1999 Montana Legislature

UNAPPROVED DRAFT BILL -- Subject to Change Without Notice!

About Bill -- Links

BILL NO.

INTRODUCED BY

(Primary Sponsor)

A BILL FOR AN ACT ENTITLED: "AN ACT CHANGING THE TERM "INDEPENDENT CONTRACTOR" TO "INDEPENDENTLY CONTRACTED WORKER" THROUGHOUT THE MONTANA CODE ANNOTATED FOR THE PURPOSE OF MITIGATING CONFUSION AND MISUNDERSTANDING; AND AMENDING SECTIONS 2-9-101, 2-18-111, 2-18-601, 7-33-2107, 15-1-211, 15-30-201, 15-30-202, 15-30-256, 15-30-303, 19-3-403, 19-50-101, 30-3-420, 33-2-1392, 33-2-1394, 33-11-102, 33-17-102, 33-22-1514, 33-22-1803, 33-35-203, 35-1-1026, 35-2-820, 35-8-1001, 35-10-202, 37-47-304, 37-51-102, 37-51-313, 37-51-315, 39-2-206, 39-2-903, 39-8-102, 39-9-206, 39-9-211, 39-29-101, 39-30-103, 39-51-201, 39-51-203, 39-51-204, 39-51-310, 39-51-604, 39-71-117, 39-71-118, 39-71-120, 39-71-401, 39-71-405, 39-71-415, 39-71-2507, 39-72-102, 41-2-103, 42-3-202, 50-72-102, 72-2-1005, 81-23-101, 82-1-101, AND 90-15-302, MCA."

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

     NEW SECTION.  Section 1.  Purpose. (1) The legislature finds that the different uses and generally understood meanings of the term "independent contractor", as distinct from statutory definitions and judicial interpretation of this term, are a cause for confusion and misunderstanding and that the replacement of "independent contractor" with "independently contracted worker" would mitigate this problem.

     (2) In adopting the term "independently contracted worker", it is not the intent of the legislature to change the interpretation of "independent contractor" in Montana case law. Rather, the legislature intends that all prior decisions in which the term "independent contractor" is used will be applied in future decisions in which the term "independently contracted worker" is used.

     Section 2.  Section 2-9-101, MCA, is amended to read:

     "2-9-101.  Definitions. As used in parts 1 through 3 of this chapter, the following definitions apply:

     (1)  "Claim" means any a claim against a governmental entity, for money damages only, which any that a person is legally entitled to recover as damages because of personal injury or property damage caused by a negligent or wrongful act or omission committed by any employee of the governmental entity while acting within the scope of his employment, under circumstances where the governmental entity, if a private person, would be liable to the claimant for such damages under the laws of the state. For purposes of this section and the limit of liability contained in 2-9-108, all claims which that arise or derive from personal injury to or death of a single person, or damage to property of a person, regardless of the number of persons or entities claiming damages thereby, are considered one claim.

     (2)  (a) "Employee" means an officer, employee, or servant of a governmental entity, including elected or appointed officials, and persons acting on behalf of the governmental entity in any official capacity temporarily or permanently in the service of the governmental entity whether with or without compensation, but the.

     (b) The term employee shall does not mean a person or other legal entity while acting in the capacity of an independent contractor independently contracted worker under contract to the governmental entity to which parts 1 through 3 apply in the event of a claim.

     (3)  "Governmental entity" means and includes the state and political subdivisions as herein defined.

     (4)  "Personal injury" means any injury resulting from libel, slander, malicious prosecution, or false arrest, any bodily injury, sickness, disease, or death sustained by any person and caused by an occurrence for which the state may be held liable.

     (5)  "Political subdivision" means any county, city, municipal corporation, school district, special improvement or taxing district, or any other political subdivision or public corporation.

     (6)  "Property damage" means injury or destruction to tangible property, including loss of use thereof of the property, caused by an occurrence for which the state may be held liable.

     (7)  "State" means the state of Montana or any office, department, agency, authority, commission, board, institution, hospital, college, university, or other instrumentality thereof of the state."

     Section 3.  Section 2-18-111, MCA, is amended to read:

     "2-18-111.  Hiring preference for residents of Indian reservations for state jobs within reservation -- rules. (1) A state agency that operates within an Indian reservation shall give a preference in hiring for employment with the state agency to an Indian resident of the reservation who has substantially equal qualifications for the position.

     (2)  The commissioner of labor and industry shall enforce this section and investigate complaints of its violation and may adopt rules to implement this section.

     (3)  For the purposes of this section, the following definitions apply:

     (a)  "Employment" means being employed as a permanent, temporary, or seasonal employee as defined in 2-18-101 for a state position. The term does not include:

     (i)  a state elected official;

     (ii) appointment by an elected official to a body, such as a board, commission, committee, or council;

     (iii) appointment by an elected official to a public office if the appointment is provided for by law; or

     (iv) engagement as an independent contractor independently contracted worker or employment by an independent contractor independently contracted worker.

     (b) "Indian" means a person who is enrolled or who is a lineal descendant of a person enrolled upon an enrollment listing of the bureau of Indian affairs or upon the enrollment listing of a recognized Indian tribe, domiciled in the United States.

     (c)  "State agency" means a department, office, board, bureau, commission, agency, or other instrumentality of the executive or judicial branches of the government of this state."

     Section 4.  Section 2-18-601, MCA, is amended to read:

     "2-18-601.  Definitions. For the purpose of this part, except 2-18-620, the following definitions apply:

     (1)  "Agency" means any legally constituted department, board, or commission of state, county, or city government or any political subdivision thereof of state, county, or city government.

     (2)  "Break in service" means a period of time in excess of 5 working days when the person is not employed and that severs continuous employment.

     (3)  "Continuous employment" means working within the same jurisdiction without a break in service of more than 5 working days or without a continuous absence without pay of more than 15 working days.

     (4)  "Employee" means any person employed by an agency except elected state, county, and city officials, schoolteachers, and persons contracted as independent contractors independently contracted workers or hired under personal services contracts.

     (5)  "Full-time employee" means an employee who normally works 40 hours a week.

     (6)  "Holiday" means a scheduled day off with pay to observe a legal holiday, as specified in 1-1-216 or 20-1-305, except Sundays.

     (7)  "Part-time employee" means an employee who normally works less than 40 hours a week.

     (8)  "Permanent employee" means a permanent employee as defined in 2-18-101.

     (9)  "Seasonal employee" means a seasonal employee as defined in 2-18-101.

     (10) "Short-term worker" means a short-term worker has the same meaning as defined provided in 2-18-101.

     (11) "Sick leave" means a leave of absence with pay for a sickness suffered by an employee or a member of the employee's immediate family or for a permanent state employee who is eligible for parental leave under the provisions of 2-18-606.

     (12)  "Temporary employee" means a temporary employee as defined in 2-18-101.

     (13) "Transfer" means a change of employment from one agency to another agency in the same jurisdiction without a break in service.

     (14) "Vacation leave" means a leave of absence with pay for the purpose of rest, relaxation, or personal business at the request of the employee and with the concurrence of the employer."

     Section 5.  Section 7-33-2107, MCA, is amended to read:

     "7-33-2107.  Contracts for fire protection services. (1) The trustees of such a fire district, provided that the owners of 10% of the taxable value of the property in any such the fire district may elect to make such a contract:

     (a)  may contract with the council of any city or town or with the trustees of any other fire district established in any unincorporated territory, town, or village which that has any boundary line lying within 5 straight-line miles of any boundary line of such the district, whether the city or town or other fire district shall lie lies within the same county or another county, for the extension of fire protection service by the city or town or by such the other fire district to property included within such the district; and

     (b)  may agree to pay a reasonable consideration therefor for the service.

     (2)  Likewise, the The trustees may contract to permit such the fire district's equipment and facilities to be used by the cities, towns, or other fire districts which that have any boundary lines lying within 5 straight-line miles of any boundary line of such the district.

     (3)  Likewise, the The trustees may enter into contracts with public or private parties under which such the district fire company may extend fire protection to public or private property lying outside of such the district or any other district or city limits but within 5 straight-line miles of any boundary line of such the district, whether such the public or private property shall lie lies within the same county or another county. Such The district fire company may use such the fire district's equipment and facilities outside of such the district in the performance of such the contracts.

     (4)  All money received from such contracts shall must be deposited in the county treasurer's office and credited to the fire district fund holding such the contracts.

     (5)  The relationship between the fire district and the city, town, or private fire service shall be is that of an independent contractor independently contracted worker."

     Section 6.  Section 15-1-211, MCA, is amended to read:

     "15-1-211.  Uniform tax review procedure -- notice -- appeal. (1) The department of revenue shall provide a uniform tax review procedure for all taxpayers, except as provided in subsection (1)(a).

     (a)  The tax review procedure described in this section applies to all taxes administered by the department and to all issues arising from the administration of taxes, except inheritance taxes, estate taxes, property taxes, and the issue of whether an employer-employee relationship existed between the taxpayer and individuals subjecting the taxpayer to the requirements of chapter 30, part 2, or whether the employment relationship was that of an independent contractor independently contracted worker. The procedure applies to any revised assessment of centrally assessed property taxed pursuant to chapter 23.

     (b)  The term "taxpayers", as used in this section, includes all persons determined by the department to have a potential tax liability.

