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

     (6)  A statutory broker is not the agent of the buyer or seller but nevertheless is obligated to them to:

     (a)  disclose to:

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

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

     (b)  exercise reasonable care, skill, and diligence in putting together a real estate transaction; and

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

     (7)  A dual agent is obligated to a seller in the same manner as a seller's agent and is obligated to a buyer in the same manner as a buyer's agent under this section, except as follows:

     (a)  a dual agent has a duty to disclose to a buyer or seller any adverse material facts that are known to the dual agent, regardless of any confidentiality considerations; and

     (b)  a dual agent may not disclose the following information without the written consent of the person to whom the information is confidential:

     (i)  the fact that the buyer is willing to pay more than the offered purchase price;

     (ii) the fact that the seller is willing to accept less than the purchase price that the seller is asking for the property;

     (iii) factors motivating either party to buy or sell; and

     (iv) any information that a party indicates in writing to the dual agent is to be kept confidential.

     (8)  (a) The agency relationship of a buyer agent, seller agent, or dual agent continues until the earliest of the following dates:

     (i)  completion of performance by the agent;

     (ii) the expiration date agreed to in the listing agreement or buyer broker agreement; or

     (iii) the occurrence of any authorized termination of the listing agreement or buyer broker agreement.

     (b)  A statutory broker's relationship continues until the completion, termination, or abandonment of the real estate transaction giving rise to the relationship.

     (9)  Upon termination of an agency relationship, a broker or salesperson does not have any further duties to the principal, except as follows:

     (a)  to account for all money and property of the principal;

     (b)  to keep confidential all information received during the course of the agency relationship that was made confidential at the principal's direction, except for:

     (i)  subsequent conduct by the principal that authorizes disclosure;

     (ii) disclosure required by law or to prevent the commission of a crime;

     (iii) the information being disclosed by someone other than the broker or salesperson; and

     (iv) the disclosure of the information being reasonably necessary to defend the conduct of the broker or salesperson, including employees, independent contractors independently contracted workers, and subagents.

     (10) Consistent with the licensee's duties as a buyer agent, a seller agent, a dual agent, or a statutory broker, a licensee shall endeavor to ascertain all pertinent facts concerning each property in any transaction in which the licensee acts so that the licensee may fulfill the obligation to avoid error, exaggeration, misrepresentation, or concealment of pertinent facts."

     Section 28.  Section 37-51-315, MCA, is amended to read:

     "37-51-315.  Vicarious liability. (1) A party to a real estate transaction is not liable for a misrepresentation made by the party's agent or subagent unless:

     (a)  the party has actual knowledge of the misrepresentation; or

     (b)  the agent or subagent is repeating a misrepresentation made by the party.

     (2)  A broker is not liable for a misrepresentation made by the broker's broker associate or subagent unless:

     (a)  the broker has actual knowledge of the misrepresentation;

     (b)  a broker associate making the misrepresentation is an employee of the broker and not an independent contractor independently contracted worker or subagent; or

     (c)  a broker associate or subagent is repeating a misrepresentation made by the broker.

     (3)  An agent is not liable for a misrepresentation made by the principal unless the agent has actual knowledge of the misrepresentation."

     Section 29.  Section 39-2-206, MCA, is amended to read:

     "39-2-206.  Definitions. As used in 39-2-205 through 39-2-211, the following definitions apply:

     (1)  "Alcohol" means an intoxicating agent in alcoholic beverages, ethyl alcohol, also called ethanol, or the hydrated oxide of ethyl.

     (2)  "Alcohol concentration" means the alcohol in a volume of breath expressed in terms of grams of alcohol per 210 liters of breath, as indicated by an evidential breath test.

     (3)  "Controlled substance" means a dangerous drug, as defined in 49 CFR, part 40, except a drug used pursuant to a valid prescription or as authorized by law.

     (4)  "Employee" means an individual engaged in the performance, supervision, or management of work in a hazardous work environment, security position, position affecting public safety, or fiduciary position for an employer and does not include an independent contractor independently contracted worker. The term includes an elected official.

     (5)  "Employer" means a person or entity that has one or more employees and that is located in or doing business in Montana.

     (6)  "Hazardous work environment" includes but is not limited to positions:

     (a)  for which controlled substance and alcohol testing is mandated by federal law, such as aviation, commercial motor carrier, railroad, pipeline, and commercial marine employees;

     (b)  that involve the operation of or work in proximity to construction equipment, industrial machinery, or mining activities; or

     (c)  that involve handling or proximity to flammable materials, explosives, toxic chemicals, or similar substances.

     (7)  "Medical review officer" means a licensed physician trained in the field of substance abuse.

     (8)  "Prospective employee" means an individual who has made a written or oral application to an employer to become an employee.

     (9)  "Qualified testing program" means a program to test for the presence of controlled substances and alcohol that meets the criteria set forth in 39-2-207 and 39-2-208.

     (10) "Sample" means a urine specimen to determine the presence of a controlled substance or a breath alcohol test to determine the presence of alcohol."

     Section 30.  Section 39-2-903, MCA, is amended to read:

     "39-2-903.  Definitions. In this part, the following definitions apply:

     (1)  "Constructive discharge" means the voluntary termination of employment by an employee because of a situation created by an act or omission of the employer which an objective, reasonable person would find so intolerable that voluntary termination is the only reasonable alternative. Constructive discharge does not mean voluntary termination because of an employer's refusal to promote the employee or improve wages, responsibilities, or other terms and conditions of employment.

     (2)  "Discharge" includes a constructive discharge as defined in subsection (1) and any other termination of employment, including resignation, elimination of the job, layoff for lack of work, failure to recall or rehire, and any other cutback in the number of employees for a legitimate business reason.

     (3)  "Employee" means a person who works for another for hire. The term does not include a person who is an independent contractor independently contracted worker.

     (4)  "Fringe benefits" means the value of any employer-paid vacation leave, sick leave, medical insurance plan, disability insurance plan, life insurance plan, and pension benefit plan in force on the date of the termination.

     (5)  "Good cause" means reasonable job-related grounds for dismissal based on a failure to satisfactorily perform job duties, disruption of the employer's operation, or other legitimate business reason. The legal use of a lawful product by an individual off the employer's premises during nonworking hours is not a legitimate business reason, unless the employer acts within the provisions of 39-2-313(3) or (4).

     (6)  "Lost wages" means the gross amount of wages that would have been reported to the internal revenue service as gross income on Form W-2 and includes additional compensation deferred at the option of the employee.

     (7)  "Public policy" means a policy in effect at the time of the discharge concerning the public health, safety, or welfare established by constitutional provision, statute, or administrative rule."

     Section 31.  Section 39-8-102, MCA, is amended to read:

     "39-8-102.  Definitions. As used in this chapter, unless the context indicates otherwise, the following definitions apply:

     (1)  "Applicant" means a person that seeks to be licensed under this chapter.

     (2)  "Client" means a person who obtains all or part of its workforce from another person through a professional employer arrangement.

     (3)  "Controlling person" means an individual who possesses the right to direct the management or policies of a professional employer organization or group through ownership of voting securities, by contract or otherwise.

     (4)  "Department" means the department of labor and industry.

     (5)  "Employee leasing arrangement" means an arrangement by contract or otherwise under which a professional employer organization hires its own employees and assigns the employees to work for another person to staff and manage, or to assist in staffing and managing, a facility, function, project, or enterprise on an ongoing basis.

     (6)  "Licensee" means a person licensed as a professional employer organization or group under this chapter.

     (7)  "Person" means an individual, association, company, firm, partnership, corporation, or limited liability company.

     (8)  (a) "Professional employer arrangement" means an arrangement by contract or otherwise under which:

     (i)  a professional employer organization or group assigns employees to perform services for a client;

     (ii) the arrangement is or is intended to be ongoing rather than temporary in nature; and

     (iii) the employer responsibilities are shared by the professional employer organization or group and the client.

     (b)  The term does not include:

     (i)  services performed by a temporary service contractor;

     (ii) arrangements under which a person shares employees with a commonly owned company within the meaning of section 414(b) and (c) of the Internal Revenue Code of 1986, as amended, if:

     (A)  that person's principal business activity is not entering into professional employer arrangements; and

     (B)  that person does not represent to the public that the person is a professional employer organization or group; and

     (iii) arrangements exist for employment of an independent contractor independently contracted worker as defined in 39-71-120.

     (9)  "Professional employer group" or "group" means at least two but not more than five professional employer organizations, each of which is majority-owned by the same person.

