producer, insurance institution, or insurance-support organization, other than:

(a)  an insurance producer;

(b)  the individual who is the subject of the information; or

(c)  a natural person acting in a personal capacity rather than a business or professional capacity.

(10) (a) "Insurance institution" means a corporation, association, partnership, reciprocal exchange, interinsurer, Lloyd's insurer, fraternal benefit society, or other person engaged in the business of insurance, including health maintenance organizations, and health service corporations as defined in 33-30-101.

(b) "Insurance institution" does not include insurance producers or insurance-support organizations.

(11) "Insurance producer" means an insurance producer as defined in 33-17-102 and 33-30-311.

(12) (a) "Insurance-support organization" means a person who regularly engages, in whole or in part, in the practice of assembling or collecting information about natural persons for the primary purpose of providing the information to an insurance institution or insurance producer for insurance transactions, including:

(i)  the furnishing of consumer reports or investigative consumer reports to an insurance institution or insurance producer for use in connection with an insurance transaction; or

(ii) the collection of personal information from insurance institutions, insurance producers, or other insurance-support organizations for the purpose of detecting or preventing fraud, material misrepresentation, or material nondisclosure in connection with insurance underwriting or insurance claim activity.

(b)  The following persons are not insurance-support organizations for purposes of this chapter: insurance producers, government institutions, insurance institutions, medical care institutions, and medical professionals.

(13) "Insurance transaction" means a transaction involving insurance primarily for personal, family, or household needs, rather than for business or professional needs, that entails:

(a)  the determination of an individual's eligibility for an insurance coverage, benefit, or payment; or

(b)  the servicing of an insurance application, policy, contract, or certificate.

(14) "Investigative consumer report" means a consumer report or portion thereof containing information about a natural person's character, general reputation, personal characteristics, or mode of living obtained through personal interviews with the person's neighbors, friends, associates, acquaintances, or others who may have knowledge concerning such items of information.

(15) "Medical care institution" means a facility or institution that is licensed to provide health care services to natural persons, including but not limited to health maintenance organizations, home health agencies, hospitals, medical clinics, public health agencies, rehabilitation agencies, and skilled nursing facilities.

(16) "Medical professional" means a person licensed or certified to provide health care services to natural persons, including but not limited to a chiropractor, clinical dietitian, clinical psychologist, dentist, nurse, occupational therapist, optometrist, pharmacist, physical therapist, physician, podiatrist, psychiatric social worker, or speech therapist speech-language pathologist.

(17) "Medical record information" means personal information that:

(a)  relates to an individual's physical or mental condition, medical history, or medical treatment; and

(b)  is obtained from a medical professional or medical care institution, from the individual, or from the individual's spouse, parent, or legal guardian.

(18) "Person" means a natural person, corporation, association, partnership, or other legal entity.

(19) "Personal information" means any individually identifiable information gathered in connection with an insurance transaction from which judgments can be made about an individual's character, habits, avocations, finances, occupation, general reputation, credit, health, or any other personal characteristics. Personal information includes an individual's name and address and medical record information but does not include privileged information.

(20) "Policyholder" means a person who:

(a)  in the case of individual property or casualty insurance, is a present named insured;

(b)  in the case of individual life, health, or disability insurance, is a present policyowner; or

(c)  in the case of group insurance that is individually underwritten, is a present group certificate holder.

(21) "Pretext interview" means an interview during which a person, in an attempt to obtain information about a natural person, performs one or more of the following acts:

(a)  pretends to be someone he is not else;

(b)  pretends to represent a person he that the interviewer is not in fact representing;

(c)  misrepresents the true purpose of the interview; or

(d)  refuses to identify himself provide identification upon request.

(22) "Privileged information" means any individually identifiable information that:

(a)  relates to a claim for insurance benefits or a civil or criminal proceeding involving an individual; and

(b)  is collected in connection with or in reasonable anticipation of a claim for insurance benefits or civil or criminal proceeding involving an individual. Information otherwise meeting the requirements of privileged information under this subsection will be is considered "personal information" under this chapter if it is disclosed in violation of 33-19-306.

(23) "Residual market mechanism" means an association, organization, or other entity defined or described in 61-6-144.

(24) "Termination of insurance coverage" or "termination of an insurance policy" means either a cancellation or nonrenewal of an insurance policy, in whole or in part, for any reason other than the failure to pay a premium as required by the policy.

(25) "Unauthorized insurer" means an insurance institution that has not been granted a certificate of authority by the commissioner to transact the business of insurance in this state."

Section 150.  Section 33-22-703, MCA, is amended to read:

"33-22-703.   Coverage for mental illness, alcoholism, and drug addiction. Insurers, health service corporations, or any employees' health and welfare fund that provides accident and health insurance benefits to residents of this state under group health insurance or group health plans shall provide, for Montana residents covered under hospital and medical expenses incurred insurance group policies and under hospital and medical service plan group contracts, the level of benefits specified in this section for the necessary care and treatment of mental illness, alcoholism, and drug addiction, subject to the right of the applicant to select any alternative level of benefits above the minimum level of benefits described in subsections (1)(c), (2)(a), (2)(c), (2)(d), and (2)(e) as may be offered by the insurer or health service corporation:

(1)  under basic inpatient expense policies or contracts, inpatient hospital benefits consisting of durational limits, dollar limits, deductibles, and coinsurance factors that are not less favorable than for physical illness generally, except that:

(a)  inpatient treatment for mental illness, alcoholism, and drug addiction is subject to a maximum yearly benefit of 21 days;

(b)  inpatient treatment for mental illness may be traded on a 2-for-1 basis for a benefit for partial hospitalization through a program that complies with the standards for a partial hospitalization program that are published by the American association for partial hospitalization if the program is operated by a hospital; and

(c)  inpatient treatment for alcoholism and drug addiction is subject to a maximum benefit of $4,000 in any 24-month period and a maximum lifetime benefit of $8,000;

(2)  under major medical policies or contracts, inpatient benefits and outpatient benefits consisting of durational limits, dollar limits, deductibles, and coinsurance factors that are not less favorable than for physical illness generally, except that:

(a)  inpatient treatment for mental illness, alcoholism, and drug addiction is subject to a maximum yearly benefit of 21 days;

(b)  inpatient treatment for mental illness may be traded on a 2-for-1 basis for a benefit for partial hospitalization through a program that complies with the standards for a partial hospitalization program that are published by the American association for partial hospitalization if the program is operated by a hospital;

(c)  inpatient treatment for alcoholism and drug addiction may be subject to a maximum benefit of $4,000 in any 24-month period and a maximum lifetime benefit of $8,000;

(d)  outpatient treatment for mental illness may be subject to a maximum yearly benefit of no less than $2,000; and

(e)  outpatient treatment for alcoholism and drug addiction is subject to a maximum yearly benefit of $1,000."

Section 151.  Section 33-22-1108, MCA, is amended to read:

"33-22-1108.   Preexisting condition -- definition. (1) A long-term care insurance policy or certificate other than a policy or certificate issued to a group as defined described in 33-22-1107(3)(a)(4)(a) may not use a definition of preexisting condition which that is more restrictive than the definition in 33-22-1107.

(2)  A long-term care insurance policy or certificate may not exclude coverage for a loss or confinement that is the result of a preexisting condition unless the loss or confinement begins within 6 months following the effective date of coverage of an insured person.

(3)  The commissioner may extend the limitation periods in subsections (1) and (2) as to specific age group categories in specific policy forms if extending the limitation periods is in the best interests of the public.

(4)  An insurer may use an application form designed to elicit the complete health history of an applicant and on the basis of the answers on that application perform underwriting in accordance with the insurer's established underwriting standards. Unless otherwise provided in the long-term care insurance policy or certificate, a preexisting condition, regardless of whether it is disclosed on the application, need not be covered until the waiting period described in subsection (2) expires. A long-term care insurance policy or certificate may not exclude or use a waiver or rider of any kind to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the waiting period described in subsection (2)."

Section 152.  Section 33-22-1521, MCA, is amended to read:

"33-22-1521.   Association plan -- minimum benefits. A plan of health coverage must be certified as an association plan if it otherwise meets the requirements of Title 33, chapters 15, 22 (excepting part 7), and 30, and other laws of this state, whether or not the policy is issued in this state, and meets or exceeds the following minimum standards:

(1)  (a) The minimum benefits for an insured must, subject to the other provisions of this section, be equal to at least 50% of the covered expenses required by this section in excess of an annual deductible that does not exceed $1,000 per person. The coverage must include a limitation of $5,000 per person on the total annual out-of-pocket expenses for services covered under this section. Coverage must be subject to a maximum lifetime benefit, but the maximums may not be less than $100,000.

(b)  One association plan must be offered with coverage for 80% of the covered expenses provided in this section in excess of an annual deductible that does not exceed $1,000 per person. This association plan must provide a maximum lifetime benefit of $500,000.