     (2)  (a) If the department determines that a request for a refund should be denied in whole or part, it shall notify the taxpayer of the determination. If the department determines that a person has failed to pay a sufficient tax, interest, or penalty, it shall provide the taxpayer with notice. The notice stops the running of any applicable statute of limitations regarding the assessment of the tax.

     (b)  A notice under this section must clearly state:

     (i)  the reasons for the department's determination that a refund is not due or that tax plus interest and penalty, if any, are due;

     (ii) the taxpayer's right to a review by the department, the taxpayer's right to appeal after a final department decision, and the taxpayer's right to a review of determinations by the department of labor and industry and board of labor appeals of whether an employer-employee relationship existed between the taxpayer and certain individuals or whether the employment relationship was that of an independent contractor independently contracted worker;

     (iii) failure to notify the department within 30 days will result in a forfeiture of the taxpayer's right to contest the department's determination under this section or to file an appeal with the state tax appeal board;

     (iv) that the taxpayer has 30 days to either notify the department in writing that the taxpayer does not agree with an assessment or pay the amount assessed;

     (v)  that a warrant for distraint placing a lien on the taxpayer's property may be issued unless the taxpayer notifies the department that the taxpayer disagrees with an assessment or pays within 30 days; and

     (vi) that the notice stops the running of the statute of limitations regarding the assessment of the tax.

     (3)  (a) A taxpayer shall notify the department, in writing, that the taxpayer objects to the determination within 30 days from the date that the notice is mailed. The notification by the taxpayer is not required to specify the reasons for the disagreement or be in any particular form unless the taxpayer is objecting to a determination that an employer-employee relationship existed between the taxpayer and individuals, subjecting the taxpayer to the requirements of chapter 30, part 2. If the taxpayer does not notify the department within 30 days:

     (i)  an assessment becomes final and the assessed tax, plus any interest and penalty, must be paid;

     (ii) the taxpayer waives any further right to review under this section or to appeal to the state tax appeal board; and

     (iii) a warrant for distraint may be issued without further opportunity to be heard on the assessment.

     (b)  (i) A taxpayer who notifies the department pursuant to subsection (3)(a) that the taxpayer disagrees with a tax assessment shall present the objections, the reasons for the objections, and any other information to the administrator of the division that administers the tax or to the administrator's designee within 60 days after the notice referred to in subsection (3)(a) is mailed. The reasons for objections may be provided in writing, by telephone, or, if requested by the taxpayer, at an informal conference. An informal conference is not subject to the Montana Administrative Procedure Act.

     (ii) An objection received by the department pursuant to subsection (3)(a) stating that the taxpayer disagrees with the department's determination that an employer-employee relationship existed between the taxpayer and certain individuals, subjecting the taxpayer to the requirements of chapter 30, part 2, must be referred to the department of labor and industry for appeal procedures pursuant to 39-51-2402 and 39-51-2410.

     (c)  Within 60 days after the taxpayer has presented the taxpayer's objections, as provided in subsection (3)(b), the administrator or a designee shall issue a written decision addressing the taxpayer's objections and describing the reasons for the determination. The administrator's decision must also clearly set forth the taxpayer's review rights. The administrator's decision must be provided to the taxpayer and the director of revenue.

     (4)  (a) A taxpayer shall notify the department in writing that the taxpayer objects to the administrator's decision within 30 days from the date that the decision is mailed, or the taxpayer may appeal to the state tax appeal board as provided in subsection (6). If an objection is not made within 30 days, the administrator's decision and any assessment become final. By failing to object, the taxpayer waives any further right to review or appeal and a warrant for distraint may be issued without further opportunity to be heard on the assessment.

     (b)  Except as provided in subsection (6), a taxpayer who objects to the administrator's decision pursuant to subsection (4)(a) shall present the taxpayer's objections, the reasons for the objections, and any other information to the director of revenue or the director's designee within 60 days after the notice referred to in subsection (4)(a) is mailed. The director or the designee may consider written information, hold a telephone conference, or conduct an informal conference, none of which are subject to the Montana Administrative Procedure Act.

     (c)  Within 60 days after the taxpayer has presented the objections, the director or the designee shall issue a written decision addressing the objections and describing the reasons for the decision. The director's decision is the final decision and assessment of the department.

     (5)  The taxpayer shall pay the assessment within 30 days after being mailed a copy of the final decision and assessment unless an appeal is filed with the state tax appeal board. If an appeal with the board is filed within 30 days after the final decision is mailed, payment is not due until final resolution by the board or, if further appeals are filed, by the appropriate court. However, any interest required by law must continue to accrue.

     (6)  (a)  A taxpayer who validly objects to the administrator's decision may elect to file an appeal with the state tax appeal board. The appeal must be filed within 30 days after mailing an objection to the administrator's decision. If an appeal is filed, the administrator's decision is the final decision of the department.

     (b)  If the director notifies the board within 30 days after an appeal is filed that the director has not had an opportunity to review the administrator's decision and the director believes that a review may be helpful in resolving the controversy, the board shall stay the appeal for a time that the board considers reasonable, not to exceed 90 days except by the mutual consent of both parties. The taxpayer shall provide the taxpayer's objections and reasons for the objections to the director so that the director or the director's designee may review the controversy and issue a decision within the period of the stay granted by the board. If the taxpayer is dissatisfied with the director's decision, the stay must be lifted and the appeal resumed.

     (7)  The time limits in this section must be applied and interpreted as provided in Rule 6 of the Montana Rules of Civil Procedure, including additional time for mailing. Any time limit may be extended by mutual consent of the department and the taxpayer. The department shall consent to all reasonable requests for extension of deadlines.

     (8)  (a)  The director of revenue or the director's designee is authorized to enter into an agreement with any taxpayer relating to the taxpayer's liability with respect to a tax administered by the department for any taxable period.

     (b)  An agreement under the provisions of subsection (8)(a) is final and conclusive, and, except upon a showing of fraud, malfeasance, or misrepresentation of a material fact:

     (i)  the agreement may not be reopened as to matters agreed upon or be modified by any officer, employee, or agent of this state; and

     (ii)  in any suit, action, or proceeding under the agreement or any determination, assessment, collection, payment, abatement, refund, or credit made in accordance with the agreement, the agreement may not be annulled, modified, set aside, or disregarded."

     Section 7.  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)  "Domestic or household service" means employment of persons other than members of the household for the purpose of tending to the aid and comfort of the employer or members of the employer's family, including but not limited to housecleaning and yard work but does not include employment beyond the scope of normal household or domestic duties such as home health care or domiciliary care.

     (3)  "Employee" means:

     (a) 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;

     (b) an officer of a corporation;

     (c)  any individual who performs services for another individual or organization having the right to control the employee as to the services to be performed and as to the manner of performance;

     (d)  all classes, grades, or types of employees including minors and aliens, superintendents, managers, and other supervisory personnel.

     (4)  "Employer" means:

     (a) the person for whom an individual performs or performed any service, of whatever nature, as an employee of the person;

     (b)  a person who pays $1,000 or more in wages within the current calendar year;

     (c)  a person who pays $1,000 or more in cash for domestic or household service in any quarter during the current calendar year;

     (d)  any individual or organization, including state government and any of its political subdivisions or instrumentalities, partnership, association, trust, estate, joint-stock company, insurance company, limited liability company or a limited liability partnership that has filed with the secretary of state, or domestic or foreign corporation or the receiver, trustee in bankruptcy, trustee or the trustee's successor, or legal representative of a deceased person who has or had in its employ one or more individuals performing services for it within this state; or

     (e)  any person found to be an employer under Title 39, chapter 51, for unemployment insurance purposes is considered an employer for state income tax withholding purposes.

     (5)  "Independent contractor" "Independently contracted worker" 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.

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

     (7) (a)  "Wages", unless specifically exempted under subsection (7)(b), means all remuneration for services performed by an employee for the employer, including the cash value of all remuneration paid in any medium other than cash, and includes but is not limited to the following:

     (i)  commissions, bonuses, and remuneration paid for overtime work, holidays, vacations, and sickness periods;

     (ii) severance or continuation pay, backpay, and any similar pay made for or in regard to previous service by the employee for the employer, other than retirement or pension benefits from a qualified plan; and

     (iii) except those tips that are exempted in subsection (7)(b)(v), tips or other gratuities received by the employee, to the extent that the tips or gratuities are documented by the employee to the employer for tax purposes.

     (b)  The term "wages" does not include:

     (i)  the amount of any payment made by the employer for employees, if the payment was made for:

     (A)  retirement or pension pursuant to a qualified plan as defined under the provisions of the Internal Revenue Code;

     (B)  sickness or accident disability under a workers' compensation policy;

     (C)  medical or hospitalization expenses in connection with sickness or accident disability, including health insurance for the employee or the employee's immediate family; or

     (D)  death, including life insurance for the employee or the employee's immediate family;

     (ii) compensation in the form of meals and lodging, provided the compensation is not includable in gross income for state individual income tax purposes;

     (iii) distributions from a multiple employer welfare arrangement, as defined in 29 U.S.C. 1002(40)(A), to a qualified individual employee;

     (iv) payments made by an employee to any group plan or program to the extent that the payments are not taxable for state income tax purposes;

     (v)  tips or gratuities that are in accordance with 26 U.S.C. 3402(k) or service charges that are covered by 26 U.S.C. 3401 of the Internal Revenue Code, 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; or

     (vi) payments that may not be taxed under federal law. (Subsection (7)(b)(v) terminates on occurrence of contingency--sec. 3. Ch. 634, L. 1983.)"