     (10) "Professional employer organization" means:

     (a)  a person that provides services of employees pursuant to one or more professional employer arrangements or to one or more employee leasing arrangements; or

     (b)  a person that represents to the public that the person provides services pursuant to a professional employer arrangement.

     (11) "Temporary service contractor" means a person conducting a business that hires its own employees and assigns them to clients to fulfill a work assignment with a finite ending date to support or supplement the client's workforce in situations resulting from employee absences, skill shortages, seasonal workloads, and special assignments and projects."

     Section 32.  Section 39-9-206, MCA, is amended to read:

     "39-9-206.  Fees -- education program. (1) The department shall charge fees for:

     (a)  issuance, renewal, and reinstatement of certificates of registration; and

     (b)  changes of name, address, or business structure.

     (2)  The department shall set the fees by administrative rule. The fees shall cover the full cost of issuing certificates, filing papers and notices, and administering and enforcing this chapter. The costs include reproduction, travel, per diem, and administrative and legal support costs.

     (3)  The fees charged in subsection (1)(a) may not exceed:

     (a)  $70 for the initial registration certificate; or

     (b)  $70 for the renewal or reinstatement of a registration certificate.

     (4)  The fees collected under this section must be deposited in the state special revenue account to the credit of the department for the administration and enforcement of this chapter.

     (5)  The department shall establish, cooperatively with representatives of the building industry, an industry and consumer information program, funded with 15% of the fees, to educate the building industry about the registration program and to educate the public regarding the hiring of building construction contractors.

     (6)  The fee for a joint application for a certificate of registration and an independent contractor independently contracted worker exemption may not exceed the fee charged for a certificate of registration."

     Section 33.  Section 39-9-211, MCA, is amended to read:

     "39-9-211.  Exemptions. This chapter does not apply:

     (1)  to an authorized representative of the United States government, the state of Montana, or any incorporated municipality, county, alternative form of local government, irrigation district, reclamation district, or other municipal or political corporation or subdivision of this state;

     (2)  to an officer of a court acting within the scope of office;

     (3)  to a public utility operating under the regulations of the public service commission or to a rural cooperative utility operating under Title 35, chapter 18, in construction, maintenance, or development work incidental to its own business;

     (4)  to the repair or operation incidental to the discovery or production of oil or gas or incidental to the drilling, testing, abandoning, or other operation of an oil or gas well or a surface or underground mine or mineral deposit;

     (5)  to the sale or installation of finished products, materials, or articles of merchandise that are not actually fabricated into and do not become a permanent fixed part of a structure;

     (6)  to the construction, alteration, improvement, or repair carried on within the limits and boundaries of a site or reservation under the exclusive legal jurisdiction of the federal government;

     (7)  to a person who only furnished materials, supplies, or equipment without fabricating them into or consuming them in the performance of the work of the construction contractor;

     (8)  to work or operation on one undertaking or project considered of a casual, minor, or inconsequential nature, by one or more contracts, the aggregate contract price of which, for labor and materials and all other items, is less than $2,500 a job. The exemption prescribed in this subsection does not apply when the work or construction is only a part of a larger or major operation, whether undertaken by the same or a different construction contractor, or in which a division of the operation is made into contracts of amounts of less than $2,500 a job for the purpose of evasion of this chapter or otherwise.

     (9)  to a farmer or rancher while engaged in a farming, dairying, agriculture, viticulture, horticulture, or stock or poultry operation;

     (10) to an irrigation district or reclamation district;

     (11) to an operation related to clearing or other work upon land in rural districts for fire prevention purposes;

     (12) to an owner who contracts for work to be performed by a registered construction contractor, but this exemption does not apply to an owner who is otherwise covered by this chapter who constructs a residence on the owner's property with the intention and for the purpose of promptly selling the improved property;

     (13) to an owner working on the owner's property, whether occupied by the owner or not, but this exemption does not apply to an owner who is otherwise covered by this chapter who constructs an improvement on the owner's property with the intention and for the purpose of promptly selling the improved property, unless the owner has continuously occupied the property as the owner's primary residence for at least the last 12 months;

     (14) to owners of commercial properties who use their own employees to do maintenance, repair, and alteration work in or upon their own properties;

     (15) to an architect, civil or professional engineer, or professional land surveyor, licensed in Montana and acting solely in a professional capacity;

     (16) to an electrician or plumber, licensed in Montana, operating within the scope of the license;

     (17) to a contract security company, licensed under Title 37, chapter 60, operating within the scope of the license;

     (18) to a person who engages in the activities regulated as an employee of a registered construction contractor with wages as the sole compensation or as an employee with wages as the sole compensation;

     (19) to a person or entity licensed under Title 50, chapter 39, to sell, install, or service fire suppression or fire protection equipment;

     (20) to a water well contractor licensed under Title 37, chapter 43, performing the work of a water well contractor;

     (21) to an enrolled tribal member or an association, business, corporation, or other entity, at least 51% of which is owned by an enrolled tribal member or members and whose business is conducted solely within the exterior boundaries of an Indian reservation;

     (22) to a contractor engaged in the logging industry who builds forest access roads for the purpose of harvesting and transporting logs from forest to mill;

     (23) to a person working on the person's own residence, if the residence is owned by a person other than the resident; or

     (24) to an independent contractor independently contracted worker who has no employees. However, an independent contractor independently contracted worker may voluntarily elect to register under this chapter."

     Section 34.  Section 39-29-101, MCA, is amended to read:

     "39-29-101.  Definitions. For the purposes of this chapter, the following definitions apply:

     (1)  "Active duty" means full-time duty with military pay and allowances in the armed forces, except for training, determining physical fitness, or service in the reserve or national guard.

     (2)  "Armed forces" means the United States:

     (a)  army, navy, air force, marine corps, and coast guard; and

     (b)  merchant marine for service recognized by the United States department of defense as active military service for the purpose of laws administered by the department of veterans affairs.

     (3)  "Disabled veteran" means a person:

     (a)  whether or not the person is a veteran as defined in this section, who was separated under honorable conditions from active duty in the armed forces and has established the present existence of a service-connected disability or is receiving compensation, disability retirement benefits, or pension because of a law administered by the department of veterans affairs or a military department; or

     (b)  who has received a purple heart medal.

     (4)  "Eligible relative" means:

     (a)  the unmarried surviving spouse of a veteran or disabled veteran;

     (b)  the spouse of a disabled veteran who is unable to qualify for appointment to a position;

     (c)  the mother of a veteran who died under honorable conditions while serving in the armed forces if:

     (i)  the mother's spouse is totally and permanently disabled; or

     (ii) the mother is the widow of the father of the veteran and has not remarried;

     (d)  the mother of a service-connected permanently and totally disabled veteran if:

     (i)  the mother's spouse is totally and permanently disabled; or

     (ii) the mother is the widow of the father of the veteran and has not remarried.

     (5)  "Position" means a position occupied by a permanent, temporary, or seasonal employee as defined in 2-18-101 for the state or a similar permanent, temporary, or seasonal employee with a public employer other than the state. The term does not include:

     (a)  a state or local elected office;

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

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

     (d)  a department head appointment by the governor or an executive department head appointment by a mayor, city manager, county commissioner, or other chief administrative or executive officer of a local government; or

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

     (6)  "Public employer" means:

     (a)  a department, office, board, bureau, commission, agency, or other instrumentality of the executive, legislative, or judicial branches of the government of this state;

     (b)  a unit of the Montana university system;

     (c)  a school district or community college; and

     (d)  a county, city, or town.

     (7)  "Scored procedure" means a written test, structured oral interview, performance test, or other selection procedure or a combination of these procedures that results in a numerical score to which percentage points may be added.

     (8)  "Under honorable conditions" means a discharge or separation from active duty characterized by the armed forces as under honorable conditions. The term includes honorable discharges and general discharges but does not include dishonorable discharges or other administrative discharges characterized as other than honorable.

     (9)  "Veteran" means a person who:

     (a)  was separated under honorable conditions from active duty in the armed forces after having served more than 180 consecutive days, other than for training; or

     (b)  as a member of a reserve component under an order of active duty pursuant to 10 U.S.C. 12301(a), (d), or (g), 10 U.S.C. 12302, or 10 U.S.C. 12304 served on active duty during a period of war or in a campaign or expedition for which a campaign badge is authorized and was discharged or released from duty under honorable conditions."

     Section 35.  Section 39-30-103, MCA, is amended to read:

     "39-30-103.  Definitions. For the purposes of this chapter, the following definitions apply:

     (1)  "Eligible spouse" means the spouse of a person with a disability determined by the department of public health and human services to have a 100% disability and who is unable to use the employment preference because of the person's disability.