(2)  Covered expenses must be the usual and customary charges for the following medically necessary services and articles when prescribed by a physician or other licensed health care professional and when designated in the contract:

(a)  hospital services;

(b)  professional services for the diagnosis or treatment of injuries, illness, or conditions, other than dental;

(c)  use of radium or other radioactive materials;

(d)  oxygen;

(e)  anesthetics;

(f)  diagnostic x-rays and laboratory tests, except as specifically provided in subsection (3);

(g)  services of a physical therapist;

(h)  transportation provided by licensed ambulance service to the nearest facility qualified to treat the condition;

(i)  oral surgery for the gums and tissues of the mouth when not performed in connection with the extraction or repair of teeth or in connection with TMJ;

(j)  rental or purchase of durable medical equipment, which must be reimbursed after the deductible has been met at the rate of 50%, up to a maximum of $1,000;

(k)  prosthetics, other than dental;

(l)  services of a licensed home health agency, up to a maximum of 180 visits per year;

(m)  drugs requiring a physicians physician's prescription that are approved for use in human beings in the manner prescribed by the United States food and drug administration, covered at 50% of the expense, up to an annual maximum of $1,000;

(n)  medically necessary, nonexperimental transplants of the kidney, pancreas, heart, heart/lung, lungs, liver, cornea, and high-dose chemotherapy bone marrow transplantation, limited to a lifetime maximum of $150,000, with an additional benefit not to exceed $10,000 for expenses associated with the donor;

(o)  pregnancy, including complications of pregnancy;

(p)  newborn infant coverage, as required by 33-22-301;

(q)  sterilization;

(r)  immunizations;

(s)  outpatient rehabilitation therapy;

(t)  foot care for diabetics;

(u)  services of a convalescent home, as an alternative to hospital services, limited to a maximum of 60 days per year; and

(v)  travel, other than transportation by a licensed ambulance service, to the nearest facility qualified to treat the patients medical condition when approved in advance by the insurer.

(3)  (a) Covered expenses for the services or articles specified in this section do not include:

(i)  home and office calls, except as specifically provided in subsection (2);

(ii) rental or purchase of durable medical equipment, except as specifically provided in subsection (2);

(iii) the first $20 of diagnostic x-ray and laboratory charges in each 14-day period;

(iv) oral surgery, except as specifically provided in subsection (2);

(v)  that part of a charge for services or articles that exceeds the prevailing charge in the locality where the service is provided; or

(vi) care that is primarily for custodial or domiciliary purposes that would not qualify as eligible services under medicare.

(b)  Covered expenses for the services or articles specified in this section do not include charges for:

(i)  care or for any injury or disease either arising out of an injury in the course of employment and subject to a workers' compensation or similar law, for which benefits are payable under another policy of disability insurance or medicare;

(ii) treatment for cosmetic purposes other than surgery for the repair or treatment of an injury or congenital bodily defect to restore normal bodily functions;

(iii) travel other than transportation provided by a licensed ambulance service to the nearest facility qualified to treat the condition, except as provided by subsection (2);

(iv) confinement in a private room to the extent that it is in excess of the institution's charge for its most common semiprivate room, unless the private room is prescribed as medically necessary by a physician;

(v)  services or articles the provision of which is not within the scope of authorized practice of the institution or individual rendering the services or articles;

(vi) room and board for a nonemergency admission on Friday or Saturday;

(vii) routine well baby care;

(viii) complications to a newborn, unless no other source of coverage is available;

(ix) reversal of sterilization;

(x)  abortion, unless the life of the mother would be endangered if the fetus were carried to term;

(xi) weight modification or modification of the body to improve the mental or emotional well-being of an insured;

(xii) artificial insemination or treatment for infertility; or

(xiii) breast augmentation or reduction."

Section 153.  Section 33-31-311, MCA, is amended to read:

"33-31-311.   Insurance producer license required -- application, issuance, renewal, fees -- penalty. (1) No An individual, partnership, or corporation may not act as or hold himself out to be represent to the public that the individual, partnership, or corporation is an insurance producer of a health maintenance organization unless he the individual, partnership, or corporation is:

(a)  licensed as a disability insurance producer by the commissioner pursuant to chapter 17, parts 1, 2, and 4 of this title or licensed as an insurance producer under as provided in 33-30-311 through 33-30-313; and

(b)  appointed or authorized by the health maintenance organization to solicit health care service agreements on its behalf.

(2)  Application, appointment, and qualification for a health maintenance organization insurance producer license, fees applicable to and the issuance of a health maintenance organization insurance producer license, and renewal of a health maintenance organization insurance producer license must be in accordance with the provisions of chapter 17 that apply to a disability insurance producer.

(3)  An individual, partnership, or corporation who holds a disability insurance producer license on October 1, 1987, need not requalify by an examination to be licensed as a health maintenance organization insurance producer.

(4)  The commissioner may, in accordance with 33-1-313, 33-1-317, 33-17-411, and chapter 17, part 10, suspend, revoke, refuse to issue or renew a health maintenance organization insurance producer license, or impose a fine upon the licensee."

Section 154.  Section 35-1-933, MCA, is amended to read:

"35-1-933.   Articles of dissolution. (1) (a) At any time after dissolution is authorized, the corporation may dissolve by delivering to the secretary of state, for filing, articles of dissolution setting forth:

(a)(i)  the name of the corporation;

(b)(ii)  the date dissolution was authorized; and

(c)(iii)  if dissolution was approved by the shareholders:

(i)(A)  the number of votes entitled to be cast on the proposal to dissolve; and

(ii)(B) either the total number of votes cast for and against dissolution or the total number of undisputed votes cast for dissolution and a statement that the number cast for dissolution was sufficient for approval; and.

(d)(b)  if If voting by voting groups is required, the information required by subsection (1)(c) (1)(a)(iii) must be separately provided for each voting group entitled to vote separately on the plan to dissolve.

(2)  A corporation is dissolved upon the effective date of its articles of dissolution."

Section 155.  Section 35-1-934, MCA, is amended to read:

"35-1-934.   Revocation of dissolution. (1) A corporation may revoke its dissolution within 120 days of the effective date of the articles of dissolution.

(2)  Revocation of dissolution must be authorized in the same manner as the dissolution was authorized unless that authorization permitted revocation by action of the board of directors alone, in which event the board of directors may revoke the dissolution without shareholders' action.

(3)  After the revocation of dissolution is authorized, the corporation may revoke the dissolution by delivering to the secretary of state, for filing, articles of revocation of dissolution, together with a copy of its articles of dissolution, that set forth:

(a)  the name of the corporation;

(b)  the effective date of the dissolution that was revoked;

(c)  the date that the revocation of dissolution was authorized;

(d)  if the corporation's board of directors or incorporators revoked the dissolution, a statement to that effect;

(e)  if the corporation's board of directors revoked a dissolution authorized by the shareholders, a statement that revocation was permitted on action by the board of directors alone pursuant to that authorization; and

(f)  if shareholder action was required to revoke the dissolution, the information required by 35-1-933(1)(c) or (1)(d)(1)(a)(iii) or (1)(b).

(4)  Unless a delayed effective date is specified, revocation of dissolution is effective when the articles of revocation of dissolution are filed.

(5)  When the revocation of dissolution is effective, it relates back to and takes effect as of the effective date of the dissolution, and the corporation resumes carrying on its business as if dissolution had never occurred."

Section 156.  Section 35-1-1107, MCA, is amended to read:

"35-1-1107.   Inspection of records by shareholders. (1) Subject to 35-1-1108(3), a shareholder of a corporation is entitled to inspect and copy, during regular business hours at the corporation's principal office, any of the records of the corporation described in 35-1-1106(5) if the shareholder gives the corporation written notice of the demand at least 5 business days before the date on which the shareholder wishes to inspect and copy.

(2)  A shareholder of a corporation is entitled to inspect and copy, during regular business hours at a reasonable location specified by the corporation, any of the following records of the corporation if the shareholder meets the requirements of subsection (3) and gives the corporation written notice of the demand at least 5 business days before the date on which the shareholder wishes to inspect and copy:

(a)  excerpts from minutes of any meeting of the board of directors, records of any action of a committee of the board of directors while acting in place of the board of directors on behalf of the corporation, minutes of any meeting of the shareholders, and records of action taken by the shareholders or board of directors without a meeting, to the extent not subject to inspection under 35-1-1107(1) subsection (1);

(b)  accounting records of the corporation; and

(c)  the record of shareholders.

(3)  A shareholder may inspect and copy the records identified in subsection (2) only if:

(a)  the demand is made in good faith and for a proper purpose;

(b)  the shareholder describes with reasonable particularity the purpose and the records the shareholder desires to inspect;

(c)  the records are directly connected with his the shareholder's purpose; and

(d)  the shareholder has been a shareholder of record for at least 6 months preceding the demand or the shareholder is a holder of record of at least 5% of all the outstanding shares of the corporation.

(4)  The right of inspection granted by this section may not be abolished or limited by a corporation's articles of incorporation or bylaws.

(5)  This section does not affect:

(a)  the right of a shareholder to inspect records under 35-1-523 or, if the shareholder is in litigation with the corporation, to the same extent as any other litigant; or

(b)  the power of a court, independently of this chapter, to compel the production of corporate records for examination.

(6)  For purposes of this section, "shareholder" includes a beneficial owner whose shares are held in a voting trust or by a nominee on his the shareholder's behalf."

Section 157.  Section 37-25-305, MCA, is amended to read:

"37-25-305.   Representation to public as nutritionist -- limitation on use of title. No A person may not represent himself to the public by any title, sign, or advertisement or description of services as that the person is a nutritionist or a licensed nutritionist unless he the person has been licensed under this chapter or has met the requirements of 37-25-102(10)(b)(9)(b)."

Section 158.  Section 37-29-302, MCA, is amended to read:

"37-29-302.   Exceptions. The provisions of this chapter do not apply to:

(1)  a person interning under the direct supervision of a licensed denturist as required by 37-29-303(2), provided that no a denturist may not supervise more than one such person intern at any one time;

(2)  the practice of dentistry or medicine by persons authorized to do so by the state of Montana; or

(3)  a student of denturitry in pursuit of clinical studies under a school program or internship as required by 37-29-303(2)."

Section 159.  Section 37-29-305, MCA, is amended to read:

"37-29-305.   Examinations. The board shall administer the examinations for licensure, subject to the following requirements:

(1)  Examinations must be of such a character as to determine that determines the qualifications, fitness, and ability of the applicant to practice denturitry. The form of the test must include written and oral examinations and a practical demonstration of skills.