     Section 8.  Section 15-30-202, MCA, is amended to read:

     "15-30-202.  Withholding of tax from wages. (1) Each employer, except an independent contractor independently contracted worker, making payment of wages for employment as defined in 15-30-256 shall withhold from wages a tax determined in accordance with the withholding tax tables prepared and issued by the department.

     (2)  An employer who maintains two or more separate establishments within this state is considered to be a single employer for the purposes of this part."

     Section 9.  Section 15-30-256, MCA, is amended to read:

     "15-30-256.  Employment defined and exclusions from definition of employment. (1) As used in this part "employment", subject to the provisions of subsection (2), means the service by an employee for an employer.

     (2)  The term "employment" does not include:

     (a)  household and domestic service in a private home, local college club, or local chapter of a college fraternity or sorority, except as provided in 15-30-201(4)(c);

     (b)  service performed by a dependent, as defined in 26 U.S.C. 152, of a sole proprietor for whom an exemption may be claimed by the employer under the Internal Revenue Code or service performed by a sole proprietor's spouse for whom an exemption based on marital status may be claimed by the sole proprietor pursuant to 26 U.S.C. 7703;

     (c)  service performed as a freelance correspondent or newspaper carrier if the person performing the service, or a parent or guardian of the person performing the service in the case of a minor, has previously acknowledged or acknowledges in writing that the person performing the service and the service are not covered for unemployment insurance purposes. As used in this subsection:

     (i)  "freelance correspondent" is a person who submits articles or photographs for publication and is paid by the article or by the photograph; and

     (ii) "newspaper carrier" means a person who provides a newspaper with the service of delivering newspapers singly or in bundles. The term does not include an employee of the paper who, incidentally to the employee's main duties, carries or delivers papers.

     (d)  service performed as a licensed real estate broker or salesperson under Title 37, chapter 51;

     (e)  service performed by a cosmetologist who is licensed under Title 37, chapter 31, or a barber who is licensed under Title 37, chapter 30, and:

     (i)  who has acknowledged in writing that the cosmetologist or barber working under contract is not covered by unemployment insurance and workers' compensation;

     (ii) who contracts with a cosmetology salon, as defined in 37-31-101, or a barbershop, as defined in 37-30-101, which contract must show that the cosmetologist or barber:

     (A)  is free from all control and direction of the owner in the contract;

     (B)  receives payment for service from individual clientele; and

     (C)  leases, rents, or furnishes all of the cosmetologist's or barber's own equipment, skills, or knowledge; and

     (iii) whose contract gives rise to an action for breach of contract in the event of contract termination. The existence of a single license for the cosmetology salon or barbershop may not be construed as a lack of freedom from control or direction under this subsection.

     (f)  casual labor not in the course of an employer's trade or business performed in any calendar quarter, 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. "Regularly employed" means that the service is performed during at least 24 days in the same quarter.

     (g)  service performed by sole proprietors, working members of a partnership or a limited liability partnership, or members of a member-managed limited liability company that has filed articles of organization with the secretary of state;

     (h)  service performed for the installation of floor coverings if the installer:

     (i)  bids or negotiates a contract price based upon work performed by the yard or by the job;

     (ii) is paid upon completion of an agreed-upon portion of the job or after the job is completed;

     (iii) may perform service for anyone without limitation;

     (iv) may accept or reject any job;

     (v)  furnishes substantially all tools and equipment necessary to provide the service; and

     (vi) works under a written contract that:

     (A)  gives rise to a breach of contract action if the installer or any other party fails to perform the contract obligations;

     (B)  states that the installer is not covered by unemployment insurance; and

     (C)  requires the installer to provide a current workers' compensation policy or to obtain an exemption from workers' compensation requirements;

     (i)  service performed by a direct seller as defined by 26 U.S.C. 3508;

     (j)  service performed by a petroleum land professional. As used in this subsection, "petroleum land professional" means a person who:

     (i)  is engaged primarily in negotiating for the acquisition or divestiture of mineral rights or in negotiating a business agreement for the exploration or development of minerals;

     (ii) is paid for service that is directly related to the completion of a contracted specific task rather than on an hourly wage basis; and

     (iii) performs all service as an independent contractor independently contracted worker pursuant to a written contract.

     (k)  service performed by an ordained, commissioned, or licensed minister of a church in the exercise of the church's ministry or by a member of a religious order in the exercise of duties required by the order;

     (l)  service performed by an individual receiving rehabilitation or remunerative work in a facility conducted for the purpose of carrying out a program of rehabilitation for those individuals whose earning capacity is impaired by age or physical or mental deficiency or injury or providing remunerative work for individuals who, because of impaired physical or mental capacity, cannot be readily absorbed in the competitive labor market;

     (m)  service performed as part of an unemployment work-relief or work-training program assisted or financed in whole or in part by a federal agency or any agency of a state or political subdivision of the state by an individual receiving work relief or work training;

     (n)  service performed by an inmate of a state prison or other state correctional or custodial institution;

     (o)  service by an individual who is sentenced to perform court-ordered community service or similar work;

     (p)  service performed for aid or sustenance only;

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

     (r)  agricultural labor; or

     (s)  service performed by an independent contractor independently contracted worker."

     Section 10.  Section 15-30-303, MCA, is amended to read:

     "15-30-303.  Confidentiality of tax records. (1) Except as provided in subsections (7) and (8) or in accordance with a proper judicial order or as otherwise provided by law, it is unlawful to divulge or make known in any manner:

     (a)  the amount of income or any particulars set forth or disclosed in any individual report or individual return required under this chapter or any other information secured in the administration of this chapter; or

     (b)  any federal return or federal return information disclosed on any return or report required by rule of the department or under this chapter.

     (2)  (a)  The officers charged with the custody of the reports and returns may not be required to produce them or evidence of anything contained in them in an action or proceeding in a court, except in an action or proceeding:

     (i)  to which the department is a party under the provisions of this chapter or any other taxing act; or

     (ii)  on behalf of a party to any action or proceedings under the provisions of this chapter or other taxes when the reports or facts shown by the reports are directly involved in the action or proceedings.

     (b)  The court may require the production of and may admit in evidence only as much of the reports or of the facts shown by the reports as are pertinent to the action or proceedings.

     (3)  This section does not prohibit:

     (a)  the delivery to a taxpayer or the taxpayer's authorized representative of a certified copy of any return or report filed in connection with the taxpayer's tax;

     (b)  the publication of statistics classified to prevent the identification of particular reports or returns and the items of particular reports or returns; or

     (c)  the inspection by the attorney general or other legal representative of the state of the report or return of any taxpayer who brings an action to set aside or review the tax based on the report or return or against whom an action or proceeding has been instituted in accordance with the provisions of 15-30-311.

     (4)  Reports and returns must be preserved for at least 3 years and may be preserved until the department orders them to be destroyed.

     (5)  Any offense against subsections (1) through (4) is punishable by a fine not exceeding $1,000 or by imprisonment in the county jail for a term not exceeding 1 year, or both. If the offender is an officer or employee of the state, the offender must be dismissed from office and may not hold any public office in this state for a period of 1 year after dismissal.

     (6)  This section may not be construed to prohibit the department from providing taxpayer return information and information from employers' payroll withholding reports to:

     (a)  the department of labor and industry to be used for the purpose of investigation and prevention of noncompliance, tax evasion, fraud, and abuse under the unemployment insurance laws; or

     (b)  the state fund to be used for the purpose of investigation and prevention of noncompliance, fraud, and abuse under the workers' compensation program.

     (7)  The department may permit the commissioner of internal revenue of the United States or the proper officer of any state imposing a tax upon the incomes of individuals or the authorized representative of either officer to inspect the return of income of any individual or may furnish to the officer or an authorized representative an abstract of the return of income of any individual or supply the officer with information concerning an item of income contained in a return or disclosed by the report of an investigation of the income or return of income of an individual, but the permission may be granted or information furnished only if the statutes of the United States or of the other state grant substantially similar privileges to the proper officer of this state charged with the administration of this chapter.

     (8)  The department shall furnish:

     (a)  to the department of justice all information necessary to identify those persons qualifying for the additional exemption for blindness pursuant to 15-30-112(4), for the purpose of enabling the department of justice to administer the provisions of 61-5-105;

     (b)  to the department of public health and human services information acquired under 15-30-301, pertaining to an applicant for public assistance, reasonably necessary for the prevention and detection of public assistance fraud and abuse, provided notice to the applicant has been given;

     (c)  to the department of labor and industry for the purpose of prevention and detection of fraud and abuse in and eligibility for benefits under the unemployment compensation and workers' compensation programs information on whether a taxpayer who is the subject of an ongoing investigation by the department of labor and industry is an employee, an independent contractor independently contracted worker, or self-employed;

     (d)  to the department of fish, wildlife, and parks specific information that is available from income tax returns and required under 87-2-102 to establish the residency requirements of an applicant for hunting and fishing licenses;

     (e)  to the board of regents information required under 20-26-1111;

     (f)  to the legislative fiscal analyst and the office of budget and program planning individual income tax information as provided in 5-12-303. The information provided to the office of budget and program planning must be the same as the information provided to the legislative fiscal analyst.

     (g)  to the department of transportation the ratio of gross farm income to total gross income based on the most recent income tax return filed by an applicant applying for a refund under 15-70-223, provided that notice to the applicant has been given as provided in 15-70-223. The information obtained by the department of transportation is subject to the same restrictions on disclosure as are individual income tax returns."