     (2)  (a) "Initial hiring" means a personnel action for which applications are solicited from outside the ranks of the current employees of:

     (i)  a department, as defined in 2-15-102, for a position within the executive branch;

     (ii) a legislative agency for a position within the legislative branch;

     (iii) a judicial agency, such as the office of supreme court administrator, office of supreme court clerk, state law library, or similar office in a state district court for a position within the judicial branch;

     (iv) a city or town for a municipal position, including a city or municipal court position; and

     (v)  a county for a county position, including a justice's court position.

     (b)  A personnel action limited to current employees of a specific public entity identified in this subsection (2), current employees in a reduction-in-force pool who have been laid off from a specific public entity identified in this subsection (2), or current participants in a federally authorized employment program is not an initial hiring.

     (3)  (a) "Mental impairment" means:

     (i)  a disability attributable to mental retardation, cerebral palsy, epilepsy, autism, or any other neurologically disabling condition closely related to mental retardation and requiring treatment similar to that required by mentally retarded individuals; or

     (ii) an organic or mental impairment that has substantial adverse effects on an individual's cognitive or volitional functions.

     (b)  The term mental impairment does not include alcoholism or drug addiction and does not include any mental impairment, disease, or defect that has been asserted by the individual claiming the preference as a defense to any criminal charge.

     (4)  "Person with a disability" means an individual certified by the department of public health and human services to have a physical or mental impairment that substantially limits one or more major life activities, such as writing, seeing, hearing, speaking, or mobility, and that limits the individual's ability to obtain, retain, or advance in employment.

     (5)  "Position" means a position occupied by a permanent or seasonal employee as defined in 2-18-101 for the state or a position occupied by a similar permanent or seasonal employee with a public employer other than the state. However, the term does not include:

     (a)  a position occupied by a temporary employee as defined in 2-18-101 for the state or a similar temporary employee with a public employer other than the state;

     (b)  a state or local elected official;

     (c)  employment as an elected official's immediate secretary, legal adviser, court reporter, or administrative, legislative, or other immediate or first-line aide;

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

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

     (f)  a department head appointment by the governor or an executive department head appointment by a mayor, city manager, county commissioner, or other chief administrative or executive officer of a local government; or

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

     (6)  (a) "Public employer" means:

     (i)  any department, office, board, bureau, commission, agency, or other instrumentality of the executive, judicial, or legislative branch of the government of the state of Montana; and

     (ii) any county, city, or town.

     (b)  The term does not include a school district, a vocational-technical program, a community college, the board of regents of higher education, the Montana university system, a special purpose district, an authority, or any political subdivision of the state other than a county, city, or town.

     (7)  "Substantially equal qualifications" means the qualifications of two or more persons among whom the public employer cannot make a reasonable determination that the qualifications held by one person are significantly better suited for the position than the qualifications held by the other persons."

     Section 36.  Section 39-51-201, MCA, is amended to read:

     "39-51-201.  General definitions. As used in this chapter, unless the context clearly requires otherwise, the following definitions apply:

     (1)  "Annual payroll" means the total amount of wages paid by an employer, regardless of the time of payment, for employment during a calendar year.

     (2)  "Base period" means the first 4 of the last 5 completed calendar quarters immediately preceding the first day of an individual's benefit year. However, in the case of a combined-wage claim pursuant to the arrangement approved by the secretary of labor of the United States, the base period is the period applicable under the unemployment law of the paying state. For an individual who fails to meet the qualifications of 39-51-2105 or a similar statute of another state because of a temporary total disability, as defined in 39-71-116, or a similar statute of another state or the United States, the base period means the first 4 quarters of the last 5 completed calendar quarters preceding the disability if a claim for unemployment benefits is filed within 24 months of the date on which the individual's disability was incurred.

     (3)  "Benefit year", with respect to any individual, means the 52-consecutive-week period beginning with the first day of the calendar week in which the individual files a valid claim for benefits, except that the benefit year is 53 weeks if filing a new valid claim would result in overlapping any quarter of the base year of a previously filed new claim. A subsequent benefit year may not be established until the expiration of the current benefit year. However, in the case of a combined-wage claim pursuant to the arrangement approved by the secretary of labor of the United States, the base period is the period applicable under the unemployment law of the paying state.

     (4)  "Benefits" means the money payments payable to an individual, as provided in this chapter, with respect to the individual's unemployment.

     (5)  "Board" means the board of labor appeals provided for in Title 2, chapter 15, part 17.

     (6)  "Calendar quarter" means the period of 3 consecutive calendar months ending on March 31, June 30, September 30, or December 31.

     (7)  "Contributions" means the money payments to the state unemployment insurance fund required by this chapter but does not include assessments under 39-51-404(4).

     (8)  "Department" means the department of labor and industry provided for in Title 2, chapter 15, part 17.

     (9)  "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.

     (10) "Employing unit" means any individual or organization (including the state government and any of its political subdivisions or instrumentalities), partnership, association, trust, estate, joint-stock company, insurance company, limited liability company or limited liability partnership that has filed with the secretary of state, or corporation, whether domestic or foreign, or the receiver, trustee in bankruptcy, trustee or the trustee's successor, or legal representative of a deceased person that has or had in its employ one or more individuals performing services for it within this state, except as provided under 39-51-204(1)(a) and (1)(q). All individuals performing services within this state for any employing unit that maintains two or more separate establishments within this state are considered to be employed by a single employing unit for all the purposes of this chapter. Each individual employed to perform or assist in performing the work of any agent or employee of an employing unit is considered to be employed by the employing unit for the purposes of this chapter, whether the individual was hired or paid directly by the employing unit or by the agent or employee, provided that the employing unit has actual or constructive knowledge of the work.

     (11) "Employment office" means a free public employment office or branch of an office operated by this state or maintained as a part of a state-controlled system of public employment offices or other free public employment offices operated and maintained by the United States government or its instrumentalities as the department may approve.

     (12) "Fund" means the unemployment insurance fund established by this chapter to which all contributions and payments in lieu of contributions are required to be paid and from which all benefits provided under this chapter must be paid.

     (13) "Gross misconduct" means a criminal act, other than a violation of a motor vehicle traffic law, for which an individual has been convicted in a criminal court or has admitted or conduct that demonstrates a flagrant and wanton disregard of and for the rights or title or interest of a fellow employee or the employer.

     (14) "Hospital" means an institution that has been licensed, certified, or approved by the state as a hospital.

     (15) "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 a contract and in fact; and

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

     (16) (a) "Institution of higher education", for the purposes of this part, means an educational institution that:

     (i)  admits as regular students only individuals having a certificate of graduation from a high school or the recognized equivalent of a certificate;

     (ii) is legally authorized in this state to provide a program of education beyond high school;

     (iii) provides an educational program for which it awards a bachelor's or higher degree or provides a program that is acceptable for full credit toward a bachelor's or higher degree, a program of postgraduate or postdoctoral studies, or a program of training to prepare students for gainful employment in a recognized occupation; and

     (iv) is a public or other nonprofit institution.

     (b)  Notwithstanding subsection (16)(a), all universities in this state are institutions of higher education for purposes of this part.

     (17) "State" includes, in addition to the states of the United States of America, the District of Columbia, Puerto Rico, the Virgin Islands, and Canada.

     (18) "Taxes" means contributions and assessments required under this chapter but does not include penalties or interest for past-due or unpaid contributions or assessments.

     (19) "Unemployment insurance administration fund" means the unemployment insurance administration fund established by this chapter from which administrative expenses under this chapter must be paid.

     (20) (a) "Wages", unless specifically exempted under subsection (20)(b), means all remuneration payable for personal services, including the cash value of all remuneration paid in any medium other than cash. The reasonable cash value of remuneration payable in any medium other than cash must be estimated and determined pursuant to rules prescribed by the department. The term includes but is not limited to:

     (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) 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; or

     (ii)  employee expense reimbursements or allowances for meals, lodging, travel, subsistence, or other expenses, as set forth in department rules.

     (21) "Week" means a period of 7 consecutive calendar days ending at midnight on Saturday.

     (22) An individual's "weekly benefit amount" means the amount of benefits that the individual would be entitled to receive for 1 week of total unemployment."

     Section 37.  Section 39-51-203, MCA, is amended to read:

     "39-51-203.  Employment defined. (1) "Employment", subject to other provisions of this section, means service by an individual, by a manager or member of a manager-managed limited liability company that has filed with the secretary of state, or by an officer of a corporation, including service in interstate commerce, performed for wages or under any contract of hire, written or oral, express or implied.