(2)  Examinations must be held at least annually on the second Monday in July. An applicant must obtain an average percentage score of 75% or better to qualify for licensure. The written and practical examinations shall must carry equal weight. The oral examination results may adjust an average score only two percentage points.

(3)  The written examination must include coverage of the following subjects:

(a)  head and oral anatomy and physiology;

(b)  oral pathology;

(c)  partial denture construction and design;

(d)  microbiology;

(e)  radiology;

(f)  clinical dental technology;

(g)  dental laboratory technology;

(h)  asepsis;

(i)  clinical jurisprudence;

(j)  medical emergencies.

(4)  Applicants who fail to score a 75% average on the written and practical examinations may, upon payment of the appropriate fee, have a second opportunity to take the written or practical examinations, or both, provided that all applicants under 37-29-303(1) are examined on or before April 1, 1985."

Section 160.  Section 39-3-406, MCA, is amended to read:

"39-3-406.   Exclusions. (1) The provisions of 39-3-404 and 39-3-405 do not apply with respect to:

(a)  students participating in a distributive education program established under the auspices of an accredited educational agency;

(b)  persons employed in private homes whose duties consist of menial chores, such as babysitting, mowing lawns, and cleaning sidewalks;

(c)  persons employed directly by the head of a household to care for children dependent upon the head of the household;

(d)  immediate members of the family of an employer or persons dependent upon an employer for half or more of their support in the customary sense of being a dependent;

(e)  any persons who are not regular employees of a nonprofit organization and who voluntarily offer their services to a nonprofit organization on a fully or partially reimbursed basis;

(f)  handicapped workers engaged in work that is incidental to training or evaluation programs or whose earning capacity is so severely impaired that they are unable to engage in competitive employment;

(g)  apprentices or learners, who may be exempted by the commissioner for a period not to exceed 30 days of their employment;

(h)  learners under the age of 18 who are employed as farm workers, provided that the exclusion may not exceed 180 days from their initial date of employment and further provided that during this exclusion period, wages paid the learners may not be less than 50% of the minimum wage rate established in this part;

(i)  retired or semiretired persons performing part-time incidental work as a condition of their residence on a farm or ranch;

(j)  any individual employed in a bona fide executive, administrative, or professional capacity as these terms are defined by regulations of the commissioner;

(k)  any individual employed by the United States of America;

(l)  resident managers employed in lodging establishments or personal care facilities who, under the terms of their employment, live in the establishment or facility;

(m)  an outside salesperson or marketing representative paid on a commission, contract, or salary basis who is primarily employed in selling or marketing products or services in the food distribution industry for a food broker, wholesaler, or association;

(n)  a direct seller as defined in 26 U.S.C. 3508.

(2)  The provisions of 39-3-405 do not apply to:

(a)  an employee with respect to whom the United States secretary of transportation has power to establish qualifications and maximum hours of service pursuant to the provisions of 49 U.S.C. 304 31502;

(b)  an employee of an employer subject to 49 U.S.C. 10501 and 49 U.S.C. 60501, the provisions of part I of the Interstate Commerce Act;

(c)  an individual employed as an outside buyer of poultry, eggs, cream, or milk, in their raw or natural state;

(d)  an outside salesperson paid on a commission or contract basis who is primarily employed in selling advertising for a newspaper;

(e)  a salesperson, parts person, or mechanic paid on a commission or contract basis and primarily engaged in selling or servicing automobiles, trucks, mobile homes, recreational vehicles, or farm implements if the salesperson, parts person, or mechanic is employed by a nonmanufacturing establishment primarily engaged in the business of selling the vehicles or implements to ultimate purchasers;

(f)  a salesperson primarily engaged in selling trailers, boats, or aircraft if the salesperson is employed by a nonmanufacturing establishment primarily engaged in the business of selling trailers, boats, or aircraft to ultimate purchasers;

(g)  an outside salesperson paid on a commission or contract basis who is primarily employed in selling office supplies, computers, or other office equipment for an office equipment dealer;

(h)  a salesperson paid on a commission or contract basis who is primarily engaged in selling advertising for a radio or television station employer;

(i)  an employee employed as a driver or driver's helper making local deliveries who is compensated for the employment on the basis of trip rates or other delivery payment plan if the commissioner finds that the plan has the general purpose and effect of reducing hours worked by the employees to or below the maximum workweek applicable to them under 39-3-405;

(j)  an employee employed in agriculture or in connection with the operation or maintenance of ditches, canals, reservoirs, or waterways that are not owned or operated for profit, and that are not operated on a sharecrop basis, and that are used exclusively for supply and storing of water for agricultural purposes;

(k)  an employee employed in agriculture by a farmer, notwithstanding other employment of the employee in connection with livestock auction operations in which the farmer is engaged as an adjunct to the raising of livestock, either alone or in conjunction with other farmers, if the employee is:

(i)  primarily employed during a workweek in agriculture by a farmer; and

(ii) paid for employment in connection with the livestock auction operations at a wage rate not less than that prescribed by 39-3-404;

(l)  an employee of an establishment commonly recognized as a country elevator, including an establishment that sells products and services used in the operation of a farm, if no more than five employees are employed by the establishment;

(m)  a driver employed by an employer engaged in the business of operating taxicabs;

(n)  an employee who is employed with the employee's spouse by a nonprofit educational institution to serve as the parents of children who are orphans or one of whose natural parents is deceased or who are enrolled in the institution and reside in residential facilities of the institution so long as the children are in residence at the institution and so long as the employee and the employee's spouse reside in the facilities and receive, without cost, board and lodging from the institution and are together compensated, on a cash basis, at an annual rate of not less than $10,000;

(o)  an employee employed in planting or tending trees; cruising, surveying, or felling timber; or transporting logs or other forestry products to a mill, processing plant, railroad, or other transportation terminal if the number of employees employed by the employer in the forestry or lumbering operations does not exceed eight;

(p)  an employee of a sheriff's department who is working under an established work period in lieu of a workweek pursuant to 7-4-2509(1);

(q)  an employee of a municipal or county government who is working under a work period not exceeding 40 hours in a 7-day period established through a collective bargaining agreement when a collective bargaining unit represents the employee or by mutual agreement of the employer and employee when a bargaining unit is not recognized. Employment in excess of 40 hours in a 7-day, 40-hour work period must be compensated at a rate of not less than 1 1/2 times the hourly wage rate for the employee.

(r)  an employee of a hospital or other establishment primarily engaged in the care of the sick, disabled, aged, or mentally ill or defective who is working under a work period not exceeding 80 hours in a 14-day period established through either a collective bargaining agreement when a collective bargaining unit represents the employee or by mutual agreement of the employer and employee when a bargaining unit is not recognized. Employment in excess of 8 hours a day or 80 hours in a 14-day period must be compensated for at a rate of not less than 1 1/2 times the hourly wage rate for the employee.

(s)  a firefighter who is working under a work period established in a collective bargaining agreement entered into between a public employer and a firefighters' organization or its exclusive representative;

(t)  an officer or other employee of a police department in a city of the first or second class who is working under a work period established by the chief of police under 7-32-4118;

(u)  an employee of a department of public safety working under a work period established pursuant to 7-32-115;

(v)  an employee of a retail establishment if the employee's regular rate of pay exceeds 1 1/2 times the minimum hourly rate applicable under section 206 of the Fair Labor Standards Act of 1938 (29 U.S.C. 206) and if more than half of the employee's compensation for a period of not less than 1 month is derived from commissions on goods and services;

(w)  a person employed as a guide, cook, camp tender, or livestock handler by a licensed outfitter as defined in 37-47-101;

(x)  an employee employed as a radio announcer, news editor, or chief engineer by an employer in a second- or third-class city or a town."

Section 161.  Section 39-8-207, MCA, is amended to read:

"39-8-207.   Requirements of licensee. (1) A professional employer organization or group shall, by written contract with the client, establish the responsibilities and duties of each party. The contract must disclose to the client:

(a)  the services provided, the administrative fee, and the respective rights and obligations of the parties;

(b)  a statement providing that the professional employer organization or group:

(i)  reserves a right of direction and control over employees assigned to the client's location. The client may retain sufficient direction and control over employees necessary to conduct business and without which the client would be unable to conduct business, discharge fiduciary responsibilities, or comply with state licensing laws.

(ii) assumes responsibility for the payment of wages of employees, workers' compensation premiums, payroll-related taxes, and employee benefits from its own accounts without regard to payments by the client; and

(iii) retains authority to hire, terminate, discipline, and reassign employees. The client has the right to accept or cancel the assignment of an employee.

(c)  a statement that, with respect to a worker supplied to a client by a professional employer organization or group, the client shares joint and several liability for any wages, workers' compensation premiums, and payroll-related taxes, and for any benefits left unpaid by the professional employer organization or group and that, in the event that the licensee's license is suspended or revoked, this liability is retroactive to the client's entering into a contract with the licensee; and

(d)  a statement that the client is responsible for compliance with the Montana Safety Culture Act, Title 39, chapter 71, part 15.

(2)  The professional employer organization or group shall:

(a)  give written notice of the general nature of the relationship between the professional employer organization or group and the client to each employee assigned to perform services at the client's place of work. The disclosure must provide that the professional employer organization:

(i)  reserves a right of direction and control over employees assigned to the client's location. The client may retain sufficient direction and control over employees necessary to conduct business and without which the client would be unable to conduct business, discharge fiduciary responsibilities, or comply with state licensing laws.

(ii) retains authority to hire, terminate, discipline, and reassign employees. The client has the right to accept or cancel the assignment of an employee.