     Section 11.  Section 19-3-403, MCA, is amended to read:

     "19-3-403.  Exclusions from membership. The following persons may not become members of the retirement system:

     (1)  inmates of state institutions;

     (2)  persons in state institutions principally for the purpose of training but who receive compensation;

     (3)  independent contractors independently contracted workers;

     (4)  persons who are members of any other retirement or pension system supported wholly or in part by funds of the United States government, any state government, or political subdivision of the state and who are receiving credit in the other system for service. It is the purpose of this subsection to prevent a person from receiving credit for the same service in two retirement systems supported wholly or in part by public funds, except when the service qualifies, is applied for, and is purchased pursuant to 19-3-503. A member of the retirement system who, because of employment by the state, is required to become a member of any other system described in this subsection is considered, solely for the purposes of making regular contributions, as permanently separated from service. Exclusion under this subsection is subject to the following exceptions:

     (a)  When an employer has entered into a collective bargaining agreement that includes provisions for payments or contributions by the employer in lieu of wages to a retirement or pension plan qualified by the internal revenue service for its employees, the employees remain eligible, if otherwise qualified, for membership in the retirement system.

     (b)  For the purpose of this subsection (4), persons receiving pensions, retirement allowances, or other payments from any source on account of employment other than as an employee are not considered, because of receipt, members of any other retirement or pension system.

     (5)  court commissioners, elected officials, or appointive members of any board or commission who serve the state or any contracting employer intermittently and who are paid on a per diem basis;

     (6)  full-time students employed at and attending the same public elementary school, high school, community college, or unit of the state university system, except that a person excluded from membership as a student of a public community college or a unit of the state university system who later becomes a member by otherwise becoming an employee may affirmatively exercise the option of qualifying the service excluded by this subsection by applying to the board in writing after becoming a member and become eligible to receive credited service for the excluded service under the provisions of 19-3-505."

     Section 12.  Section 19-50-101, MCA, is amended to read:

     "19-50-101.  Definitions. For the purposes of this chapter, unless a different meaning is plainly implied by the context, the following definitions apply:

     (1)  "Administrator" means the department of administration created by 2-15-1001 or an appropriate officer of a political subdivision.

     (2)  "Advisory council" means the state employee group benefits advisory council provided for in 2-15-1016.

     (3)  "Deferred compensation" means that the income which that an employee may legally defer in a deferred compensation plan established under this chapter pursuant to the rulings of the internal revenue service and which that, while invested, is exempt from state and federal income tax on the employee's contribution and on the interest, dividends, and capital gains until ultimately distributed to the employee.

     (4)  "Department" means the department of administration created by 2-15-1001.

     (5)  "Eligible deferred compensation plan" means a plan meeting the requirements of section 457 of the Internal Revenue Code.

     (6)  "Employee" means any person, including independent contractors independently contracted workers and elected officials, receiving compensation from the state or a political subdivision for performing services.

     (7)  "Fund" means the state deferred compensation investment account.

     (8)  "Participant" means an employee enrolled in the plan.

     (9)  "Political subdivision" means any city, town, county, or other political subdivision of the state of Montana."

     Section 13.  Section 30-3-420, MCA, is amended to read:

     "30-3-420.  Employer responsibility for fraudulent indorsement by employee. (1) This section applies to fraudulent indorsements of instruments with respect to which an employer has entrusted an employee with responsibility as part of the employee's duties. The following definitions apply to this section:

     (a)  "Employee" includes, in addition to an employee of an employer, an independent contractor independently contracted worker and an employee of an independent contractor independently contracted worker retained by the employer.

     (b)  "Fraudulent indorsement" means:

     (i)  in the case of an instrument payable to the employer, a forged indorsement purporting to be that of the employer; or

     (ii) in the case of an instrument with respect to which the employer is drawer or maker, a forged indorsement purporting to be that of the person identified as payee.

     (c)  (i) "Responsibility" with respect to instruments means authority to:

     (A)  sign or indorse instruments on behalf of the employer;

     (B)  process instruments received by the employer for bookkeeping purposes, for deposit to an account, or for other disposition;

     (C)  prepare or process instruments for issue in the name of the employer;

     (D)  supply information determining the names or addresses of payees of instruments to be issued in the name of the employer;

     (E)  control the disposition of instruments to be issued in the name of the employer; or

     (F)  otherwise act with respect to instruments in a responsible capacity.

     (ii) The term does not include the assignment of duties that merely allows an employee to have access to instruments or blank or incomplete instrument forms that are being stored or transported or are part of incoming or outgoing mail, or similar access.

     (2)  For purposes of determining the rights and liabilities of a person who in good faith pays an instrument or takes it for value or for collection, if an employee entrusted with responsibility with respect to the instrument or a person acting in concert with the employee makes a fraudulent indorsement to the instrument, the indorsement is effective as the indorsement of the person to whom the instrument is payable if it is made in the name of that person. If the person paying the instrument or taking it for value or for collection fails to exercise ordinary care in paying or taking the instrument and that failure substantially contributes to loss resulting from the fraud, the person bearing the loss may recover from the person failing to exercise ordinary care to the extent the failure to exercise ordinary care contributed to the loss.

     (3)  Under subsection (2), an indorsement is made in the name of the person to whom an instrument is payable if:

     (a)  it is made in a name substantially similar to the name of that person; or

     (b)  the instrument, whether or not indorsed, is deposited in a depositary bank to an account in a name substantially similar to the name of that person."

     Section 14.  Section 33-2-1392, MCA, is amended to read:

     "33-2-1392.  Indemnification of rehabilitator, liquidator, and employees -- persons covered. (1) The persons entitled to protection under 33-2-1393 and 33-2-1394 are:

     (a)  all rehabilitators and liquidators responsible for the conduct of a delinquency proceeding under Title 33, chapter 2, including present and former rehabilitators and liquidators; and

     (b)  the employees of the rehabilitators and liquidators, including all present and former special deputies and assistant special deputies appointed by the commissioner, and all persons whom the commissioner, special deputies, or assistant special deputies have employed to assist in a delinquency proceeding under Title 33, chapter 2.

     (2)  Attorneys, accountants, auditors, and other professional persons or firms, who are retained by the rehabilitator or liquidator as independent contractors independently contracted workers, and their employees are not considered employees of the rehabilitator or liquidator for purposes of any cause of action initiated by the rehabilitator or liquidator against the independent contractor independently contracted worker in the name of the rehabilitation or liquidation estate."

     Section 15.  Section 33-2-1394, MCA, is amended to read:

     "33-2-1394.  Settlement of actions against rehabilitator, liquidator, and employees -- court approval -- applicability. (1) If any legal action against an employee for which indemnity may be available under this section is settled prior to final adjudication on the merits, the insurer shall pay the settlement amount on behalf of the employee or indemnify the employee for the settlement amount unless the commissioner determines:

     (a)  that the claim did not arise out of or by reason of the employee's duties or employment; or

     (b)  that the claim was caused by the intentional or willful and wanton misconduct of the employee.

     (2)  In a legal action in which the rehabilitator or liquidator is a defendant, that portion of any settlement relating to the alleged act, error, or omission of the rehabilitator or liquidator is subject to the approval of the court before which the delinquency proceeding is pending. The court may not approve that portion of the settlement if it determines:

     (a)  that the claim did not arise out of or by reason of the rehabilitator's or liquidator's duties or employment; or

     (b)  that the claim was caused by the intentional or willful and wanton misconduct of the rehabilitator or liquidator.

     (3)  This section may not be construed to deprive the rehabilitator, liquidator, or employee of immunity, indemnity, benefit of law, right, or defense available under any provision of law, including, without limitation, the provisions of Title 2, chapter 9.

     (4)  (a)  Except as otherwise provided, a legal action by a third party does not lie against the rehabilitator, liquidator, or employee based in whole or in part on any alleged act, error, or omission that took place prior to October 1, 1993, unless suit is filed and valid service of process is obtained by October 1, 1994. A legal action that is pending on or filed after September 30, 1993, by a liquidator or a liquidation estate will lie against a former special deputy liquidator or any employee, agent, or independent contractor independently contracted worker retained by a special deputy liquidator without regard to when the alleged act, error, or omission occurred.

     (b)  Subsections (1) through (3) apply to any suit that is pending on or filed after October 1, 1993, without regard to when the alleged act, error, or omission took place."

     Section 16.  Section 33-11-102, MCA, is amended to read:

     "33-11-102.  Definitions. As used in this part, the following definitions apply:

     (1)  "Completed operations liability" means:

     (a)  liability arising out of the installation, maintenance, or repair of any product at a site that is not owned or controlled by:

     (i)  a person who performs that work; or

     (ii) a person who hires an independent contractor independently contracted worker to perform that work; and

     (b)  liability for activities that are completed or abandoned before the date of the occurrence giving rise to the liability.

     (2)  "Domicile", for purposes of determining the state where a purchasing group is domiciled, means:

     (a)  for a corporation, the state where the purchasing group is incorporated; and

     (b)  for an unincorporated entity, the state of its principal place of business.

     (3)  "Hazardous financial condition" means that, based on its present or reasonably anticipated financial condition, a risk retention group, although not yet financially impaired or insolvent, is unlikely to be able to:

     (a)  meet obligations to policyholders with respect to known claims and reasonably anticipated claims; or

     (b)  pay other obligations in the normal course of business.