     (2)  (a) The term "employment" includes an individual's entire service performed within or both within and outside this state if:

     (i)  the service is localized in this state; or

     (ii) the service is not localized in any state but some of the service is performed in this state and:

     (A)  the base of operations or, if there is no base of operations, the place from which the service is directed or controlled is in this state; or

     (B)  the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual's residence is in this state.

     (b)  Service is considered to be localized within a state if:

     (i)  the service is performed entirely within the state; or

     (ii) the service is performed both within and outside the state, but the service performed outside the state is incidental to the individual's service within the state; for example, the out-of-state service is temporary or transitory in nature or consists of isolated transactions.

     (3)  Service not covered under subsection (2) and performed entirely outside the state and on which contributions are neither required nor paid under an unemployment insurance law of any other state or of the federal government is considered to be employment subject to this chapter if the individual performing the services is a resident of this state and the department approves the election of the employing unit for whom the services are performed in order that the entire service of the individual is considered to be employment subject to this chapter.

     (4)  Service performed by an individual for wages is considered to be employment subject to this chapter until it is shown to the satisfaction of the department that the individual is an independent contractor independently contracted worker.

     (5)  The term "employment" includes service performed by an individual in the employ of this state or any of its instrumentalities (or in the employ of this state and one or more other states or their instrumentalities) for a hospital or institution of higher education located in this state. The term "employment" includes service performed by all individuals, including those individuals who work for the state of Montana, its universities, public schools, components or units of universities or public schools, or any local government unit and one or more other states or their instrumentalities or political subdivisions whose services are compensated by salary or wages.

     (6)  The term "employment" includes service performed by an individual in the employ of a religious, charitable, scientific, literary, or educational organization.

     (7)  (a) The term "employment" includes the service of an individual who is a citizen of the United States performed outside the United States, except in Canada, in the employ of an American employer, other than service that is considered employment under the provisions of subsection (2) or the parallel provisions of another state's law, if:

     (i)  the employer's principal place of business in the United States is located in this state;

     (ii) the employer has no place of business in the United States, but:

     (A)  the employer is an individual who is a resident of this state;

     (B)  the employer is a corporation that is organized under the laws of this state; or

     (C)  the employer is a partnership or a trust and the number of the partners or trustees who are residents of this state is greater than the number who are residents of any other state; or

     (iii) none of the criteria of subsections (7)(a)(i) and (7)(a)(ii) are met, but the employer has elected coverage in this state or, the employer having failed to elect coverage in any state, the individual has filed a claim for benefits based on the service under the law of this state.

     (b)  An "American employer", for purposes of this subsection (7), means a person who is:

     (i)  an individual who is a resident of the United States;

     (ii) a partnership if two-thirds or more of the partners are residents of the United States;

     (iii) a trust if all of the trustees are residents of the United States; or

     (iv) a corporation organized under the laws of the United States or of any state."

     Section 38.  Section 39-51-204, MCA, is amended to read:

     "39-51-204.  Exclusions from definition of employment. (1) The term "employment" does not include:

     (a)  domestic or household service in a private home, local college club, or local chapter of a college fraternity or sorority, except as provided in 39-51-202(3). If an employer is otherwise subject to this chapter and has domestic or household service employment, all employees engaged in domestic or household service must be excluded from coverage under this chapter if the employer:

     (i)  does not meet the monetary payment test in any quarter or calendar year, as applicable, for the subject wages attributable to domestic or household service; and

     (ii)  keeps separate books and records to account for the employment of persons in domestic or household service.

     (b)  service performed by a dependent member of a sole proprietor for whom an exemption may be claimed under 26 U.S.C. 152 or service performed by a sole proprietor's spouse for whom an exemption based on marital status may be claimed by the sole proprietor under 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 acknowledged in writing that the person performing the service and the service are not covered. 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 real estate broker or salesperson who is licensed pursuant to 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 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, members of a member-managed limited liability company that has filed with the secretary of state, or partners in a limited liability partnership that has filed 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 as 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 services 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 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 for a state prison or other state correctional or custodial institution by an inmate of that institution;

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

     (p)  service performed by elected public officials;

     (q)  agricultural labor, except as provided in 39-51-202(2). If an employer is otherwise subject to this chapter and has agricultural employment, all employees engaged in agricultural labor must be excluded from coverage under this chapter if the employer:

     (i)  in any quarter or calendar year, as applicable, does not meet either of the tests relating to the monetary amount or number of employees and days worked for the subject wages attributable to agricultural labor; and

     (ii) keeps separate books and records to account for the employment of persons in agricultural labor.

     (r)  service performed in the employ of any other state or its political subdivisions or of the United States government or of an instrumentality of any other state or states or their political subdivisions or of the United States, except that national banks organized under the national banking law are not entitled to exemption under this subsection and are subject to this chapter the same as state banks, if the service is excluded from employment as defined in section 3306(c)(7) of the Federal Unemployment Tax Act;

     (s)  service in which unemployment insurance is payable under an unemployment insurance system established by an act of congress if the department enters into agreements with the proper agencies under an act of congress and those agreements become effective in the manner prescribed in the Montana Administrative Procedure Act for the adoption of rules, to provide reciprocal treatment to individuals who have, after acquiring potential rights to benefits under this chapter, acquired rights to unemployment insurance under an act of congress or who have, after acquiring potential rights to unemployment insurance under the act of congress, acquired rights to benefits under this chapter;

     (t)  service performed in the employ of a school or university if the service is performed by a student who is enrolled and is regularly attending classes at a school or university or by the spouse of a student if the spouse is advised, at the time that the spouse commences to perform the service, that the employment of the spouse to perform the service is provided under a program to provide financial assistance to the student by the school or university and that the employment is not covered by any program of unemployment insurance;

     (u)  service performed by an individual who is enrolled at a nonprofit or public educational institution that normally maintains a regular faculty and curriculum and normally has a regularly organized body of students in attendance at the place where its educational activities are carried on, as a student in a full-time program taken for credit at an institution that combines academic instruction with work experience if the service is an integral part of the program and the institution has certified that fact to the employer, except that this subsection (1)(u) does not apply to service performed in a program established for or on behalf of an employer or group of employers;

     (v)  service performed as an officer or member of the crew of a vessel on the navigable waters of the United States; or

     (w)  service performed by an alien admitted to the United States to perform agricultural labor pursuant to sections 214(c) and 1101(a)(H)(ii)(a) of the Immigration and Nationality Act.

     (2)  An individual found to be an independent contractor independently contracted worker by the department under the terms of 39-71-401(3) is considered an independent contractor independently contracted worker for the purposes of this chapter. An independent contractor independently contracted worker is not precluded from filing a claim for benefits and receiving a determination pursuant to 39-51-2402.

     (3)  This section does not apply to a state or local governmental entity or a nonprofit organization defined under section 501(c)(3) of the Internal Revenue Code unless the service is excluded from employment as defined in the Federal Unemployment Tax Act."

     Section 39.  Section 39-51-310, MCA, is amended to read:

     "39-51-310.  Function of board. The board shall act in a quasi-judicial capacity for the hearing of disputes concerning the administration of Montana's unemployment insurance laws and disputes arising under Title 39, chapter 71, not concerning benefits, regarding whether an individual is an employee or an independent contractor independently contracted worker as defined in that chapter."

     Section 40.  Section 39-51-604, MCA, is amended to read:

     "39-51-604.  Exemption. An exemption granted under 39-71-401(3) by the department that a particular employee is an independent contractor independently contracted worker or that a particular employment is exempt from the provisions of this chapter must be reported to the state compensation insurance fund."

     Section 41.  Section 39-71-117, MCA, is amended to read:

     "39-71-117.  Employer defined. (1) "Employer" means:

     (a)  the state and each county, city and county, city school district, and irrigation district; all other districts established by law; all public corporations and quasi-public corporations and public agencies; each person; each prime contractor; each firm, voluntary association, limited liability company, limited liability partnership, and private corporation, including any public service corporation and including an independent contractor independently contracted worker who has a person in service under an appointment or contract of hire, expressed or implied, oral or written; and the legal representative of any deceased employer or the receiver or trustee of the deceased employer;

     (b)  any association, corporation, limited liability company, limited liability partnership, or organization that seeks permission and meets the requirements set by the department by rule for a group of individual employers to operate as self-insured under plan No. 1 of this chapter; and

     (c)  any nonprofit association, limited liability company, limited liability partnership, or corporation or other entity funded in whole or in part by federal, state, or local government funds that places community service participants, as described in 39-71-118(1)(e), with nonprofit organizations or associations or federal, state, or local government entities.