(b)  submit to the department, within 90 days of the end of each calendar quarter, information certified by an independent certified public accountant demonstrating that all payroll-related taxes for the quarter have been paid. Upon a showing of reasonable cause, one 30-day extension may be granted for each quarter.

(c)  maintain and make available for the department or its agent all records relating to the licensee's business conduct. Records must be maintained for 5 years after terminating an employee leasing arrangement or professional employer arrangement.

(d)  notify the department in writing within 20 days of a change of business address or a change in partners, directors, officers, members, or controlling persons designated in the license;

(e)  notify the department in writing within 20 days after a client either commences or terminates a professional employer arrangement or an employee leasing arrangement with that professional employer organization or group; and

(f)  post the license issued in a conspicuous place in the principal place of business and display, in clear public view in each licensee's office, a notice stating that the professional employer organization or group is licensed and regulated by the department.

(3)  When a professional employer organization or group uses a professional employer arrangement with the client, both the professional employer organization or group and the client are the immediate employers of the workers subject to the arrangement for the purposes of the workers' compensation laws of this state. When a professional employer organization or group uses an employee leasing arrangement with the client, the professional employer organization or group is the immediate employer of the workers subject to the arrangement for the purposes of the workers' compensation laws of this state.

(4)  A professional employer organization or group shall:

(a)  pay wages and collect, report, and pay payroll-related taxes from its own accounts;

(b)  pay unemployment taxes, pursuant to 39-51-1103, and provide, maintain, and secure all records and documents required of employers under the unemployment insurance laws of this state. For unemployment reporting purposes, each professional employer organization is the employing unit, as defined in 39-51-201, and shall keep separate records and submit quarterly wage lists for each of its clients.

(c)  provide workers' compensation coverage for all employees and provide, maintain, and secure all records and documents required of employers under the workers' compensation laws of this state. A license may not be issued to a professional employer organization or group until the department receives proof of workers' compensation coverage for all employees assigned to any client location in this state.

(5)  A professional employer organization or group is the employer for sponsoring and maintaining employee benefit and welfare plans. The plans, if limited to employees of the professional employer organization or group, are not multiple employer welfare arrangements.

(6)  A professional employer organization or group shall disclose to the department, to each client, and to its employees information on any health or life fringe benefit program provided for its employees. The information must include:

(a)  the type of benefits;

(b)  the identity of each insurer providing each type of coverage;

(c)  the amount of benefits for each type of coverage and to whom or on whose behalf the benefits will be paid;

(d)  the policy limits on each insurance policy; and

(e)  whether coverage is fully insured, partially insured, or fully self-funded.

(7)  Disclosure required by this section may be made by any written means reasonably calculated to adequately inform the employees, including a summary plan description that meets the requirements of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001, et seq.), as amended.

(8)  (a) Subject to any contrary provisions of the contract between the client and the professional employer organization or group, the professional employer arrangement that exists between the parties must be interpreted for purposes of insurance, bonding, and employer liability pursuant to subsection (8)(b).

(b)  The professional employer organization or group:

(i)  is entitled, along with the client, to the exclusivity of the remedy under both the workers' compensation and employers' liability provisions of a workers' compensation policy or plan of either party; and

(ii) is not liable for the acts, errors, or omissions of a client or of an employee acting under the direction and control of a client, subject to the provisions of this chapter. Subject to the provisions of this chapter, a client is not liable for the acts, errors, or omissions of a professional employer organization or group or of any employee of a professional employer organization or group acting under the direction and control of the professional employer organization or group.

(9)  A professional employer organization that applies for workers' compensation coverage shall also maintain and furnish to the insurer sufficient information to permit the calculation of an experience modification factor for each client employer, including but not limited to:

(a)  the client employer's corporate or business name;

(b)  the client employer's taxpayer or employer identification number;

(c)  the client employer's risk identification number;

(d)  a listing of all employees assigned to each client employer and the applicable classification code and payroll; and

(e)  the client employer's first report of injury identifying the client employer and any other information necessary to permit the calculation of an experience modification factor for each client employer.

(10) An employee assigned to a client by a professional employer organization or group is considered the employee of the client for purposes of general liability insurance, motor vehicle insurance, fidelity bonds, surety bonds, and liquor liability insurance carried by the client. An employee assigned to a client by a professional employer organization or group is not an employee of the professional employer organization or group for purposes of general liability insurance, motor vehicle insurance, fidelity bonds, surety bonds, or liquor liability insurance carried by the professional employer organization or group unless the employee is included by reference in an employment arrangement contract, insurance contract, or bond.

(11) The sale of professional employer services pursuant to this chapter does not constitute the sale of insurance under Title 33 unless the professional employer organization or group:

(a)  undertakes to indemnify another or pay or provide a specified or determinable amount of benefit based on determinable contingencies unless done through a licensed insurer or an employee welfare benefit program plan as defined in 29 U.S.C. 1002(1);

(b)  solicits, negotiates, effects, procures, delivers, renews, continues, or binds an insurance policy unless done through a licensed insurance producer; or

(c)  is exempt under 33-17-103(4).

(12)  A sole proprietor or a working member of a partnership working under a professional employer arrangement may not receive unemployment insurance benefits unless the individual would otherwise be entitled to benefits if the professional employer arrangement did not exist.

(13) If the professional employer organization or group or the client complies with the provisions of 39-71-401 with respect to a worker under the professional employer arrangement, the professional employer organization or group and the client, with respect to those workers, are not uninsured employers, as defined in 39-71-501, and are not subject to the provisions of 39-71-508 or 39-71-515."

Section 162.  Section 39-29-101, MCA, is amended to read:

"39-29-101.   Definitions. For the purposes of this chapter, the following definitions apply:

(1)  "Active duty" means full-time duty with military pay and allowances in the armed forces, except for training, determining physical fitness, or service in the reserve or national guard.

(2)  "Armed forces" means the United States:

(a)  army, navy, air force, marine corps, and coast guard; and

(b)  merchant marine for service recognized by the United States department of defense as active military service for the purpose of laws administered by the department of veterans affairs.

(3)  "Disabled veteran" means a person:

(a)  whether or not the person is a veteran as defined in this section, who was separated under honorable conditions from active duty in the armed forces and has established the present existence of a service-connected disability or is receiving compensation, disability retirement benefits, or pension because of a law administered by the department of veterans affairs or a military department; or

(b)  who has received a purple heart medal.

(4)  "Eligible relative" means:

(a)  the unmarried surviving spouse of a veteran or disabled veteran;

(b)  the spouse of a disabled veteran who is unable to qualify for appointment to a position;

(c)  the mother of a veteran who died under honorable conditions while serving in the armed forces if:

(i)  the mother's spouse is totally and permanently disabled; or

(ii) the mother is the widow of the father of the veteran and has not remarried;

(d)  the mother of a service-connected permanently and totally disabled veteran if:

(i)  the mother's spouse is totally and permanently disabled; or

(ii) the mother is the widow of the father of the veteran and has not remarried.

(5)  "Position" means a permanent, temporary, or seasonal position as defined in 2-18-101 for a state position or a similar permanent, temporary, or seasonal position with a public employer other than the state. The term does not include:

(a)  a state or local elected office;

(b)  appointment by an elected official to a body such as a board, commission, committee, or council;

(c)  appointment by an elected official to a public office if the appointment is provided for by law;

(d)  a department head appointment by the governor or an executive department head appointment by a mayor, city manager, county commissioner, or other chief administrative or executive officer of a local government; or

(e)  engagement as an independent contractor or employment by an independent contractor.

(6)  "Public employer" means:

(a)  a department, office, board, bureau, commission, agency, or other instrumentality of the executive, legislative, or judicial branches of the government of this state;

(b)  a unit of the Montana university system;

(c)  a school district or community college; and

(d)  a county, city, or town.

(7)  "Scored procedure" means a written test, structured oral interview, performance test, or other selection procedure or a combination of these procedures that results in a numerical score to which percentage points may be added.

(8)  "Under honorable conditions" means a discharge or separation from active duty characterized by the armed forces as under honorable conditions. The term includes honorable discharges and general discharges but does not include dishonorable discharges or other administrative discharges characterized as other than honorable.

(9)  "Veteran" means a person who:

(a)  was separated under honorable conditions from active duty in the armed forces after having served more than 180 consecutive days, other than for training; or

(b)  as a member of a reserve component under an order of active duty pursuant to 10 U.S.C. 672(a), (d), or (g) 12301(a), (d), or (g), 10 U.S.C. 673 12302, or 10 U.S.C. 673b 12304 served on active duty during a period of war or in a campaign or expedition for which a campaign badge is authorized and was discharged or released from duty under honorable conditions."

Section 163.  Section 39-51-307, MCA, is amended to read:

"39-51-307.   Department to create employment service. (1) The department shall establish and maintain free public employment offices in such the number and in such places as that may be necessary for the proper administration of this chapter and for the purpose of performing such the duties as that are within the purview of the act of congress entitled, "An act to provide for the establishment of a national employment system and for cooperation with the states in the promotion of such system, and for other purposes", approved June 6, 1933 (48 Stat. 113; U.S.C. Title 29, Sec. 49 (c)) (29 U.S.C. 49), as amended.

(2)  The department shall be is charged with the duty to cooperate with any official or agency of the United States having power or duties under the provisions of the act of congress, as amended, and to do and perform all things necessary to secure to this state the benefits of the act of congress, as amended, in the promotion and maintenance of a system of public employment offices.

(3)  The provisions of the act of congress, as amended, are hereby accepted by this state in conformity with section 4 of said that act, and this state will shall observe and comply with the requirements thereof of the act. The department is hereby designated and constituted the agency of this state for the purpose of said the act.