     (4)  "Insurance" means primary insurance, excess insurance, reinsurance, surplus line insurance, and any other arrangement for shifting and distributing risk that is determined to be insurance under the laws of this state.

     (5)  (a) "Liability" means legal liability for damages, including costs of defense, legal costs and fees, and other claims expenses, because of injuries to other persons, damage to their property, or other damage or loss to other persons resulting from or arising out of:

     (i)  a business, whether profit or nonprofit, trade, product, service (including professional service), premises, or operation; or

     (ii) an activity of any state or local government or an agency or political subdivision of state or local government.

     (b)  The term does not include personal risk liability or an employer's liability with respect to its employees other than legal liability under the federal Employers' Liability Act, 45 U.S.C. 51 through 60. As used in this subsection, "personal risk liability" means liability for damages because of injury to any person, damage to property, or other loss or damage resulting from personal, familial, or household responsibilities or activities rather than from responsibilities or activities referred to in subsection (5)(a).

     (6)  "Plan of operation or a feasibility study" means an analysis that presents the expected activities and results of a risk retention group, including at a minimum:

     (a)  the coverages, deductibles, coverage limits, rates, and rating classification systems for each line of insurance the group intends to offer;

     (b)  historical and expected loss experience of the proposed members and national experience of similar exposures to the extent this experience is reasonably available;

     (c)  pro forma financial statements and projections;

     (d)  appropriate opinions by a qualified independent casualty actuary, including a determination of minimum premium or participation levels required to commence operations and to prevent a hazardous financial condition;

     (e)  identification of management, underwriting procedures, managerial oversight methods, and investment policies; and

     (f)  other matters as may be prescribed by the commissioner for liability insurance companies authorized by the insurance laws of the state where the risk retention group is chartered.

     (7)  "Purchasing group" means a group that:

     (a)  has as one of its purposes the purchase of liability insurance on a group basis;

     (b)  purchases liability insurance only for its group members and only to cover their similar or related liability exposure, as described in subsection (7)(c);

     (c)  is composed of members whose businesses or activities are similar or related with respect to the liability to which members are exposed by virtue of any related, similar, or common business, trade, product, service, premises, or operation; and

     (d)  is domiciled in any state.

     (8)  "Risk retention group" means a corporation or other limited liability association formed under the laws of any state, Bermuda, or the Cayman Islands:

     (a)  whose primary activity consists of assuming and spreading all or any portion of the liability exposure of its group members;

     (b)  that is organized for the primary purpose of conducting the activity described under subsection (8)(a);

     (c)  (i) that is chartered and licensed as a liability insurance company and authorized to engage in the business of insurance under the laws of any state; or

     (ii) that, before January 1, 1985, was chartered or licensed and authorized to engage in the business of insurance under the laws of Bermuda or the Cayman Islands and, before that date, had certified to the insurance regulatory official of at least one state that it satisfied the capitalization requirements of that state. However, the group is considered to be a risk retention group only if it has been engaged in business continuously since January 1, 1985, and only for the purpose of continuing to provide insurance to cover product liability or completed operations liability. For purposes of this subsection (8), "product liability" means liability for damages because of any personal injury, death, emotional harm, consequential economic damage, or property damage, including damages resulting from the loss of use of property, arising out of the manufacture, design, importation, distribution, packaging, labeling, lease, or sale of a product but does not include the liability of any person for those damages if the product involved was in the possession of that person when the incident giving rise to the claim occurred.

     (d)  that does not exclude any person from membership in the group solely to provide to members of the group a competitive advantage over the person;

     (e)  (i) that has as its members only persons who have an ownership interest in the group and that has as its owners only persons who are members and who are provided insurance by the risk retention group; or

     (ii) that has as its sole member and sole owner an organization that is owned by persons who are provided insurance by the risk retention group;

     (f)  whose members are engaged in businesses or activities that are similar or related with respect to the liability to which the members are exposed by virtue of any related, similar, or common business, trade, product, service, premises, or operation;

     (g)  whose activities do not include the provision of insurance other than:

     (i)  liability insurance for assuming and spreading all or any portion of the liability of its group members; and

     (ii) reinsurance with respect to the liability of any other risk retention group or member of the other group that is engaged in businesses or activities so that the group or member meets the requirement described in subsection (8)(f) for membership in the risk retention group that provides the reinsurance; and

     (h)  whose name includes the phrase "risk retention group".

     (9)  "State" means any state of the United States or the District of Columbia."

     Section 17.  Section 33-17-102, MCA, is amended to read:

     "33-17-102.  Definitions. As used in this title, the following definitions apply:

     (1)  "Adjuster" means a person who, on behalf of the insurer, for compensation as an independent contractor independently contracted worker or as the employee of an independent contractor independently contracted worker or for a fee or commission investigates and negotiates settlement of claims arising under insurance contracts or otherwise acts on behalf of the insurer. The term does not include a:

     (a)  licensed attorney who is qualified to practice law in this state;

     (b)  salaried employee of an insurer or of a managing general agent;

     (c)  licensed insurance producer who adjusts or assists in adjustment of losses arising under policies issued by the insurer; or

     (d)  licensed third-party administrator who adjusts or assists in adjustment of losses arising under policies issued by the insurer.

     (2)  "Adjuster license" means a document issued by the commissioner that authorizes a person to act as an adjuster.

     (3)  (a) "Administrator" means a person who collects charges or premiums from residents of this state in connection with life, disability, property, or casualty insurance or annuities or who adjusts or settles claims on these coverages.

     (b)  The term does not mean:

     (i)  an employer on behalf of its employees or on behalf of the employees of one or more subsidiaries of affiliated corporations of the employer;

     (ii) a union on behalf of its members;

     (iii) (A) an insurer that is either authorized in this state or acting as an insurer with respect to a policy lawfully issued and delivered by it in and pursuant to the laws of a state in which the insurer is authorized to transact insurance; or

     (B)  a health service corporation as defined in 33-30-101;

     (iv) a life, disability, property, or casualty insurance producer who is licensed in this state and whose activities are limited exclusively to the sale of insurance;

     (v)  a creditor on behalf of its debtors with respect to insurance covering a debt between the creditor and its debtors;

     (vi) a trust established in conformity with 29 U.S.C. 186 or the trustees, agents, and employees of the trust;

     (vii) a trust exempt from taxation under section 501(a) of the Internal Revenue Code or the trustees and employees of the trust;

     (viii) a custodian acting pursuant to a custodian account that meets the requirements of section 401(f) of the Internal Revenue Code or the agents and employees of the custodian;

     (ix) a bank, credit union, or other financial institution that is subject to supervision or examination by federal or state banking authorities;

     (x)  a company that issues credit cards and that advances for and collects premiums or charges from its credit card holders who have authorized it to do so, if the company does not adjust or settle claims;

     (xi) a person who adjusts or settles claims in the normal course of the person's practice or employment as an attorney and who does not collect charges or premiums in connection with life or disability insurance or annuities; or

     (xii) a person appointed as a managing general agent in this state whose activities are limited exclusively to those described in 33-2-1501(10) and Title 33, chapter 2, part 16.

     (4)  "Administrator license" means a document issued by the commissioner that authorizes a person to act as an administrator.

     (5)  "Consultant" means a person who for a fee examines, appraises, reviews, or evaluates an insurance policy, annuity, or pension contract, plan, or program or who makes recommendations or gives advice on an insurance policy, annuity, or pension contract, plan, or program.

     (6)  "Consultant license" means a document issued by the commissioner that authorizes a person to act as an insurance consultant.

     (7)  "Controlled business" means insurance procured or to be procured by or through a person upon the life, person, property, or risks of the person or the person's spouse, employer, or business.

     (8)  "Individual" means a private or natural person, as distinguished from a partnership, corporation, or association.

     (9)  "Insurance producer", except as provided in 33-17-103:

     (a)  means:

     (i)  a person who solicits, negotiates, effects, procures, delivers, renews, continues, or binds:

     (A)  policies of insurance for risks residing, located, or to be performed in this state; or

     (B)  membership contracts as defined in 33-30-101;

     (ii) a managing general agent. For purposes of this chapter, the term "managing general agent" has the same meaning as set forth in 33-2-1501.

     (b)  does not mean a customer service representative. For purposes of this definition, a "customer service representative" means a salaried employee of an insurance producer who assists and is responsible to the insurance producer.

     (10) "License" means a document issued by the commissioner that authorizes a person to act as an insurance producer for the kinds of insurance specified in the document. The license itself does not create actual, apparent, or inherent authority in the holder to represent or commit an insurer to a binding agreement.

     (11) "Person" means an individual, partnership, corporation, association, or other legal entity.

     (12) "Public adjuster" means an adjuster employed by and representing the interests of the insured."

     Section 18.  Section 33-22-1514, MCA, is amended to read:

     "33-22-1514.  Administration of association plan -- rules. (1) The association shall select one lead carrier to issue the association plan. The board of directors of the association shall prepare appropriate specifications and bid forms and may solicit bids from licensed administrators and the members of the association for the purpose of selecting the lead carrier. The selection of the lead carrier must be based upon criteria established by the board of directors.

     (2)  The lead carrier shall perform all administrative and claims payment functions required by this section upon the commissioner's approval of the policy forms and contracts submitted. The lead carrier shall provide these services for a period of at least 3 years, unless a request to terminate is approved by the association and the commissioner. The association and the commissioner shall approve or deny a request to terminate within 90 days of its receipt. A failure to make a final decision on a request to terminate within the specified period is considered an approval. The association shall invite submissions of policy forms from members of the association, including the lead carrier, 6 months prior to the expiration of each 3-year period. The association shall follow the procedure provided in subsection (1) in selecting a lead carrier for the subsequent 3-year period or, if a request to terminate is approved, on or before the end of the 3-year period.