     (2)  A temporary service contractor is the employer of a temporary worker for premium and loss experience purposes.

     (3)  Except as provided in chapter 8 of this title, an employer defined in subsection (1) who uses the services of a worker furnished by another person, association, contractor, firm, limited liability company, limited liability partnership, or corporation, other than a temporary service contractor, is presumed to be the employer for workers' compensation premium and loss experience purposes for work performed by the worker. The presumption may be rebutted by substantial credible evidence of the following:

     (a)  the person, association, contractor, firm, limited liability company, limited liability partnership, or corporation, other than a temporary service contractor, furnishing the services of a worker to another retains control over all aspects of the work performed by the worker, both at the inception of employment and during all phases of the work; and

     (b)  the person, association, contractor, firm, limited liability company, limited liability partnership, or corporation, other than a temporary service contractor, furnishing the services of a worker to another has obtained workers' compensation insurance for the worker in Montana both at the inception of employment and during all phases of the work performed.

     (4)  An interstate or intrastate common or contract motor carrier doing business in this state who uses drivers in this state is considered the employer, is liable for workers' compensation premiums, and is subject to loss experience rating in this state unless:

     (a)  the driver in this state is certified as an independent contractor independently contracted worker as provided in 39-71-401(3); or

     (b)  the person, association, contractor, firm, limited liability company, limited liability partnership, or corporation furnishing drivers in this state to a motor carrier has obtained workers' compensation insurance on the drivers in Montana both at the inception of employment and during all phases of the work performed."

     Section 42.  Section 39-71-118, MCA, is amended to read:

     "39-71-118.  Employee, worker, volunteer, and volunteer firefighter defined. (1) The term "employee" or "worker" means:

     (a)  each person in this state, including a contractor other than an independent contractor independently contracted worker, who is in the service of an employer, as defined by 39-71-117, under any appointment or contract of hire, expressed or implied, oral or written. The terms include aliens and minors, whether lawfully or unlawfully employed, and all of the elected and appointed paid public officers and officers and members of boards of directors of quasi-public or private corporations, except those officers identified in 39-71-401(2), while rendering actual service for the corporations for pay. Casual employees, as defined by 39-71-116, are included as employees if they are not otherwise covered by workers' compensation and if an employer has elected to be bound by the provisions of the compensation law for these casual employments, as provided in 39-71-401(2). Household or domestic employment is excluded.

     (b)  any juvenile who is performing work under authorization of a district court judge in a delinquency prevention or rehabilitation program;

     (c)  a person who is receiving on-the-job vocational rehabilitation training or other on-the-job training under a state or federal vocational training program, whether or not under an appointment or contract of hire with an employer, as defined in this chapter, and, except as provided in subsection (9), whether or not receiving payment from a third party. However, this subsection does not apply to students enrolled in vocational training programs, as outlined in this subsection, while they are on the premises of a public school or community college.

     (d)  an aircrew member or other person who is employed as a volunteer under 67-2-105;

     (e)  a person, other than a juvenile as defined in subsection (1)(b), who is performing community service for a nonprofit organization or association or for a federal, state, or local government entity under a court order, or an order from a hearings officer as a result of a probation or parole violation, whether or not under appointment or contract of hire with an employer, as defined in this chapter, and whether or not receiving payment from a third party. For a person covered by the definition in this subsection (1)(e):

     (i)  compensation benefits must be limited to medical expenses pursuant to 39-71-704 and an impairment award pursuant to 39-71-703 that is based upon the minimum wage established under Title 39, chapter 3, part 4, for a full-time employee at the time of the injury; and

     (ii)  premiums must be paid by the employer, as defined in 39-71-117(3), and must be based upon the minimum wage established under Title 39, chapter 3, part 4, for the number of hours of community service required under the order from the court or hearings officer.

     (f)  an inmate working in a federally certified prison industries program authorized under 53-1-301;

     (g)  a person who is an enrolled member of a volunteer fire department, as described in 7-33-4109, or a person who provides ambulance services under Title 7, chapter 34, part 1; and

     (h)  a person placed at the employer's worksite as a participant in a public assistance program authorized by Title 53, chapter 4, parts 6 and 7, for workers' compensation purposes only. A person placed at an employer's worksite under Title 53, chapter 4, parts 6 and 7, may not be considered an independent contractor independently contracted worker under 39-71-120. An employer may be reimbursed for the premium cost as provided in 53-4-603.

     (2)  The terms defined in subsection (1) do not include a person who is:

     (a)  participating in recreational activity and who at the time is relieved of and is not performing prescribed duties, regardless of whether the person is using, by discount or otherwise, a pass, ticket, permit, device, or other emolument of employment;

     (b)  performing voluntary service at a recreational facility and who receives no compensation for those services other than meals, lodging, or the use of the recreational facilities;

     (c)  performing services as a volunteer, except for a person who is otherwise entitled to coverage under the laws of this state. As used in this subsection (2)(c), "volunteer" means a person who performs services on behalf of an employer, as defined in 39-71-117, but who does not receive wages as defined in 39-71-123.

     (d)  serving as a foster parent, licensed as a foster care provider in accordance with 41-3-1141, and providing care without wage compensation to no more than six foster children in the provider's own residence. The person may receive reimbursement for providing room and board, obtaining training, respite care, leisure and recreational activities, and providing for other needs and activities arising in the provision of in-home foster care.

     (3)  With the approval of the insurer, an employer may elect to include as an employee under the provisions of this chapter any volunteer as defined in subsection (2)(c).

     (4)  (a) The term "volunteer firefighter" means a firefighter who is an enrolled and active member of a fire company organized and funded by a county, a rural fire district, or a fire service area.

     (b)  The term "volunteer hours" means all the time spent by a volunteer firefighter in the service of an employer, including but not limited to training time, response time, and time spent at the employer's premises.

     (5)  (a)  If the employer is a partnership, limited liability partnership, sole proprietor, or a member-managed limited liability company, the employer may elect to include as an employee within the provisions of this chapter any member of the partnership or limited liability partnership, the owner of the sole proprietorship, or any member of the limited liability company devoting full time to the partnership, limited liability partnership, proprietorship, or limited liability company business.

     (b)  In the event of an election, the employer shall serve upon the employer's insurer written notice naming the partners, sole proprietor, or members to be covered and stating the level of compensation coverage desired by electing the amount of wages to be reported, subject to the limitations in subsection (5)(d). A partner, sole proprietor, or member is not considered an employee within this chapter until notice has been given.

     (c)  A change in elected wages must be in writing and is effective at the start of the next quarter following notification.

     (d)  All weekly compensation benefits must be based on the amount of elected wages, subject to the minimum and maximum limitations of this subsection. For premium ratemaking and for the determination of weekly wage for weekly compensation benefits, the electing employer may elect not less than $900 a month and not more than 1 1/2 times the average weekly wage, as defined in this chapter.

     (6)  (a) If the employer is a quasi-public or a private corporation or a manager-managed limited liability company, the employer may elect to include as an employee within the provisions of this chapter any corporate officer or manager exempted under 39-71-401(2).

     (b)  In the event of an election, the employer shall serve upon the employer's insurer written notice naming the corporate officer or manager to be covered and stating the level of compensation coverage desired by electing the amount of wages to be reported, subject to the limitations in subsection (5)(d). A corporate officer or manager is not considered an employee within this chapter until notice has been given.

     (c)  A change in elected wages must be in writing and is effective at the start of the next quarter following notification.

     (d)  All weekly compensation benefits must be based on the amount of elected wages, subject to the minimum and maximum limitations of this subsection. For premium ratemaking and for the determination of the weekly wage for weekly compensation benefits, the electing employer may elect not less than $200 a week and not more than 1 1/2 times the average weekly wage, as defined in this chapter.

     (7)  (a) The trustees of a rural fire district, a county governing body providing rural fire protection, or the county commissioners or trustees for a fire service area may elect to include as an employee within the provisions of this chapter any volunteer firefighter. A volunteer firefighter who receives workers' compensation coverage under this section may not receive disability benefits under Title 19, chapter 17.

     (b)  In the event of an election, the employer shall report payroll for all volunteer firefighters for premium and weekly benefit purposes based on the number of volunteer hours of each firefighter times the average weekly wage divided by 40 hours, subject to a maximum of 1 1/2 times the average weekly wage.

     (8)  Except as provided in chapter 8 of this title, an employee or worker in this state whose services are furnished by a person, association, contractor, firm, limited liability company, limited liability partnership, or corporation, other than a temporary service contractor, to an employer, as defined in 39-71-117, is presumed to be under the control and employment of the employer. This presumption may be rebutted as provided in 39-71-117(3).