(4)  For the purpose of establishing and maintaining free public employment offices, the department is authorized to enter into agreements with any political subdivisions of this state or with any private, nonprofit organization, and as a part of any such an agreement, the department may accept money, services, or quarters as a contribution to the employment service account."

Section 164.  Section 39-51-401, MCA, is amended to read:

"39-51-401.   Unemployment insurance fund -- establishment and control. There is hereby established separate and apart from all public money or funds of this state a fund in the expendable trust fund type known as the unemployment insurance fund, which shall must be administered by the department exclusively for the purposes of this chapter. Any reference to the unemployment insurance fund in this code means the unemployment insurance expendable trust fund. All money in the fund shall must be mingled and undivided. This fund shall consist consists of:

(1)  all contributions collected under this chapter and payments made in lieu of contributions as provided in 39-51-1124 through 39-51-1126;

(2)  interest earned upon any money in the fund;

(3)  any property or securities acquired through the use of money belonging to the fund;

(4)  all earnings of such property or securities; and

(5)  all money credited to this state's account in the unemployment trust fund pursuant to section sections 903 and 904 of the Social Security Act (42 U.S.C. 1103 and 1104), as amended."

Section 165.  Section 39-51-402, MCA, is amended to read:

"39-51-402.   Unemployment insurance fund -- custodian -- accounts and deposits. (1) The commissioner of labor and industry is the ex officio treasurer and custodian of the unemployment insurance fund and shall administer such that fund in accordance with this chapter. He The commissioner shall maintain within the fund three separate accounts:

(a)  a clearing account;

(b)  an unemployment trust fund account; and

(c)  a benefit account.

(2)  All money payable to the unemployment insurance fund, upon receipt by the department, must be immediately deposited in the clearing account. Refunds payable pursuant to 39-51-1110 may be paid from the clearing account. After clearance thereof, all other money in the clearing account must be immediately deposited with the secretary of the treasury of the United States to the credit of the account of this state in the unemployment trust fund, established and maintained pursuant to section 904 of the Social Security Act (42 U.S.C. 1104), as amended.

(3)  The benefit account consists of all money requisitioned for the payment of benefits from this state's account in the unemployment trust fund.

(4)  Except as herein otherwise provided, money in the clearing and benefit accounts may be deposited in any bank or public depository in which general funds of the state may be deposited, but no a public deposit insurance charge or premium may not be paid out of the unemployment insurance fund."

Section 166.  Section 39-51-403, MCA, is amended to read:

"39-51-403.   Money to be requisitioned from unemployment trust fund solely for payment of benefits -- exception. (1) Money shall must be requisitioned from this state's account in the unemployment trust fund solely for the payment of benefits and in accordance with regulations prescribed by the department, except that money credited to this state's account pursuant to section sections 903 and 904 of the Social Security Act (42 U.S.C. 1103 and 1104), as amended, may also be withdrawn for the payment of expenses for the administration of this chapter and of public employment offices, as provided by this chapter.

(2)  The department shall from time to time requisition from the unemployment trust fund such amounts, not exceeding the amounts standing to this state account therein, as it deems considers necessary for the payment of benefits for a reasonable future period. Upon receipt thereof of the money, the treasurer shall deposit such the money in the benefit account and shall issue his warrants for the payment of benefits solely from such the benefit account.

(3)  Expenditures of such money in the benefit account and refunds from the clearing account shall are not be subject to any provisions of law requiring specific appropriations or other formal release by state officers of money in their custody.

(4)  Any balance of money requisitioned from the unemployment trust fund which that remains unclaimed or unpaid in the benefit account after the expiration of the period for which such the sums were requisitioned shall either must be deducted from estimates for and may be utilized used for the payment of benefits during succeeding periods or, in the discretion of the department, shall must be redeposited with the secretary of the treasury of the United States to the credit of this state's account in the unemployment trust fund, as provided in 39-51-402."

Section 167.  Section 39-51-404, MCA, is amended to read:

"39-51-404.   Administrative expenses. (1) Money credited to the account of this state in the unemployment trust fund by the secretary of the treasury of the United States pursuant to section sections 903 and 904 of the Social Security Act (42 U.S.C. 1103 and 1104), as amended, may be requisitioned and used for the payment of expenses incurred for the administration of this chapter pursuant to a specific appropriation by the legislature if the expenses are incurred and the money is requisitioned after the enactment of an appropriation law that:

(a)  specifies the purposes for which the money is appropriated and the amounts appropriated;

(b)  limits the period within which the money may be expended to a period ending not more than 2 years after the date of the enactment of the appropriation law; and

(c)  limits the amount that may be used during any 12-month period beginning on July 1 and ending on the next June 30 to an amount not exceeding the amount by which the aggregate of the amounts credited to the account of this state pursuant to section sections 903 and 904 of the Social Security Act (42 U.S.C. 1103 and 1104), as amended, during the same 12-month period and the 34 preceding 12-month periods exceeds the aggregate of the amounts used pursuant to this section and charged against the amounts credited to the account of this state during any of the 35 12-month periods.

(2)  For the purposes of this section, amounts used during any 12-month period must be charged against equivalent amounts that were first credited and that are not already charged, except that an amount used for administration during any 12-month period may not be charged against any amount credited during a 12-month period earlier than the 34th preceding period. Money requisitioned for the payment of expenses of administration pursuant to this section must be deposited in the unemployment insurance administration account but, until expended, must remain a part of the unemployment insurance fund.

(3)  The department shall maintain a separate record of the deposit, obligation, expenditure, and return of funds deposited. If any money deposited is for any reason not to be expended for the purpose for which it was appropriated or if it remains unexpended at the end of the period specified by the law appropriating the money, it must be withdrawn and returned to the secretary of the treasury of the United States for credit to this state's account in the unemployment trust fund.

(4)  An assessment equal to .1% 0.1% of all taxable wages provided for in 39-51-1108 and .05% 0.05% of total wages paid by employers not covered by an experience rating must be levied against and paid by all employers. All assessments and investment income must be deposited in the employment security account provided for in 39-51-409."

Section 168.  Section 39-51-407, MCA, is amended to read:

"39-51-407.   Reimbursement of fund by state. This state recognizes its obligation to replace, and hereby pledges the faith of this state that funds will be provided in the future and applied to the replacement of any of the money received from the United States or any agency thereof of the United States under Title III of the Social Security Act (now Subchapter III), any unencumbered balances in the unemployment insurance administration account, any money granted to this state pursuant to the provisions of the Wagner-Peyser Act (29 U.S.C. 49, et seq.), and any money made available by the state or its political subdivisions and matched by such money granted to this state pursuant to the provisions of the Wagner-Peyser Act which that the secretary of labor finds have, because of any action or contingency, been lost or have been expended for purposes other than or in amounts in excess of those found necessary by the secretary of labor for the proper administration of this chapter. Such The money shall must be promptly supplied by money furnished by the state of Montana or any of its subdivisions for the use of the department and used only for purposes approved by the secretary of labor. The department shall, if necessary, promptly report to the governor and the governor to the legislature, by a letter to the speaker of the house of representatives and the president of the senate, the amount required for such replacement of the money."

Section 169.  Section 39-51-501, MCA, is amended to read:

"39-51-501.   State-federal cooperation. (1) In the administration of this chapter, the department shall:

(a)  cooperate to the fullest extent consistent with the provisions of this chapter with the secretary of labor, pursuant to the provisions of the Social Security Act, as amended;

(b)  make such reports in such a form and containing such the information as that the secretary of labor may from time to time require and shall comply with such the provisions as that the secretary of labor may from time to time find necessary to assure ensure the correctness and verification of such the reports; and

(c)  comply with the regulations prescribed by the secretary of labor governing the expenditures of such the sums as may be that are allotted and paid to this state under Title III of the Social Security Act (now Subchapter III), as amended, for the purpose of assisting in the administration of this chapter.

(2)  The department shall cooperate with the secretary of labor in the administration of any act of congress establishing unemployment insurance benefits or similar benefits for federal employees and veterans or ex-service personnel of the armed forces of the United States and shall do so in such a manner as may be deemed considered advisable and expedient in order to carry out the purpose of this chapter.

(3)  The department is hereby authorized and empowered to perform any and all acts, including the execution of agreements and contracts which that may be required under and pursuant to any act passed by the congress of the United States, authorizing the extension of unemployment insurance benefits by federal law if the department in its discretion deems considers it advisable to perform such acts.

(4)  Upon request therefor, the department shall furnish to any agency of the United States charged with the administration of public works or assistance through public employment the name, address, ordinary occupation, and employment status of each recipient of benefits and such the recipient's rights to further benefits under this chapter."

Section 170.  Section 39-51-503, MCA, is amended to read:

"39-51-503.   Agreements with railroad retirement board. The department is hereby authorized to cooperate with and enter into agreements with the railroad retirement board with respect to establishment, maintenance, and use of employment service facilities and to make available to the railroad retirement board the records of the department relating to employer's status and contributions received from employers covered by the Railroad Unemployment Insurance Act (45 U.S.C. 351, et seq.), together with employee wage records and such other data as that the railroad retirement board may deem considers necessary or desirable for the administration of the Railroad Unemployment Insurance Act (52 Stat. 1094). Any money received by the department from the railroad retirement board or any other governmental agency with respect to the establishment, maintenance, and use of employment service facilities shall must be paid into and credited to the proper division of the unemployment insurance administration fund set up and established under 39-51-406 and 39-51-407."