     (3)  The lead carrier shall provide all eligible persons involved in the association plan an individual certificate setting forth a statement as to the insurance protection to which the person is entitled, the method and place of filing claims, and to whom benefits are payable. The certificate must indicate that coverage was obtained through the association.

     (4)  The lead carrier shall submit to the association and the commissioner on a semiannual basis a report of the operation of the association plan. The association must determine the specific information to be contained in the report prior to the effective date of the association plan.

     (5)  The lead carrier shall pay all claims pursuant to this part and shall indicate that the claim was paid by the association plan. Each claim payment must include information specifying the procedure involved in the event a dispute over the amount of payment arises.

     (6)  The lead carrier must be reimbursed from the association plan premiums received for its direct and indirect expenses. Direct and indirect expenses include a prorated reimbursement for the portion of the lead carrier's administrative, printing, claims administration, management, and building overhead expenses, which are assignable to the maintenance and administration of the association plan. The association must shall approve cost accounting methods to substantiate the lead carrier's cost reports consistent with generally accepted accounting principles. Direct and indirect expenses may not include costs directly related to the original submission of policy forms prior to selection as the lead carrier.

     (7)  The lead carrier is, when carrying out its duties under this part, an independent contractor independently contracted worker for the association and is individually liable for its actions, subject to the laws of this state."

     Section 19.  Section 33-22-1803, MCA, is amended to read:

     "33-22-1803.  Definitions. As used in this part, the following definitions apply:

     (1)  "Actuarial certification" means a written statement by a member of the American academy of actuaries or other individual acceptable to the commissioner that a small employer carrier is in compliance with the provisions of 33-22-1809, based upon the person's examination, including a review of the appropriate records and of the actuarial assumptions and methods used by the small employer carrier in establishing premium rates for applicable health benefit plans.

     (2)  "Affiliate" or "affiliated" means any entity or person who directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with a specified entity or person.

     (3)  "Assessable carrier" means all carriers of disability insurance, including excess of loss and stop loss disability insurance.

     (4)  "Base premium rate" means, for each class of business as to a rating period, the lowest premium rate charged or that could have been charged under the rating system for that class of business by the small employer carrier to small employers with similar case characteristics for health benefit plans with the same or similar coverage.

     (5)  "Basic health benefit plan" means a health benefit plan, except a uniform health benefit plan, developed by a small employer carrier, that has a lower benefit value than the small employer carrier's standard benefit plan and that provides the benefits required by 33-22-1827.

     (6)  "Benefit value" means a numerical value based on the expected dollar value of benefits payable to an insured under a health benefit plan. The benefit value must be calculated by the small employer carrier using an actuarially based method and must take into account all health care expenses covered by the health benefit plan and all cost-sharing features of the health benefit plan, including deductibles, coinsurance, copayments, and the insured individual's maximum out-of-pocket expenses. The benefit value must apply equally to indemnity-type health benefit plans and to managed care health benefit plans, including health maintenance organization-type plans.

     (7)  "Board" means the board of directors of the program established pursuant to 33-22-1818.

     (8)  "Bona fide association" means an association that:

     (a)  has been actively in existence for at least 5 years;

     (b)  was formed and has been maintained in good faith for purposes other than obtaining insurance;

     (c)  does not condition membership in the association on a health status-related factor relating to an individual, including an employee of an employer or a dependent of an employee;

     (d)  makes health insurance coverage offered through the association available to a member regardless of a health status-related factor relating to the member or an individual eligible for coverage through a member;

     (e)  does not make health insurance coverage offered through the association available other than in connection with a member of the association; and

     (f)  meets any additional requirements required by law.

     (9)  "Carrier" means any person who provides a health benefit plan in this state subject to state insurance regulation. The term includes but is not limited to an insurance company, a fraternal benefit society, a health service corporation, and a health maintenance organization. For purposes of this part, companies that are affiliated companies or that are eligible to file a consolidated tax return must be treated as one carrier, except that the following may be considered as separate carriers:

     (a)  an insurance company or health service corporation that is an affiliate of a health maintenance organization located in this state;

     (b)  a health maintenance organization located in this state that is an affiliate of an insurance company or health service corporation; or

     (c)  a health maintenance organization that operates only one health maintenance organization in an established geographic service area of this state.

     (10) "Case characteristics" means demographic or other objective characteristics of a small employer that are considered by the small employer carrier in the determination of premium rates for the small employer, provided that gender, claims experience, health status, and duration of coverage are not case characteristics for purposes of this part.

     (11) "Class of business" means all or a separate grouping of small employers established pursuant to 33-22-1808.

     (12) "Dependent" means:

     (a)  a spouse or an unmarried child under 19 years of age;

     (b)  an unmarried child, under 23 years of age, who is a full-time student and who is financially dependent on the insured;

     (c)  a child of any age who is disabled and dependent upon the parent as provided in 33-22-506 and 33-30-1003; or

     (d)  any other individual defined as a dependent in the health benefit plan covering the employee.

     (13) "Eligible employee" means an employee who works on a full-time basis with a normal workweek of 30 hours or more, except that at the sole discretion of the employer, the term may include an employee who works on a full-time basis with a normal workweek of between 20 and 40 hours as long as this eligibility criteria is applied uniformly among all of the employer's employees. The term includes a sole proprietor, a partner of a partnership, and an independent contractor independently contracted worker if the sole proprietor, partner, or independent contractor independently contracted worker is included as an employee under a health benefit plan of a small employer. The term does not include an employee who works on a part-time, temporary, or substitute basis.

     (14) "Established geographic service area" means a geographic area, as approved by the commissioner and based on the carrier's certificate of authority to transact insurance in this state, within which the carrier is authorized to provide coverage.

     (15) "Health benefit plan" means any hospital or medical policy or certificate providing for physical and mental health care issued by an insurance company, a fraternal benefit society, or a health service corporation or issued under a health maintenance organization subscriber contract. Health benefit plan does not include coverage of excepted benefits if coverage is provided under a separate policy, certificate, or contract of insurance.

     (16) "Index rate" means, for each class of business for a rating period for small employers with similar case characteristics, the average of the applicable base premium rate and the corresponding highest premium rate.

     (17) "New business premium rate" means, for each class of business for a rating period, the lowest premium rate charged or offered or that could have been charged or offered by the small employer carrier to small employers with similar case characteristics for newly issued health benefit plans with the same or similar coverage.

     (18) "Plan of operation" means the operation of the program established pursuant to 33-22-1818.

     (19) "Premium" means all money paid by a small employer and eligible employees as a condition of receiving coverage from a small employer carrier, including any fees or other contributions associated with the health benefit plan.

     (20) "Program" means the Montana small employer health reinsurance program created by 33-22-1818.

     (21) "Rating period" means the calendar period for which premium rates established by a small employer carrier are assumed to be in effect.

     (22) "Reinsuring carrier" means a small employer carrier participating in the reinsurance program pursuant to 33-22-1819.

     (23) "Restricted network provision" means a provision of a health benefit plan that conditions the payment of benefits, in whole or in part, on the use of health care providers that have entered into a contractual arrangement with the carrier pursuant to Title 33, chapter 22, part 17, or Title 33, chapter 31, to provide health care services to covered individuals.

     (24) "Small employer" means a person, firm, corporation, partnership, or bona fide association that is actively engaged in business and that, with respect to a calendar year and a plan year, employed at least 2 but not more than 50 eligible employees during the preceding calendar year and employed at least two employees on the first day of the plan year. In the case of an employer that was not in existence throughout the preceding calendar year, the determination of whether the employer is a small or large employer must be based on the average number of employees reasonably expected to be employed by the employer in the current calendar year. In determining the number of eligible employees, companies are considered one employer if they:

     (a)  are affiliated companies;

     (b)  are eligible to file a combined tax return for purposes of state taxation; or

     (c)  are members of a bona fide association.

     (25) "Small employer carrier" means a carrier that offers health benefit plans that cover eligible employees of one or more small employers in this state.

     (26) "Standard health benefit plan" means a health benefit plan that is developed by a small employer carrier and that contains the provisions required pursuant to 33-22-1828."

     Section 20.  Section 33-35-203, MCA, is amended to read:

     "33-35-203.  Requirements applicable only to arrangements organized after October 1, 1995. (1) In addition to the requirements of 33-35-202, self-funded multiple employer welfare arrangements formed after October 1, 1995, are subject to the following requirements:

     (a)  arrangements shall maintain a calendar year for operations and reporting purposes unless the commissioner consents to a fiscal year;

     (b)  arrangements shall satisfy one of the following requirements:

     (i)  (A) the arrangement shall deposit $200,000 with the commissioner pursuant to Title 33, chapter 2, part 6, to be used for the payment of claims in the event that the arrangement becomes insolvent; and

     (B)  the arrangement shall submit to the commissioner a written plan of operation that, in the reasonable discretion of the commissioner, ensures the financial integrity of the arrangement; or

     (ii) the arrangement demonstrates to the reasonable satisfaction of the commissioner the ability of the arrangement to remain financially solvent, for which purpose the commissioner may consider:

     (A)  the pro forma financial statements of the self-funded multiple employer welfare arrangement;

     (B)  the types and levels of excess loss insurance coverage, including the attachment points of the coverage and whether the points are reflected as annual or monthly levels;

     (C)  whether a deposit is required for each employee covered under the arrangement equal to at least one month's cost of providing benefits under the arrangement;

     (D)  the experience of the individuals who will be involved in the management of the arrangement, including employees, independent contractors independently contracted workers, and consultants; and

     (E)  other factors as reasonably determined by the commissioner to be relevant to a determination of whether the arrangement is able to operate in a financially solvent manner.