     (9)  A student currently enrolled in an elementary, secondary, or postsecondary educational institution who is participating in work-based learning activities and who is paid wages by the educational institution or business partner is the employee of the entity that pays the student's wages for all purposes under this chapter. A student who is not paid wages by the business partner or the educational institution is a volunteer and is subject to the provisions of this chapter.

     (10)  For purposes of this section, an "employee or worker in this state" means:

     (a)  a resident of Montana who is employed by an employer and whose employment duties are primarily carried out or controlled within this state;

     (b)  a nonresident of Montana whose principal employment duties are conducted within this state on a regular basis for an employer;

     (c)  a nonresident employee of an employer from another state engaged in the construction industry, as defined in 39-71-116, within this state; or

     (d)  a nonresident of Montana who does not meet the requirements of subsection (10)(b) and whose employer elects coverage with an insurer that allows an election for an employer whose:

     (i)  nonresident employees are hired in Montana;

     (ii)  nonresident employees' wages are paid in Montana;

     (iii)  nonresident employees are supervised in Montana; and

     (iv)  business records are maintained in Montana.

     (11) An insurer may require coverage for all nonresident employees of a Montana employer who do not meet the requirements of subsection (10)(b) or (10)(d) as a condition of approving the election under subsection (10)(d)."

     Section 43.  Section 39-71-120, MCA, is amended to read:

     "39-71-120.  Independent contractor Independently contracted worker defined. (1) An "independent contractor" "independently contracted worker" is one 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 the contract and in fact; and

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

     (2)  An individual performing services for remuneration is considered to be an employee under this chapter unless the requirements of subsection (1) are met."

     Section 44.  Section 39-71-401, MCA, is amended to read:

     "39-71-401.  Employments covered and employments exempted. (1) Except as provided in subsection (2), the Workers' Compensation Act applies to all employers, as defined in 39-71-117, and to all employees, as defined in 39-71-118. An employer who has any employee in service under any appointment or contract of hire, expressed or implied, oral or written, shall elect to be bound by the provisions of compensation plan No. 1, 2, or 3. Each employee whose employer is bound by the Workers' Compensation Act is subject to and bound by the compensation plan that has been elected by the employer.

     (2)  Unless the employer elects coverage for these employments under this chapter and an insurer allows an election, the Workers' Compensation Act does not apply to any of the following employments:

     (a)  household and domestic employment;

     (b)  casual employment as defined in 39-71-116;

     (c)  employment of a dependent member of an employer's family for whom an exemption may be claimed by the employer under the federal Internal Revenue Code;

     (d)  employment of sole proprietors, working members of a partnership, working members of a limited liability partnership, or working members of a member-managed limited liability company, except as provided in subsection (3);

     (e)  employment of a broker or salesperson performing under a license issued by the board of realty regulation;

     (f)  employment as a direct seller as defined by 26 U.S.C. 3508;

     (g)  employment for which a rule of liability for injury, occupational disease, or death is provided under the laws of the United States;

     (h)  employment of a person performing services in return for aid or sustenance only, except employment of a volunteer under 67-2-105;

     (i)  employment with a railroad engaged in interstate commerce, except that railroad construction work is included in and subject to the provisions of this chapter;

     (j)  employment as an official, including a timer, referee, or judge, at a school amateur athletic event, unless the person is otherwise employed by a school district;

     (k)  employment of a person performing services as a newspaper carrier or freelance correspondent if the person performing the services or a parent or guardian of the person performing the services in the case of a minor has acknowledged in writing that the person performing the services and the services are not covered. As used in this subsection, "freelance correspondent" is a person who submits articles or photographs for publication and is paid by the article or by the photograph. As used in this subsection, "newspaper carrier":

     (i)  is a person who provides a newspaper with the service of delivering newspapers singly or in bundles; but

     (ii) does not include an employee of the paper who, incidentally to the employee's main duties, carries or delivers papers.

     (l)  cosmetologist's services and barber's services as defined in 39-51-204(1)(e);

     (m)  a person who is employed by an enrolled tribal member or an association, business, corporation, or other entity that is at least 51% owned by an enrolled tribal member or members, whose business is conducted solely within the exterior boundaries of an Indian reservation;

     (n)  employment of a jockey who is performing under a license issued by the board of horseracing from the time that the jockey reports to the scale room prior to a race through the time that the jockey is weighed out after a race if the jockey has acknowledged in writing, as a condition of licensing by the board of horseracing, that the jockey is not covered under the Workers' Compensation Act while performing services as a jockey;

     (o)  employment of an employer's spouse for whom an exemption based on marital status may be claimed by the employer under 26 U.S.C. 7703;

     (p)  a person who performs services as a petroleum land professional. As used in this subsection, a "petroleum land professional" is 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 services that are directly related to the completion of a contracted specific task rather than on an hourly wage basis; and

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

     (q)  an officer of a quasi-public or a private corporation or manager of a manager-managed limited liability company who qualifies under one or more of the following provisions:

     (i)  the officer or manager is not engaged in the ordinary duties of a worker for the corporation or the limited liability company and does not receive any pay from the corporation or the limited liability company for performance of the duties;

     (ii) the officer or manager is engaged primarily in household employment for the corporation or the limited liability company;

     (iii) the officer or manager either:

     (A) owns 20% or more of the number of shares of stock in the corporation or owns 20% or more of the limited liability company; or

     (B)  owns less than 20% of the number of shares of stock in the corporation or limited liability company if the officer's or manager's shares when aggregated with the shares owned by a person or persons listed in subsection (2)(q)(iv) total 20% or more of the number of shares in the corporation or limited liability company; or

     (iv) the officer or manager is the spouse, child, adopted child, stepchild, mother, father, son-in-law, daughter-in-law, nephew, niece, brother, or sister of a corporate officer who meets the requirements of subsection (2)(q)(iii)(A) or (2)(q)(iii)(B).

     (r)  a person who is an officer or a manager of a ditch company as defined in 27-1-731;

     (s)  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.

     (3)  (a) A sole proprietor, a working member of a partnership, a working member of a limited liability partnership, or a working member of a member-managed limited liability company who represents to the public that the person is an independent contractor independently contracted worker shall elect to be bound personally and individually by the provisions of compensation plan No. 1, 2, or 3 but may apply to the department for an exemption from the Workers' Compensation Act.

     (b)  The application must be made in accordance with the rules adopted by the department. There is a $25 fee for the initial application. Any subsequent application renewal must be accompanied by a $25 application fee. The application fee must be deposited in the administration fund established in 39-71-201 to offset the costs of administering the program.

     (c)  When an application is approved by the department, it is conclusive as to the status of an independent contractor independently contracted worker and precludes the applicant from obtaining benefits under this chapter.

     (d)  The exemption, if approved, remains in effect for 3 years following the date of the department's approval. To maintain the independent contractor independently contracted worker status, an independent contractor independently contracted worker shall every 3 years submit a renewal application. A renewal application must be submitted for all independent contractor independently contracted worker exemptions approved on or after July 1, 1995. The renewal application and the $25 renewal application fee must be received by the department at least 30 days before the anniversary date of the previously approved exemption.

     (e)  A person who makes a false statement or misrepresentation concerning that person's status as an exempt independent contractor independently contracted worker is subject to a civil penalty of $1,000. The department may impose the penalty for each false statement or misrepresentation. The penalty must be paid to the uninsured employers' fund. The lien provisions of 39-71-506 apply to the penalty imposed by this section.

     (f)  If the department denies the application for exemption, the applicant may contest the denial by petitioning for review of the decision by an appeals referee in the manner provided for in 39-51-1109. An applicant dissatisfied with the decision of the appeals referee may appeal the decision in accordance with the procedure established in 39-51-2403 and 39-51-2404.

     (4)  (a) A corporation or a manager-managed limited liability company shall provide coverage for its employees under the provisions of compensation plan No. 1, 2, or 3. A quasi-public corporation, a private corporation, or a manager-managed limited liability company may elect coverage for its corporate officers or managers, who are otherwise exempt under subsection (2), by giving a written notice in the following manner:

     (i)  if the employer has elected to be bound by the provisions of compensation plan No. 1, by delivering the notice to the board of directors of the corporation or to the management organization of the manager-managed limited liability company; or

     (ii) if the employer has elected to be bound by the provisions of compensation plan No. 2 or 3, by delivering the notice to the board of directors of the corporation or to the management organization of the manager-managed limited liability company and to the insurer.

     (b)  If the employer changes plans or insurers, the employer's previous election is not effective and the employer shall again serve notice to its insurer and to its board of directors or the management organization of the manager-managed limited liability company if the employer elects to be bound.