Section 171.  Section 39-51-1110, MCA, is amended to read:

"39-51-1110.   Refunds to employers. (1) If not later than 3 years after the date on which any taxes or interest thereon on the taxes became due or not later than 1 year from the date on which payment was made, whichever is later, an employer who has paid such taxes or interest thereon on the taxes shall make application applies for an adjustment thereof of the taxes or interest in connection with subsequent tax payments or applies for a refund thereof of the taxes or interest because such an adjustment cannot be made and if the department shall determine determines that such the taxes or interest or any portion thereof of the taxes or interest was erroneously collected, the department shall allow such the employer to make an adjustment thereof, without interest, in connection with subsequent tax payments by him the taxpayer or, if such. If an adjustment cannot be made, the department shall refund said the amount, without interest, from the fund. For like cause and within the same period, an adjustment or refund may be so made on the department's own initiative.

(2)  If the department shall determine determines that an employer has paid taxes to this state under this chapter when such the taxes should have been paid to another state under a similar act of such the other state, transfer of such the taxes to such the other state shall must be made upon discovery or, upon proof of payment that such the other state has been fully paid, then a refund to such the employer shall must be made at any time upon application without limitation of time.

(3)  In the event that this chapter is not certified by the secretary of labor under section 1603 of the Internal Revenue Code, 26 U.S.C. 3304, as amended, 1939, for any year, then and in that event refunds shall must be made of all taxes required under this chapter from employers for that year."

Section 172.  Section 39-51-1304, MCA, is amended to read:

"39-51-1304.   Lien for payment of unpaid taxes -- levy and execution. (1) Unpaid taxes, including penalties and interest assessed on unpaid taxes, have the effect of a judgment against the employer, or against the liable corporate officer or employee or liable member or manager of a limited liability company referred to in 39-51-1105, arising at the time that the payments are due. The department may issue a certificate stating the amount of payments due and directing the clerk of the district court of any county of the state to enter the certificate as a judgment in the docket pursuant to 25-9-301. From the time that the judgment is docketed, it becomes a lien upon all real and personal property of the employer. After the due process requirements of 39-51-1109 and 39-51-2403 have been satisfied, the department may enforce the judgment through the sheriff or agent authorized to collect the tax in the same manner as prescribed for execution upon a judgment. A notice of levy may be made by means of a certified letter by an agent authorized to collect the tax. The department may enforce the judgment at any time within 10 years of the creation of the lien or the effective date of the lien, whichever is later.

(2)  A judgment lien filed pursuant to this section may be renewed for another 10-year period pursuant to the provisions of methods provided in 25-13-102.

(3)  The lien provided for in subsection (1) is not valid against any third party owning an interest in real or personal property against which the judgment is enforced if:

(a)  the third party's interest is recorded prior to the entrance of the certificate as a judgment; and

(b)  the third party receives from the most recent grantor of the interest a signed affidavit stating that all taxes, penalties, and interest due from the grantor have been paid.

(4)  A grantor who signs and delivers an affidavit is subject to the penalties imposed by 39-51-3204 if any part of it is untrue. Notwithstanding the provisions of 39-51-3204, the department may proceed against the employer, liable corporate officer or employee, or liable member or manager of a limited liability company referred to in 39-51-1105 under 39-51-1303 or this section, or both, to collect the delinquent taxes, penalties, and interest.

(5)  The lien provided for in subsection (1) must be released upon payment in full of the unpaid taxes, penalties, and accumulated interest. The department may release or may partially release the lien upon partial payment or whenever the department determines that the release or partial release of the lien will facilitate the collection of unpaid taxes, penalties, or interest. The department may release the lien if it determines that the lien is unenforceable."

Section 173.  Section 39-51-2106, MCA, is amended to read:

"39-51-2106.   Certain wages not to be used in determining benefit eligibility or amount. Wages earned for services performed as an employee representative as defined in the Railroad Unemployment Insurance Act (52 Stat. 1094) (45 U.S.C. 351, et seq.) or for services performed for an employer as defined in said that act shall are not be included for the purposes of determining eligibility or weekly benefit amount under this chapter."

Section 174.  Section 39-51-2110, MCA, is amended to read:

"39-51-2110.   Payment of benefits to aliens. (1) Benefits may not be paid on the basis of services performed by an alien unless the alien is an individual who was lawfully admitted for permanent residence at the time the services were performed, was lawfully present for the purposes of performing the services, or was permanently residing in the United States under color of law at the time the services were performed, including an alien who was lawfully present in the United States as a result of the application of the provisions of section 212(d)(5) of the Immigration and Nationality Act, 8 U.S.C. 1152.

(2)  Any data or information required of individuals applying for benefits to determine whether benefits are not payable to the individuals because of the individuals' alien status must be uniformly required from all applicants for benefits.

(3)  In the case of an individual whose application for benefits would otherwise be approved, a determination that benefits to the individual are not payable because of the individual's alien status may not be made except upon a preponderance of the evidence."

Section 175.  Section 39-51-2508, MCA, is amended to read:

"39-51-2508.   Eligibility requirements for extended benefits -- disqualifications -- acceptance of suitable work. (1) An individual is eligible to receive extended benefits with respect to any week of unemployment in this eligibility period only if the department finds with respect to the week that the individual:

(a)  is an exhaustee, as defined in 39-51-2501;

(b)  has been paid total wages for employment in the base period, as defined in 39-51-201, in an amount not less than:

(i)  1.5 times the wages earned in the calendar quarter in which wages were the highest during the base period;

(ii) 40 times the individual's most recent weekly benefit amount; or

(iii) insured wages for 20 weeks of work;

(c)  is not disqualified for the receipt of regular benefits pursuant to part 23 of this chapter and, if disqualified, the individual satisfies the requirements for requalification in that part; and

(d)  has satisfied the other requirements of this chapter for the receipt of regular benefits that are applicable to individuals claiming extended benefits.

(2)  In addition to the disqualifications provided for in subsection (1)(c), an individual is disqualified for extended benefits if the individual fails to seek work. The disqualification continues for the week in which the failure occurs and until the individual has performed services, other than self-employment, for which remuneration is received equal to or in excess of the individual's weekly benefit amount in 4 separate weeks subsequent to the date the act causing the disqualification occurred.

(3)  A regular benefit claimant who is disqualified for gross misconduct under 39-51-2303(2) may not be paid extended benefits unless the individual has earned at least eight times the weekly benefit amount after the date of the disqualification.

(4)  A regular benefit claimant who voluntarily leaves work to attend school and, pursuant to 39-51-2302(3), requalifies for regular benefits may not be paid extended benefits unless the individual has earned at least six times the weekly benefit amount.

(5)  For the purposes of determining eligibility for extended benefits, the department shall by rule define the term "suitable work". The definition must be in accordance with the definition required by the Omnibus Reconciliation Act of 1980, Public Law 96-499, and as may be amended after March 19, 1981 requirements of 26 U.S.C. 3304."

Section 176.  Section 39-51-2602, MCA, is amended to read:

"39-51-2602.   Approved training under federal programs. (1) Notwithstanding any other provisions of this chapter, no an otherwise eligible individual may not be denied benefits for any week:

(a)  because of participation in training approved under Section 236(a)(1) of the federal Trade Act of 1974 (19 U.S.C. 2296) or under Title III of the federal Job Training Partnership Act (29 U.S.C. 1501, et seq.);

(b)  because of participation in approved training described in subsection (1)(a) by reason of leaving work to enter the training if the work left is not suitable employment; or

(c)  because of the application to any such week in training of provisions in this chapter or any federal unemployment insurance law administered by this agency, relating to availability for work, active search for work, or refusal to accept work.

(2)  For purposes of this section, "suitable employment" means work of a substantially equal or higher skill level than the individual's past adversely affected employment, as defined for purposes of the federal Trade Act of 1974 and the federal Job Training Partnership Act, and for which the wages are not less than 80% of the individual's average weekly wage as determined for the purposes of the federal Trade Act of 1974 and the federal Job Training Partnership Act."

Section 177.  Section 39-51-3106, MCA, is amended to read:

"39-51-3106.   Child support interception of unemployment benefits. (1) For purposes of this section, the following definitions apply:

(a)  "Child support obligations" includes only obligations that are being enforced pursuant to a plan described in section 454 of the Social Security Act which (42 U.S.C. 654) that has been approved by the secretary of health and human services under Part D of Title IV of the Social Security Act (now Subchapter IV).

(b)  "State or local child support enforcement agency" means any agency of a state or political subdivision thereof operating pursuant to a plan provided for in subsection (1)(a).

(c)  "Unemployment benefits" means any benefits payable under the Montana unemployment insurance law, including amounts payable by the department pursuant to an agreement under any federal law providing for benefits, assistance, or allowances with respect to unemployment.

(2)  An individual filing a new claim for unemployment benefits shall, at the time of filing the claim, disclose whether or not he the individual owes child support obligations. If an individual discloses that he the individual owes child support obligations and the individual is determined to be eligible for unemployment benefits, the department shall notify the state or local child support enforcement agency enforcing such the obligation that the individual has been determined to be eligible for unemployment benefits.

(3)  The department shall deduct and withhold from any unemployment benefits payable to an individual owing child support obligations:

(a)  the amount specified by the individual to the department to be deducted and withheld under this subsection if neither subsection (3)(b) nor (3)(c) is applicable;

(b)  the amount, if any, determined pursuant to an agreement submitted to the department under section 454(20)(B)(i) 454(19)(B)(i) of the Social Security Act (42 U.S.C. 654(19)(B)(i)) by the state or local child support enforcement agency, unless subsection (3)(c) is applicable; or

(c)  any amount otherwise required to be so deducted and withheld from such unemployment benefits pursuant to legal process, as that term is defined in section 462(e) of the Social Security Act (42 U.S.C. 662(e)), properly served upon the department.

(4)  The department shall pay any amount deducted and withheld under subsection (3) to the appropriate state or local child support enforcement agency.