     (2)  Financial information relating to the employers is subject to the confidentiality provisions of 33-1-409(6).

     (3)  The commissioner may require that the articles, bylaws, agreements, trusts, or other documents or instruments describing the rights and obligations of the employers, employees, and beneficiaries of the arrangement provide that employers participating in the arrangement are subject to pro rata assessment for all liabilities of the arrangement.

     (4)  Arrangements shall maintain excess loss insurance coverage covering 100% of claims in excess of the designated attachment point. The commissioner may waive the requirement of excess loss insurance coverage.

     (5)  An arrangement shall submit its base contribution rates for participation under the arrangement for its initial year of operations for review and approval by the commissioner.

     (6)  The commissioner may require continued compliance with respect to the conditions set forth in this section as a condition of granting a certificate of authority to an arrangement. The commissioner may waive continued compliance with respect to the conditions in this section at any time after the commissioner has granted a certificate of authority to an arrangement."

     Section 21.  Section 35-1-1026, MCA, is amended to read:

     "35-1-1026.  Authority to transact business required. (1) A foreign corporation may not transact business in this state until it obtains a certificate of authority from the secretary of state.

     (2)  The following activities, among others, do not constitute transacting business within the meaning of subsection (1):

     (a)  maintaining, defending, or settling any proceeding;

     (b)  holding meetings of the board of directors or shareholders or carrying on other activities concerning internal corporate affairs;

     (c)  maintaining bank accounts;

     (d)  maintaining offices or agencies for the transfer, exchange, and registration of the corporation's own securities or maintaining trustees or depositaries with respect to those securities;

     (e)  selling through independent contractors independently contracted workers;

     (f)  soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts;

     (g)  creating or acquiring indebtedness, mortgages, and security interests in real or personal property;

     (h)  securing or collecting debts or enforcing mortgages and security interests in property securing the debts;

     (i)  owning real or personal property that is acquired incident to activities described in subsection (2)(h) if the property is disposed of within 5 years after the date of acquisition does not produce income, or is not used in the performance of a corporate function;

     (j)  conducting an isolated transaction that is completed within 30 days and that is not a transaction in the course of repeated transactions of a similar nature; or

     (k)  transacting business in interstate commerce.

     (3)  The list of activities in subsection (2) is not exhaustive."

     Section 22.  Section 35-2-820, MCA, is amended to read:

     "35-2-820.  Authority to transact business required. (1) A foreign corporation may not transact business in this state until it obtains a certificate of authority from the secretary of state.

     (2)  The following activities, among others, do not constitute transacting business within the meaning of subsection (1):

     (a)  maintaining, defending, or settling any proceeding;

     (b)  holding meetings of the board of directors or members or carrying on other activities concerning internal corporate affairs;

     (c)  maintaining bank accounts;

     (d)  maintaining offices or agencies for the transfer, exchange, and registration of memberships or securities or maintaining trustees or depositaries with respect to those securities;

     (e)  selling through independent contractors independently contracted workers;

     (f)  soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts;

     (g)  creating or acquiring indebtedness, mortgages, and security interests in real or personal property;

     (h)  securing or collecting debts or enforcing mortgages and security interests in property securing the debts;

     (i)  owning real or personal property:

     (i)  that is acquired incident to activities described in subsection (2)(h) if the property is disposed of within 5 years after the date of acquisition; or

     (ii) that does not produce income or is not used in the performance of a corporate function;

     (j)  conducting an isolated transaction that is completed within 30 days and that is not a transaction in the course of repeated transactions of a similar nature; or

     (k)  transacting business in interstate commerce.

     (3)  The list of activities in subsection (2) is not exhaustive."

     Section 23.  Section 35-8-1001, MCA, is amended to read:

     "35-8-1001.  Authority to transact business required. (1) A foreign limited liability company may not transact business in this state until it obtains a certificate of authority from the secretary of state.

     (2)  The following activities, among others, do not constitute transacting business within the meaning of subsection (1):

     (a)  maintaining, defending, or settling any proceeding;

     (b)  holding meetings of the members or managers or carrying on other activities concerning internal affairs of the limited liability company;

     (c)  maintaining bank accounts;

     (d)  maintaining offices or agencies for the transfer, exchange, and registration of the limited liability company's own securities or maintaining trustees or depositaries with respect to those securities;

     (e)  selling through independent contractors independently contracted workers;

     (f)  soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts;

     (g)  creating or acquiring indebtedness, mortgages, and security interests in real or personal property;

     (h)  securing or collecting debts or enforcing mortgages and security interests in property securing the debts;

     (i)  owning real or personal property that is acquired incident to activities described in subsection (2)(h) if the property is disposed of within 5 years after the date of acquisition, does not produce income, or is not used in the performance of a function of the limited liability company;

     (j)  conducting an isolated transaction that is completed within 30 days and that is not a transaction in the course of repeated transactions of a similar nature; or

     (k)  transacting business in interstate commerce.

     (3)  The list of activities in subsection (2) is not exhaustive."

     Section 24.  Section 35-10-202, MCA, is amended to read:

     "35-10-202.  Creation of partnership. (1) Except as provided in subsection (2), the association of two or more persons to carry on as co-owners a business for profit creates a partnership, whether or not the persons intend to create a partnership.

     (2)  An association created under a statute other than this chapter, a predecessor law, or a comparable law of another jurisdiction is not a partnership.

     (3)  In determining whether a partnership is created, the following rules apply:

     (a)  Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership does not by itself establish a partnership even if the co-owners share profits made by the use of the property.

     (b)  The sharing of gross returns does not by itself establish a partnership even if the persons sharing them have a joint or common right or interest in property from which the returns are derived.

     (c)  A person who receives a share of the profits of a business is presumed to be a partner in the business, unless the profits were received in payment:

     (i)  of a debt by installments or otherwise;

     (ii) for services as an independent contractor independently contracted worker or of wages or other compensation to an employee;

     (iii) of rent;

     (iv) of an annuity or other retirement or health benefit to a beneficiary, representative, or designee of a deceased or retired partner;

     (v)  of interest or of another charge on a loan, even if the amount of payment varies with the profits of the business, including a direct or indirect present or future ownership of the collateral or rights to income, proceeds, or increase in value derived from the collateral; or

     (vi) for the sale of the goodwill of a business or other property by installments or otherwise.

     (4)  Except as provided by 35-10-308, persons who are not partners as to each other are not partners as to other persons.

     (5)  A partnership created under this chapter is a general partnership, and the partners are general partners of the partnership."

     Section 25.  Section 37-47-304, MCA, is amended to read:

     "37-47-304.  Application. (1) Each applicant for an outfitter's, guide's, or professional guide's license shall make application for license on a form prescribed and furnished by the board.

     (2)  The application for an outfitter's license forms the basis for the outfitter's operations plan and must include:

     (a)  the applicant's full name, residence, address, conservation license number, driver's license number, birth date, physical description, and telephone number;

     (b)  the address of the applicant's principal place of business in the state of Montana;

     (c)  the amount and kind of property and equipment owned and used in the outfitting business of the applicant;

     (d)  the experience of the applicant, including years of experience as an outfitter, guide, or professional guide; the applicant's knowledge of areas in which the applicant has operated and intends to operate; and the applicant's ability to cope with weather conditions and terrain;

     (e)  a signed statement of the licensed outfitter for each guide and professional guide to be employed or retained as an independent contractor independently contracted worker stating that the guide or professional guide is to be employed by the outfitter and stating that the outfitter recommends the guide or professional guide for licensure;

     (f)  an affidavit by the outfitter to the board that the equipment listed on the application is in fact owned or leased by the applicant, is in good operating condition, and is sufficient and satisfactory for the services advertised or contemplated to be performed by the applicant;

     (g)  a statement of the maximum number of participants to be accompanied at any one time;

     (h)  the written approval of the appropriate agency or landowner on whose lands the applicant will provide services or establish hunting camps; and

     (i)  the boundaries of the proposed operation, stating when applicable:

     (i)  the name and portion of river;

     (ii) the county of location;

     (iii) the legal owner of the property;

     (iv) the name of the ranch;

     (v)  the proposed service, including the type of game sought;

     (vi) the name of the agency granting use authority; and

     (vii) other means of identifying boundaries as established by board rule.

     (3)  Applications for an outfitter's license must be in the name of an individual person only. Applications involving corporations, proprietorships, or partnerships must be made by one individual person who qualifies under the provisions of this part. A license issued pursuant to this part must be in the name of that person. The license must specifically state that the license is issued for the use and benefit of the named corporation, proprietorship, or partnership involved. Any revocation or suspension of a license is binding upon the individual person and the corporation, proprietorship, or partnership for the use and benefit of which the license was originally issued.

     (4)  Application must be made to and filed with the board.

     (5)  Only one application for an outfitter's license may be made in any license year. If an application is denied, subsequent applications by the same applicant for the license year involved are void, except as provided in 37-47-308."