     (5)  The appointment or election of an employee as an officer of a corporation, a partner in a partnership, a partner in a limited liability partnership, or a member in or a manager of a limited liability company for the purpose of exempting the employee from coverage under this chapter does not entitle the officer, partner, member, or manager to exemption from coverage.

     (6)  Each employer shall post a sign in the workplace at the locations where notices to employees are normally posted, informing employees about the employer's current provision of workers' compensation insurance. A workplace is any location where an employee performs any work-related act in the course of employment, regardless of whether the location is temporary or permanent, and includes the place of business or property of a third person while the employer has access to or control over the place of business or property for the purpose of carrying on the employer's usual trade, business, or occupation. The sign must be provided by the department, distributed through insurers or directly by the department, and posted by employers in accordance with rules adopted by the department. An employer who purposely or knowingly fails to post a sign as provided in this subsection is subject to a $50 fine for each citation."

     Section 45.  Section 39-71-405, MCA, is amended to read:

     "39-71-405.  Liability of employer who contracts work out. (1) An employer who contracts with an independent contractor independently contracted worker to have work performed of a kind which that is a regular or a recurrent part of the work of the trade, business, occupation, or profession of such the employer is liable for the payment of benefits under this chapter to the employees of the contractor independently contracted worker if the contractor independently contracted worker has not properly complied with the coverage requirements of the Worker's Compensation Act. Any insurer who becomes liable for payment of benefits may recover the amount of benefits paid and to be paid and necessary expenses from the contractor independently contracted worker primarily liable therein.

     (2)  Where When an employer contracts to have any work to be done by a contractor other than an independent contractor independently contracted worker, and the work so contracted to be done is a part or process in the trade or business of the employer, then the employer is liable to pay all benefits under this chapter to the same extent as if the work were done without the intervention of the contractor, and the work so contracted to be done shall may not be construed to be casual employment. Where When an employer contracts work to be done as specified in this subsection, the contractor and the contractor's employees shall come under that plan of compensation adopted by the employer.

     (3)  Where When an employer contracts any work to be done, wholly or in part for the employer, by an independent contractor independently contracted worker, where and the work so contracted to be done is casual employment as to such the employer, then the contractor shall become independently contracted worker becomes the employer for the purposes of this chapter."

     Section 46.  Section 39-71-415, MCA, is amended to read:

     "39-71-415.  Procedure for resolving disputes regarding independent contractor independently contracted worker status. (1) If an individual, employer, or insurer has a dispute as to whether an individual is an independent contractor independently contracted worker or an employee as defined in this chapter, any party may petition a department of labor and industry appeals referee for resolution of the dispute in accordance with 39-51-1109 and may appeal from a decision of the appeals referee in the same manner as prescribed in 39-51-2403 and 39-51-2404.

     (2)  If a claimant and insurer have a dispute over benefits and the dispute involves an issue of whether the claimant is an independent contractor independently contracted worker or employee as defined in this chapter, either party may petition the workers' compensation judge for resolution of the dispute in accordance with 39-71-2905.

     (3)  Notwithstanding the provisions of subsection (1), an individual may apply to the department for an exemption from the Workers' Compensation Act in accordance with 39-71-401."

     Section 47.  Section 39-71-2507, MCA, is amended to read:

     "39-71-2507.  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 39-71-2501(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 under 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 who is 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; or

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

     Section 48.  Section 39-72-102, MCA, is amended to read:

     "39-72-102.  Definitions. As used in this chapter, unless the context requires otherwise, the following definitions apply:

     (1)  "Beneficiary" is as defined in 39-71-116.

     (2)  "Child" is as defined in 39-71-116.

     (3)  "Department" means the department of labor and industry.

     (4)  "Disablement" means the event of becoming physically incapacitated by reason of an occupational disease from performing work in the worker's job pool. Silicosis, when complicated by active pulmonary tuberculosis, is presumed to be total disablement. "Disability", "total disability", and "totally disabled" are synonymous with "disablement", but they have no reference to "permanent partial disability".

     (5)  "Employee" is as defined in 39-71-118.

     (6)  "Employer" is as defined in 39-71-117.

     (7)  "Independent contractor" "Independently contracted worker" is as defined in 39-71-120.

     (8)  "Insurer" is as defined in 39-71-116.

     (9)  "Invalid" is as defined in 39-71-116.

     (10) "Occupational disease" means harm, damage, or death as set forth in 39-71-119(1) arising out of or contracted in the course and scope of employment and caused by events occurring on more than a single day or work shift. The term does not include a physical or mental condition arising from emotional or mental stress or from a nonphysical stimulus or activity.

     (11) "Order" is as defined in 39-71-116.

     (12) "Pneumoconiosis" means a chronic dust disease of the lungs arising out of employment in coal mines and includes anthracosis, coal workers' pneumoconiosis, silicosis, or anthracosilicosis arising out of such employment.

     (13) "Silicosis" means a chronic disease of the lungs caused by the prolonged inhalation of silicon dioxide (SiO₂) and characterized by small discrete nodules of fibrous tissue similarly disseminated throughout both lungs, causing the characteristic x-ray pattern, and by other variable clinical manifestations.

     (14) "Wages" is as defined in 39-71-123.

     (15) "Year" is as defined in 39-71-116."

     Section 49.  Section 41-2-103, MCA, is amended to read:

     "41-2-103.  Definitions. As used in this part, the following definitions apply:

     (1)  "Agriculture" means:

     (a)  all aspects of farming, including the cultivation and tillage of the soil;

     (b)  (i) dairying; and

     (ii) the production, cultivation, growing, and harvesting of any agricultural or horticultural commodities, including commodities defined as agricultural commodities in the federal Agricultural Marketing Act (12 U.S.C. 1141j(g));

     (c)  the raising of livestock, bees, fur-bearing animals, or poultry; and

     (d)  any practices, including forestry or lumbering operations, performed by a farmer or on a farm as an incident to or in conjunction with farming operations, including preparation for market or delivery to storage, to market, or to carriers for transportation to market.

     (2)  "Department" means the department of labor and industry provided for in 2-15-1701.

     (3)  "Domestic service" means an occasional, irregular, or incidental nonhazardous occupational activity related to and conducted in or around a private residence, including but not limited to babysitting, pet sitting or similar household chore, and manual yard work. Domestic service specifically excludes industrial homework.

     (4)  (a) "Employed" or "employment" means an occupation engaged in, permitted, or suffered, with or without compensation in money or other valuable consideration, whether paid to the minor or to some other person, including but not limited to occupations as servant, agent, subagent, or independent contractor independently contracted worker.

     (b)  The term does not include casual, community service, nonrevenue raising, uncompensated activities.

     (5)  "Employer" includes an individual, partnership, association, corporation, business trust, person, or group of persons acting directly or indirectly in the interest of an employer in relation to an employee.

     (6)  "Minor" means an individual under 18 years of age, except for an individual who:

     (a)  has received a high school diploma or has received a passing score on the general education development examination; or

     (b)  is 16 years of age or older and is enrolled in a registered state or federal apprenticeship program.

     (7)  "Occupation" means:

     (a)  an occupation, service, trade, business, or industry in which employees are employed;

     (b)  any branch or group of industries in which employees are employed; or

     (c)  any employment or class of employment in which employees are employed."

     Section 50.  Section 42-3-202, MCA, is amended to read:

     "42-3-202.  Initiation of preplacement evaluation -- who conducts evaluation -- payment of fees. (1) A prospective adoptive parent who wishes to adopt a child may initiate the process by:

     (a)  establishing a client relationship with the department or a licensed child-placing agency; or

     (b)  requesting a preplacement evaluation from either the department or a licensed child-placing agency.

     (2)  The department may contract with a licensed social worker or a licensed child-placing agency to conduct the evaluation.

     (3)  The prospective adoptive parent and the home of the prospective adoptive parent must be studied and evaluated according to the department's or licensed child-placing agency's standards for placement of a child.

     (4)  A department or agency from which an individual is seeking to adopt a child may require the individual to be evaluated by its own qualified employee or independent contractor independently contracted worker even if the individual has received a favorable preplacement evaluation from another evaluator.

     (5)  Fees for the study and report are set by the entity completing them and must be paid for by the prospective adoptive parent."

     Section 51.  Section 50-72-102, MCA, is amended to read:

     "50-72-102.  Definitions. (1) "Authorized representative" means a mine inspector or any other person employed or authorized by the department to perform any and all duties under this chapter.