(5)  Deductions may be made pursuant to this section only if appropriate arrangements have been made for reimbursement by the state or local child support enforcement agency for the administrative costs incurred by the department under this section.

(6)  Any amount deducted and withheld under subsection (3) must be treated as if it were paid to the individual as unemployment benefits and paid by such the individual to the state or local child support enforcement agency in satisfaction of the individual's child support obligations."

Section 178.  Section 39-71-431, MCA, is amended to read:

"39-71-431.   Assigned risk plan. (1) Following the date on which the provisions of 39-71-2311 through 39-71-2320 and 39-71-2337 are implemented but no later than December 31, 1990, the The commissioner of the department of labor and industry may order the establishment of establish and administer a plan to equitably apportion among the state fund, plan No. 3, and private insurers, plan No. 2, the coverage required by this chapter for employers who are unable to procure coverage through ordinary methods. In determining whether to order establish an assigned risk plan to be established, the commissioner shall consider the effect a plan would have on the availability of workers' compensation insurance and the need to provide competitive workers' compensation premium rates for employers in this state. If the commissioner orders the establishment of an assigned risk plan, it may not take effect until at least 6 months following the commissioner's order creating the plan.

(2)  All plan No. 2 insurers and the state fund shall subscribe to and participate in the assigned risk plan.

(3)  If an insurer refuses to accept its equitable apportionment under the assigned risk plan, the commissioner of insurance may suspend or revoke the insurer's authority to issue workers' compensation insurance policies in this state.

(4)  If an assigned risk plan is established and in effect, the state fund, plan No. 3, is not required to insure any employer in this state requesting coverage, and it may refuse coverage for an employer, except for a state agency.

(5)  If an assigned risk plan is established and in effect, an employer who is refused the coverage required by this chapter by the state fund, plan No. 3, and by at least two private insurers, plan No. 2, may be assigned coverage by the commissioner under the assigned risk plan pursuant to the procedure established by the commissioner for the equitable apportionment of coverage."

Section 179.  Section 39-71-501, MCA, is amended to read:

"39-71-501.   Definition of uninsured employer. For the purposes of 39-71-501 through 39-71-511 and 39-71-515 through 39-71-519 39-71-520, "uninsured employer" means an employer who has not properly complied with the provisions of 39-71-401."

Section 180.  Section 39-71-517, MCA, is amended to read:

"39-71-517.   Requirement to serve papers. In pursuing remedies under 39-71-501 through 39-71-511 and 39-71-515 through 39-71-519 39-71-520, an injured employee or his the employee's beneficiaries shall serve all pleadings and all other litigation papers on the department and the uninsured employer, regardless of whether the department or the uninsured employer is a party to the particular action to which the papers relate."

Section 181.  Section 39-71-519, MCA, is amended to read:

"39-71-519.   Settlement. The department, the uninsured employer, the injured employee or his the employee's beneficiaries, a third party who shares liability as defined in 39-71-412, or a fellow employee who shares liability as defined in 39-71-413 may enter into a settlement agreement to finally settle the rights and liabilities under 39-71-501 through 39-71-511 and 39-71-515 through 39-71-519 39-71-520 of any or all of the parties. Such a The settlement is subject to department approval in accordance with 39-71-741."

Section 182.  Section 39-71-703, MCA, is amended to read:

"39-71-703.   Compensation for permanent partial disability. (1) If an injured worker suffers a permanent partial disability and is no longer entitled to temporary total or permanent total disability benefits, the worker is entitled to a permanent partial disability award if that worker:

(a)  has an actual wage loss as a result of the injury; and

(b)  has a permanent impairment rating that:

(i)  is established by objective medical findings; and

(ii) is more than zero as determined by the latest edition of the American medical association Guides to the Evaluation of Permanent Impairment.

(2)  When a worker receives an impairment rating as the result of a compensable injury and has no actual wage loss as a result of the injury, the worker is eligible for an impairment award only.

(3)  The permanent partial disability award must be arrived at by multiplying the percentage arrived at through the calculation provided in subsection (4) (5) by 350 weeks.

(4)  A permanent partial disability award granted an injured worker may not exceed a permanent partial disability rating of 100%.

(5)  The percentage to be used in subsection (3) must be determined by adding all of the following applicable percentages to the impairment rating:

(a)  if the claimant is 40 years of age or younger at the time of injury, 0%; if the claimant is over 40 years of age at the time of injury, 1%;

(b)  for a worker who has completed less than 12 years of education, 1%; for a worker who has completed 12 years or more of education or who has received a graduate equivalency diploma, 0%;

(c)  if a worker has no actual wage loss as a result of the industrial injury, 0%; if a worker has an actual wage loss of $2 or less an hour as a result of the industrial injury, 10%; if a worker has an actual wage loss of more than $2 an hour as a result of the industrial injury, 20%. Wage loss benefits must be based on the difference between the actual wages received at the time of injury and the wages that the worker earns or is qualified to earn after the worker reaches maximum healing.

(d)  if a worker, at the time of the injury, was performing heavy labor activity and after the injury the worker can perform only light or sedentary labor activity, 5%; if a worker, at the time of injury, was performing heavy labor activity and after the injury the worker can perform only medium labor activity, 3%; if a worker was performing medium labor activity at the time of the injury and after the injury the worker can perform only light or sedentary labor activity, 2%.

(6)  The weekly benefit rate for permanent partial disability is 66 2/3% of the wages received at the time of injury, but the rate may not exceed one-half the state's average weekly wage. The weekly benefit amount established for an injured worker may not be changed by a subsequent adjustment in the state's average weekly wage for future fiscal years.

(7)  If a worker suffers a subsequent compensable injury or injuries to the same part of the body, the award payable for the subsequent injury may not duplicate any amounts paid for the previous injury or injuries.

(8)  If a worker is eligible for a rehabilitation plan, permanent partial disability benefits payable under this section must be calculated based on the wages that the worker earns or would be qualified to earn following the completion of the rehabilitation plan.

(9)  As used in this section:

(a)  "heavy labor activity" means the ability to lift over 50 pounds occasionally or up to 50 pounds frequently;

(b)  "medium labor activity" means the ability to lift up to 50 pounds occasionally or up to 25 pounds frequently;

(c)  "light labor activity" means the ability to lift up to 25 pounds occasionally or up to 10 pounds frequently; and

(d)  "sedentary labor activity" means the ability to lift up to 10 pounds occasionally or up to 5 pounds frequently."

Section 183.  Section 40-5-161, MCA, is amended to read:

"40-5-161.   Duties of initiating tribunal. (1) Upon the filing of a petition authorized by this part, an initiating tribunal shall forward three copies of the petition and its accompanying documents:

(a)  to the responding tribunal or appropriate support enforcement agency in the responding state; or

(b)  if the identity of the responding tribunal is unknown, to the state information agency of the responding state, with a request that they be forwarded to the appropriate tribunal and that receipt be acknowledged.

(2)  The department of public health and human services is the initiating tribunal for any action or proceeding that may be brought under Title 40, chapter 5, parts 2, 4, and 5 6. In all other cases, the district court is the initiating tribunal."

Section 184.  Section 40-5-164, MCA, is amended to read:

"40-5-164.   Duties of support enforcement agency. (1) A support enforcement agency of this state, upon application, shall provide services to a petitioner in a proceeding under this part.

(2)  A support enforcement agency that is providing services to the petitioner shall, as appropriate:

(a)  take all steps necessary to enable an appropriate tribunal in this state or another state to obtain jurisdiction over the respondent;

(b)  request an appropriate tribunal to set a date, time, and place for a hearing;

(c)  make a reasonable effort to obtain all relevant information, including information as to income and property of the parties;

(d)  after receipt of a written notice from an initiating, responding, or registering tribunal, promptly send a copy of the notice by first-class mail to the petitioner;

(e)  after receipt of a written communication from the respondent or the respondent's attorney, promptly send a copy of the communication by first-class mail to the petitioner; and

(f)  notify the petitioner if jurisdiction over the respondent cannot be obtained.

(3)  This part does not create or negate a relationship of attorney and client or other fiduciary relationship between a support enforcement agency or the attorney for the agency and the individual being assisted by the agency.

(4)  For purposes of this part, the department of public health and human services is the support enforcement agency for this state as provided in Title 40, chapter 5, parts 2, 4, and 5 6. All the provisions of this part must be interpreted as supplemental to and cumulative with the department's powers and duties under those provisions. In all other cases, the county attorney in the county in which an action must be filed is the support enforcement agency."

Section 185.  Section 40-5-201, MCA, is amended to read:

"40-5-201.   Definitions. As used in this part, the following definitions apply:

(1)  "Alleged father" means a person who is alleged to have engaged in sexual intercourse with a child's mother during a possible time of conception of the child or a person who is presumed to be a child's father under the provisions of 40-6-105.

(2)  (a) "Child" means any person under 18 years of age who is not otherwise emancipated, self-supporting, married, or a member of the armed forces of the United States;, any person under 19 years of age and still in high school;, or any person who is mentally or physically incapacitated if the incapacity began prior to the person's 18th birthday and for whom:

(i)  support rights are assigned under 53-2-613;

(ii) a public assistance payment has been made;

(iii) the department is providing support enforcement services under 40-5-203; or

(iv) the department has received a referral for interstate services from an agency of another state under the provisions of the Uniform Reciprocal Enforcement of Support Act, the Revised Uniform Reciprocal Enforcement of Support Act, or the Uniform Interstate Family Support Act or under Title IV-D of the Social Security Act.

(b)  The term may not be construed to limit the ability of the department to enforce a support order according to its terms when the order provides for support to extend beyond the child's 18th birthday.