     Section 26.  Section 37-51-102, MCA, is amended to read:

     "37-51-102.  Definitions. Unless the context requires otherwise, in this chapter, the following definitions apply:

     (1)  "Account" means the real estate recovery account established in 37-51-501.

     (2)  (a) "Adverse material fact" means a fact that should be recognized by a broker or salesperson as being of enough significance as to affect a person's decision to enter into a contract to buy or sell real property and may be a fact that:

     (i)  materially affects the value, affects structural integrity, or presents a documented health risk to occupants of the property; or

     (ii) materially affects the buyer's ability or intent to perform the buyer's obligations under a proposed or existing contract.

     (b)  The term does not include the fact that an occupant of the property has or has had a communicable disease or that the property was the site of a suicide or felony.

     (3)  "Board" means the board of realty regulation provided for in 2-15-1867.

     (4)  "Broker" includes an individual who:

     (a)  for another or for valuable consideration or who with the intent or expectation of receiving valuable consideration negotiates or attempts to negotiate the listing, sale, purchase, rental, exchange, or lease of real estate or of the improvements on real estate or collects rents or attempts to collect rents;

     (b)  is employed by or on behalf of the owner or lessor of real estate to conduct the sale, leasing, subleasing, or other disposition of real estate for consideration;

     (c)  engages in the business of charging an advance fee or contracting for collection of a fee in connection with a contract by which the individual undertakes primarily to promote the sale, lease, or other disposition of real estate in this state through its listing in a publication issued primarily for this purpose or for referral of information concerning real estate to brokers;

     (d)  makes the advertising, sale, lease, or other real estate information available by public display to potential buyers and who aids, attempts, or offers to aid, for a fee, any person in locating or obtaining any real estate for purchase or lease;

     (e)  aids or attempts or offers to aid, for a fee, any person in locating or obtaining any real estate for purchase or lease;

     (f)  receives a fee, commission, or other compensation for referring to a licensed broker or salesperson the name of a prospective buyer or seller of real property; or

     (g)  advertises or represents to the public that the individual is engaged in any of the activities referred to in subsections (4)(a) through (4)(f).

     (5)  "Broker associate" means a broker who associates, as an employee or independent contractor an independently contracted worker, with a broker owner and does not own an interest in a real estate firm.

     (6)  "Broker owner" means a broker who owns or has a financial interest in a real estate firm.

     (7)  "Buyer" means a person who is interested in acquiring an ownership interest in real property or who has entered into an agreement to acquire an interest in real property. The term includes tenants or potential tenants with respect to leases or rental agreements of real property.

     (8)  "Buyer agent" means a broker or salesperson who, pursuant to a written buyer broker agreement, is acting as the agent of the buyer in a real estate transaction and includes a buyer subagent and an in-house buyer agent designate.

     (9)  "Buyer broker agreement" means a written agreement in which a prospective buyer employs a broker to locate real estate of the type and with terms and conditions as designated in the written agreement.

     (10) "Buyer subagent" means a broker or salesperson who, pursuant to an offer of a subagency, acts as the agent of a buyer.

     (11) "Department" means the department of commerce provided for in Title 2, chapter 15, part 18.

     (12) "Dual agent" means a broker or salesperson who, pursuant to a written listing agreement or buyer broker agreement or as a buyer or seller subagent, acts as the agent of both the buyer and seller with written authorization as provided in 37-51-314. An in-house buyer or seller agent designate may not be considered a dual agent.

     (13) "Franchise agreement" means a contract or agreement by which:

     (a)  a franchisee is granted the right to engage in business under a marketing plan prescribed in substantial part by the franchisor;

     (b)  the operation of the franchisee's business is substantially associated with the franchisor's trademark, trade name, logotype, or other commercial symbol or advertising designating the franchisor; and

     (c)  the franchisee is required to pay, directly or indirectly, a fee for the right to operate under the agreement.

     (14) "In-house buyer agent designate" means a broker associate or salesperson employed by or associated as an independent contractor independently contracted worker with a broker owner and designated by the broker owner as the exclusive agent for a buyer for a designated transaction and who may not be considered to be acting for other than the buyer with respect to the designated transaction.

     (15) "In-house seller agent designate" means a broker associate or salesperson employed by or associated as an independent contractor independently contracted worker with a broker owner and designated by the broker owner as the exclusive agent for a seller for a designated transaction and who may not be considered to be acting for other than the seller with respect to the designated transaction.

     (16) "Listing agreement" means a written agreement between a seller and broker for the sale of real estate, with the terms and conditions set out in the agreement.

     (17) "Negotiations" means:

     (a)  efforts to act as an intermediary between parties to a real estate transaction;

     (b)  facilitating and participating in contract discussions;

     (c)  completing forms for offers, counteroffers, addendums, and other writings; and

     (d)  presenting offers and counteroffers.

     (18) "Person" includes individuals, partnerships, associations, and corporations, foreign and domestic, except that when referring to a person licensed under this chapter, it means an individual.

     (19) "Property manager" includes a person who for a salary, commission, or compensation of any kind engages in the business of leasing, renting, subleasing, or other transfer of possession of real estate belonging to others without transfer of the title to the property, pursuant to 37-51-601 and 37-51-602.

     (20) "Real estate" includes leaseholds as well as any other interest or estate in land, whether corporeal, incorporeal, freehold, or nonfreehold and whether the real estate is situated in this state or elsewhere.

     (21) "Real estate transaction" means the sale, exchange, or lease or grant of an option for the sale, exchange, or lease of an interest in real estate and includes all communication, interposition, advisement, negotiation, and contract development and closing.

     (22) "Salesperson" includes an individual who for a salary, commission, or compensation of any kind is associated, either directly, indirectly, regularly, or occasionally, with a real estate broker to sell, purchase, or negotiate for the sale, purchase, exchange, or renting of real estate.

     (23) "Seller" means a person who has entered into a listing agreement to sell real estate and includes landlords who have an interest in or are a party to a lease or rental agreement.

     (24) "Seller agent" means a broker or salesperson who, pursuant to a written listing agreement, acts as the agent of a seller and includes a seller subagent and an in-house seller agent designate.

     (25) "Seller subagent" means a broker or salesperson who, pursuant to an offer of a subagency, acts as the agent of a seller.

     (26) (a) "Statutory broker" means a broker or salesperson who assists one or more parties to a real estate transaction without acting as an agent or representative of any party to the real estate transaction.

     (b)  A broker or salesperson is presumed to be acting as a statutory broker unless the broker or salesperson has entered into a listing agreement with a seller or a buyer broker agreement with a buyer or has disclosed, as required in this chapter, a relationship other than that of a statutory broker."

     Section 27.  Section 37-51-313, MCA, is amended to read:

     "37-51-313.  Duties, duration, and termination of relationship between broker or salesperson and buyer or seller. (1) The provisions of this chapter and the duties described in this section govern the relationships between brokers or salespersons and buyers or sellers and are intended to replace the common law as applied to these relationships. The duties of a broker or salesperson vary depending upon the relationship with a party to a real estate transaction and are as provided in this section.

     (2)  A seller's agent is obligated to the seller to:

     (a)  act solely in the best interests of the seller;

     (b)  obey promptly and efficiently all lawful instructions of the seller;

     (c)  disclose all relevant and material information that concerns the real estate transaction and that is known to the seller's agent and not known or discoverable by the seller, unless the information is subject to confidentiality arising from a prior or existing agency relationship on the part of the seller's agent;

     (d)  safeguard the seller's confidences;

     (e)  exercise reasonable care, skill, and diligence in pursuing the seller's objectives and in complying with the terms established in the listing agreement;

     (f)  fully account to the seller for any funds or property of the seller that comes into the seller's agent's possession; and

     (g)  comply with all applicable federal and state laws, rules, and regulations.

     (3)  A seller's agent is obligated to the buyer to:

     (a)  disclose to a buyer or the buyer's agent any adverse material facts that concern the property and that are known to the seller's agent, except that the seller's agent is not required to inspect the property or verify any statements made by the seller;

     (b)  disclose to a buyer or the buyer's agent when the seller's agent has no personal knowledge of the veracity of information regarding adverse material facts that concern the property;

     (c)  act in good faith with a buyer and a buyer's agent; and

     (d)  comply with all applicable federal and state laws, rules, and regulations.

     (4)  A buyer's agent is obligated to the buyer to:

     (a)  act solely in the best interests of the buyer;

     (b)  obey promptly and efficiently all lawful instructions of the buyer;

     (c)  disclose all relevant and material information that concerns the real estate transaction and that is known to the buyer's agent and not known or discoverable by the buyer, unless the information is subject to confidentiality arising from a prior or existing agency relationship on the part of the buyer's agent;

     (d)  safeguard the buyer's confidences;

     (e)  exercise reasonable care, skill, and diligence in pursuing the buyer's objectives and in complying with the terms established in the buyer broker agreement;

     (f)  fully account to the buyer for any funds or property of the buyer that comes into the buyer's agent's possession; and

     (g)  comply with all applicable federal and state laws, rules and regulations.

     (5)  A buyer's agent is obligated to the seller to:

     (a)  disclose any adverse material facts that are known to the buyer's agent and that concern the ability of the buyer to perform on any purchase offer;

     (b)  disclose to the seller or the seller's agent when the buyer's agent has no personal knowledge of the veracity of information regarding adverse material facts that concern the property;

     (c)  act in good faith with a seller and a seller's agent; and

     (d)  comp