     (2)  "Corporation" means a body formed and authorized by law to act as a single person although constituted by one or more persons and legally endowed with various rights and duties, including the capacity of succession.

     (3)  "Department" means the department of labor and industry.

     (4)  "Employee" means every a person in this state, including a contractor other than an independent contractor independently contracted worker, who is in the service of an employer, as hereinafter defined, in or about any mine, mill, smelter, excavation, or quarry under any appointment or contract of hire, express or implied, oral or written, whether lawfully or unlawfully employed and whether the employment is casual or otherwise.

     (5)  "Employer" means every a person, firm, partnership, corporation, or association, including an independent contractor independently contracted worker, who has any person in service in or about any mine, mill, smelter, excavation, or quarry under any appointment or contract of hire, express or implied, oral or written.

     (6)  "Inspector" means a person employed by the department to inspect metallic and nonmetallic mines, mills, smelters, or quarries as provided in this chapter.

     (7)  "Mine" means any mine or excavation when clay, metallic ore, mineral, gypsum, or rock is dug or mined, whether on surface or underground, where metal-bearing ores or nonmetallic mineral commodities (,exclusive of coal or lignite), are dug or mined whether at the surface or underground.

     (8)  "Notice" means a written notice, work order, or correction notice issued by an authorized representative of the department, which notice that specifies a violation and directs or recommends corrective measures and may specify a definite date or time in which to abate said the violation.

     (9)  "Occupational health" means any of those health conditions that occur as a result of employment in a mine.

     (10) "Order" means and includes any decision, rule, regulation, direction, requirement, or standard set, adopted, or issued by the department or any other determination or decision made by the department."

     Section 52.  Section 72-2-1005, MCA, is amended to read:

     "72-2-1005.  Exclusions from statutory rule against perpetuities. Section 72-2-1002 does not apply to:

     (1)  a nonvested property interest or a power of appointment arising out of a nondonative transfer, except a nonvested property interest or a power of appointment arising out of a:

     (a)  premarital or postmarital agreement;

     (b)  separation or divorce settlement;

     (c)  spouse's election;

     (d)  similar arrangement arising out of a prospective, existing, or previous marital relationship between the parties;

     (e)  contract to make or not to revoke a will or trust;

     (f)  contract to exercise or not to exercise a power of appointment;

     (g)  transfer in satisfaction of a duty of support; or

     (h)  reciprocal transfer;

     (2)  a fiduciary's power relating to the administration or management of assets, including the power of a fiduciary to sell, lease, or mortgage property, and the power of a fiduciary to determine principal and income;

     (3)  the power to appoint a fiduciary;

     (4)  a discretionary power of a trustee to distribute principal before termination of a trust to a beneficiary having an indefeasibly vested interest in the income and principal;

     (5)  a nonvested property interest held by a charity, government, or governmental agency or subdivision if the nonvested property interest is preceded by an interest held by another charity, government, or governmental agency or subdivision;

     (6)  a nonvested property interest in or a power of appointment with respect to a trust or other property arrangement forming part of a pension, profit-sharing, stock bonus, health, disability, death benefit, income deferral, or other current or deferred benefit plan for one or more employees or independent contractors, independently contracted workers or their beneficiaries or spouses, to which contributions are made for the purpose of distributing to or for the benefit of the participants or their beneficiaries or spouses the property, income, or principal in the trust or other property arrangement, except a nonvested property interest or a power of appointment that is created by an election of a participant or a beneficiary or spouse; or

     (7)  a property interest, power of appointment, or arrangement that was not subject to the common-law rule against perpetuities or is excluded by another statute of this state."

     Section 53.  Section 81-23-101, MCA, is amended to read:

     "81-23-101.  Definitions. (1) Unless the context requires otherwise, in this chapter, the following definitions apply:

     (a)  "Board" means the board of milk control provided for in 2-15-3105.

     (b)  "Class I milk" includes all bottled or packaged milk, low fat, buttermilk, chocolate milk, whipping cream, commercial cream, half-and-half, skim milk, fortified skim milk, skim milk flavored drinks, and any other fluid milk not specifically classified in this chapter, whether raw, pasteurized, homogenized, sterile, or aseptic.

     (c)  "Class II milk" includes milk used in the manufacture of ice cream and ice cream mix, ice milk, sherbet, eggnog, cultured sour cream, cottage cheese, condensed milk, and powdered skim for human consumption.

     (d)  "Class III milk" includes milk used in the manufacture of butter, cheddar cheese, process cheese, livestock feed, powdered skim other than for human consumption, and skim milk dumped.

     (e)  "Consumer" means a person or an agency, other than a dealer, who purchases milk for consumption or use.

     (f)  "Dealer" means a producer, distributor, producer-distributor, jobber, or independent contractor independently contracted worker.

     (g)  "Distributor" means a person purchasing milk from any source, either in bulk or in packages, and distributing it for consumption in this state. The term includes what are commonly known as jobbers and independent contractors independently contracted workers. The term, however, excludes a person purchasing milk from a dealer licensed under this chapter, for resale over the counter at retail or for consumption on the premises.

     (h)  "Licensee" means a person who holds a license from the department.

     (i)  "Market" means an area of the state designated by the department as a natural marketing area.

     (j)  "Milk" means the lacteal secretion of a dairy animal or animals, including those secretions when raw and when cooled, pasteurized, standardized, homogenized, recombined, concentrated fresh, or otherwise processed and all of which is designated as grade A by a duly constituted health authority and also includes those secretions that are in any manner rendered sterile or aseptic, notwithstanding whether they are regulated by any health authority of this or any other state or nation.

     (k)  "Person" means an individual, firm, corporation, or cooperative association or the dairy operated by the department of corrections at the Montana state prison.

     (l)  "Producer" means a person who produces milk for consumption in this state, selling it to a distributor.

     (m)  "Producer prices" means those prices at which milk owned by a producer is sold in bulk to a distributor.

     (n)  "Producer-distributor" means a person both producing and distributing milk for consumption in this state.

     (o)  "Retailer" means a person selling milk in bulk or in packages over the counter at retail or for consumption on the premises and includes but is not limited to retail stores of all types, restaurants, boardinghouses, fraternities, sororities, confectioneries, public and private schools, including colleges and universities, and both public and private institutions and instrumentalities of all types and description.

     (2)  The department may assign new milk products, not expressly included in one of the classes defined in this section, to the class which in its discretion it determines to be proper."

     Section 54.  Section 82-1-101, MCA, is amended to read:

     "82-1-101.  Persons required to comply. (1) A person, firm, or corporation operating that operates individually or through agents within the state of Montana for the purpose of seismic exploration in which exploration entry is made upon the surface estate for the acquisition of geophysical data for any purpose whatsoever, and which that person, firm, or corporation either through its own employees or by hiring the services of others operates seismograph crews, as the term is generally known, shall comply with the following provisions of this part;. provided, however, that However, compliance with the provisions of this part by a seismograph crew or its employer shall constitute constitutes compliance herewith by that person, firm, or corporation who has engaged the services of such the crew or its employer as an independent contractor independently contracted worker insofar as to the extent that the geophysical operations of such the crew are concerned.

     (2)  The board of oil and gas conservation shall adopt rules:

     (a)  requiring adequate identification of seismic exploration crews operating in this state;

     (b)  designating areas where seismic exploration and activities may not be allowed; and

     (c)  regulating the plugging and abandonment of seismic shot holes."

     Section 55.  Section 90-15-302, MCA, is amended to read:

     "90-15-302.  Natural heritage program. (1) There is a Montana natural heritage program to be operated by the library. In order to establish the program, the library may contract with an independent contractor independently contracted worker or may employ necessary staff. In order to minimize costs, the library or other state agencies may make available state resources and facilities to an independent contractor independently contracted worker as part of a contract for services.

     (2)  The Montana natural heritage program shall must be designed to be compatible with similar programs in other states. This program is to be an initial step in the formulation of the comprehensive natural resource information system referred to in 90-15-301 and is to be considered a part of the system."

     NEW SECTION.  Section 56.  Name change -- directions to code commissioner. Whenever a reference to "independent contractor" appears in legislation enacted by the 1999 legislature, the code commissioner is directed to change it to an appropriate reference to "independently contracted worker".

     NEW SECTION.  Section 57.  Codification instruction. [Section 1] is intended to be codified as an integral part of Title 1, chapter 1, part 2, and the provisions of Title 1, chapter 1, part 2, apply to [section 1].

     NEW SECTION.  Section 58.  Saving clause. [This act] does not affect rights and duties that matured, penalties that were incurred, or proceedings that were begun before [the effective date of this act].

- END -

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