(3)  "Department" means the department of public health and human services.

(4)  "Director" means the director of the department of public health and human services or the director's authorized representative.

(5)  "Guidelines" means the child support guidelines adopted pursuant to 40-5-209.

(6)  "Hearings officer" or "hearing hearings examiner" means the hearings officer appointed by the department for the purposes of this chapter.

(7)  "Need" means the necessary costs of food, clothing, shelter, and medical care for the support of a child or children.

(8)  "Obligee" means:

(a)  a person to whom a duty of support is owed and who is receiving support enforcement services under this part; or

(b)  a public agency of this or another state having the right to receive current or accrued support payments.

(9)  "Obligor" means a person, including an alleged father, who owes a duty of support.

(10) "Parent" means the natural or adoptive parent of a child.

(11) "Paternity blood test" means a test that demonstrates through examination of genetic markers either that an alleged father is not the natural father of a child or that there is a probability that an alleged father is the natural father of a child. Paternity blood tests may include but are not limited to the human leukocyte antigen test and DNA probe technology.

(12) "Public assistance" means any type of monetary or other assistance for a child, including medical and foster care benefits. The term includes payments to meet the needs of a relative with whom the child is living, if assistance has been furnished with respect to the child by a state or county agency of this state or any other state.

(13) "Support debt" or "support obligation" means the amount created by:

(a)  the failure to provide for the medical, health, and support needs of a child under the laws of this or any other state or under a support order; or

(b)  a support order for spousal maintenance if the judgment or order requiring payment of maintenance also contains a judgment or order requiring payment of child support for a child of whom the person awarded maintenance is the custodial parent.

(14) "Support order" means an order, whether temporary or final, that:

(a)  provides for the payment of a specific amount of money, expressed in periodic increments or as a lump-sum amount, for the support of the child, including an amount expressed in dollars for medical and health needs, child care, education, recreation, clothing, transportation, and other related expenses and costs specific to the needs of the child; and

(b) is issued by:

(i)  a district court of this state;

(ii) a court of appropriate jurisdiction of another state, Indian tribe, or foreign country;

(iii) an administrative agency pursuant to proceedings under this part; or

(iv) an administrative agency of another state, Indian tribe, or foreign country with a hearing function and process similar to those of the department under this part.

(15) "IV-D" means the provisions of Title IV-D of the Social Security Act and the regulations promulgated under the act."

Section 186.  Section 40-5-701, MCA, is amended to read:

"40-5-701.   Definitions. As used in this part, the following definitions apply:

(1)  (a) "Child" means:

(i)  a person under 18 years of age who is not emancipated, self-supporting, married, or a member of the armed forces of the United States;

(ii) a person under 19 years of age who is still in high school;

(iii) a person who is mentally or physically incapacitated when the incapacity began prior to that person reaching 18 years of age; and

(iv) in IV-D cases, a person for whom:

(A)  support rights are assigned under 53-2-613;

(B)  a public assistance payment has been made;

(C)  the department is providing support enforcement services under 40-5-203; or

(D)  the department has received a referral for interstate services from an agency of another state under the provisions of the Uniform Reciprocal Enforcement of Support Act, the Revised Uniform Reciprocal Enforcement of Support Act, or the Uniform Interstate Family Support Act or under Title IV-D of the Social Security Act.

(b)  The term may not be construed to limit the ability of the department to enforce a support order according to its terms when the order provides for support extending beyond the time the child reaches 18 years of age.

(2)  "Delinquency" means a support debt or support obligation due under a support order in an amount greater than or equal to 6 months' support payments as of the date of service of a notice of intent to suspend a license.

(3)  "Department" means the department of public health and human services.

(4)  "IV-D case" means a case in which the department is providing support enforcement services as a result of:

(a)  an assignment of support rights under 53-2-613;

(b)  a payment of public assistance;

(c)  an application for support enforcement services under 40-5-203; or

(d)  a referral for interstate services from an agency of another state under the provisions of the Uniform Reciprocal Enforcement of Support Act, the Revised Uniform Reciprocal Enforcement of Support Act, or the Uniform Interstate Family Support Act or under Title IV-D of the Social Security Act.

(5)  "License" means a license, certificate, registration, or authorization issued by an agency of the state of Montana granting a person a right or privilege to engage in a business, occupation, or profession or any other privilege that is subject to suspension, revocation, forfeiture, or termination by the licensing authority prior to its date of expiration.

(6)  "Licensing authority" means any department, division, board, agency, or instrumentality of this state that issues a license.

(7)  "Obligee" means:

(a)  a person to whom a support debt or support obligation is owed; or

(b)  a public agency of this or another state that has the right to receive current or accrued support payments or that is providing support enforcement services under this chapter.

(8)  "Obligor" means a person who owes a duty of support.

(9)  "Order suspending a license" means an order issued by a support enforcement entity to suspend a license. The order must contain the name of the obligor, the type of license, and, if known, the social security number of the obligor.

(10) "Payment plan" includes but is not limited to a plan approved by the support enforcement entity that provides sufficient security to ensure compliance with a support order and that incorporates voluntary or involuntary income withholding under part 3 or 4 of this chapter or a similar plan for periodic payment of a support debt and, if applicable, current and future support.

(11) "Support debt" or "support obligation" means the amount created by:

(a)  the failure to provide support to a child under the laws of this or any other state or a support order; or

(b)  a support order for spousal maintenance if the judgment or order requiring payment of maintenance also contains a judgment or order requiring payment of child support for a child for whom the person awarded maintenance is the custodial parent.

(12) "Support enforcement entity" means:

(a)  in IV-D cases, the department; or

(b)  in all other cases, the district court that entered the support order or a district court in which the support order is registered.

(13) "Support order" means an order that provides a determinable amount for temporary or final periodic payment of a support debt or support obligation and that may include payment of a determinable or indeterminable amount for insurance covering the child issued by:

(a)  a district court of this state;

(b)  a court of appropriate jurisdiction of another state, an Indian tribe, or a foreign country;

(c)  an administrative agency pursuant to proceedings under Title 40, chapter 5, part 2; or

(d)  an administrative agency of another state with a hearing function and process similar to those of the department."

Section 187.  Section 40-5-821, MCA, is amended to read:

"40-5-821.   Penalty imposed by tribunal. (1) In addition to any other penalty provided by this part or other law, a tribunal, after a hearing, may impose a civil penalty not to exceed $25 for each day that a parent, health benefit plan, employer, union, or other payor is found to have knowingly violated a medical support order or a provision of or a rule adopted under this part.

(2)  The civil penalty must be deposited as provided in 40-5-813.

(3)  Imposition of a civil penalty under this section may be appealed if the tribunal is a court or may be reviewed under Title 2, chapter 4, part 7, if the tribunal is the department."

Section 188.  Section 41-1-402, MCA, is amended to read:

"41-1-402.   Validity of consent of minor for health services. (1) The consent to the provision of medical or surgical care or services by a hospital or public clinic or to the performance of medical or surgical care or services by a physician licensed to practice medicine in this state may be given by a minor who professes or is found to meet any of the following descriptions:

(a)  a minor who is or was ever married or has had a child or graduated from high school or is emancipated;

(b)  a minor who has been separated from his the minor's parent, parents, or legal guardian for whatever reason and is supporting himself providing self-support by whatever means;

(c)  a minor who professes or is found to be pregnant or afflicted with any reportable communicable disease, including a sexually transmitted disease, or drug and substance abuse, including alcohol. This self-consent only applies only to the prevention, diagnosis, and treatment of those conditions specified in this subsection. The self-consent in the case of pregnancy, a sexually transmitted disease, and or drug and substance abuse also obliges the health professional, if he the health professional accepts the responsibility for treatment, to counsel the minor by himself or by referral to refer the minor to another health professional for counseling.

(d)  a minor who needs emergency care, including transfusions, without which his the minor's health will be jeopardized. If emergency care is rendered, the parent, parents, or legal guardian shall must be informed as soon as practical except under the circumstances mentioned in this subsection (1).

(2)  A minor who has had a child may give effective consent to health service for his the child.

(3)  A minor may give consent for health care for his the minor's spouse if his the spouse is unable to give consent by reason of physical or mental incapacity."

Section 189.  Section 41-3-204, MCA, is amended to read:

"41-3-204.   Admissibility and preservation of evidence. (1) In any proceeding resulting from a report made pursuant to the provisions of this chapter or in any proceeding for which the report or its contents are sought to be introduced into evidence, the report or its contents or any other fact related to the report or to the condition of the child who is the subject of the report may not be excluded on the ground that the matter is or may be the subject of a privilege related to the examination or treatment of the child and granted in Title 26, chapter 1, part 8, except the attorney-client privilege granted by 26-1-803.

(2)  Any A person or official required to report under 41-3-201 may take or cause to be taken photographs of the area of trauma visible on a child who is the subject of a report. The cost of photographs taken under this section must be paid by the department.

(3)  When any a person required to report under 41-3-201 finds visible evidence that a child has suffered abuse or neglect, the person shall include in the report either a written description or photographs of the evidence.

(4)  A physician, either in the course of providing medical care to a minor or after consultation with child protective services, the county attorney, or a law enforcement officer, may require x-rays to be taken when, in the physician's professional opinion, there is a need for radiological evidence of suspected abuse or neglect. X-rays may be taken under this section without the permission of the parent or guardian. The cost of the x-rays ordered and taken under this section must be paid by the county child protective service agency.

(5)  All written, photographic, or radiological evidence gathered under this section must be sent to the local affiliate of the department at the time that the written confirmation report is sent or as soon after the report is sent as is possible. If a confirmation report is not made, the evidence and the initial report must be destroyed as provided in 4