BEFORE THE DEPARTMENT OF LABOR AND INDUSTRY

                                              STATE OF MONTANA 

 

In the matter of the amendment of ARM 24.23.301 and 24.23.304 and the repeal of ARM 24.23.313 pertaining to job growth incentive tax credit

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT AND REPEAL

 

TO: All Concerned Persons

 

            1. On June 29, 2023, at 10:00 a.m., a public hearing will be held via remote conferencing to consider the proposed changes to the above-stated rules. There will be no in-person hearing. Interested parties may access the remote conferencing platform in the following ways:

            a. Join Zoom Meeting, https://mt-gov.zoom.us/j/81804106121

                  Meeting ID: 818 0410 6121, Passcode: 231569

                  -OR-

            b. Dial by telephone, +1 406 444 9999 or +1 646 558 8656

                  Meeting ID: 818 0410 6121, Passcode: 231569

 

            2. The Department of Labor and Industry (department) will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice. If you require an accommodation, contact the department no later than 5:00 p.m., on June 22, 2023, to advise us of the nature of the accommodation that you need. Please contact the department at P.O. Box 1728, Helena, Montana 59624-1728; telephone (406) 444-5466; Montana Relay 711; or e-mail laborlegal@mt.gov.

 

            3. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:

 

            24.23.301  CREDIT FOR EMPLOYER JOB GROWTH (1) Any employer seeking the tax credit must apply for the credit certificate by January 31 of the year following the tax year for which the certificate is requested for the department to provide a certification by regular tax filing dates. Applications received after that date will still be processed.

            (2) The department must provide the credit certificate before an employer may claim a tax credit. Once a certificate is issued to an employer, the employer may claim it on a tax return. An employer must provide the credit certificate number to the Department of Revenue when claiming the tax credit on a tax return. 

            (2) The total number of employees employed by an employer for purposes of certification is based on the average monthly number of employees reported on the employer's unemployment insurance tax filings.

            (3) An employer applying for certification may count employees hired across multiple tax years to meet the definition of qualifying net employee growth for purposes of certification.

 

            AUTH:  39-11-404, MCA

            IMP:     39-11-404, MCA

 

REASON: Reasonable necessity exists to amend (1) to provide that deadlines for applications are for the benefit of the party applying.  While the department will nonetheless process the application, it may not be completed in time for tax filing deadlines of the applicant.  Subsection (2) is proposed to be removed because it duplicates statute and sets forth requirements of the Department of Revenue.  New (2) is proposed to clarify that, for purposes of verification, unemployment insurance tax records will establish the standard for the number of employees working for an employer.  New (3) is proposed to clarify that an employer may hire employees over the course of multiple years, eventually culminating in sufficient employee growth to qualify for certification.

 

            24.23.304  REQUIRED DOCUMENTATION (1) A complete application shall include:

            (a) all information needed to determine the number of full-time employees (FTEs) employed by the company in Montana in 2021, including number employed and hours worked and in the last calendar year;

            (b) a list of all statewide employees of the employer who have been hired during the last calendar year in 2022 or later and claimed as qualifying new employees, along with identifying information;.  In addition, for each employee listed, the employer must provide:

            (i) date of hire and date of separation, if applicable;

            (ii) attestation that the benefits provided are the same as typically paid to other employees of the employer; and

            (iii) records of Montana-source wages paid.

            (c) dates of hire of each employee listed;

            (d) benefits provided to each employee listed;

            (e) Montana-source wages paid to each employee listed during the tax year; and

            (f) date of hire and date of separation if no longer employed for each employee listed.

            (2) through (5) remain the same. 

 

            AUTH: 39-11-404, MCA

            IMP:     39-11-404, MCA

 

REASON: Reasonable necessity exists to amend (1)(a) to reflect statutory changes which no longer expressly refer to FTE.  Reasonable necessity exists to amend (1)(b) to clarify and simplify the reference to information which must be provided in the initial application as to each employee for whom an applicant seeks to request certification.

 

            4. The rule proposed to be repealed is as follows:

 

            24.23.313  AMERICAN RESCUE PLAN ACT SAVINGS CLAUSE 

 

            AUTH: 39-11-404, MCA

            IMP:     39-11-404, MCA

 

REASON: Reasonable necessity exists to repeal this rule because the statute implemented has been repealed by Section 5 of House Bill 601 (2023).

 

            5. Concerned persons may present their data, views, or arguments at the hearing. Written data, views, or arguments may also be submitted at dli.mt.gov/rules or P.O. Box 1728; Helena, Montana 59624.  Comments must be received no later than 5:00 p.m., July 7, 2023.

 

            6. An electronic copy of this notice of public hearing is available at dli.mt.gov/rules and sosmt.gov/ARM/register.

 

            7. The agency maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by the agency. Persons wishing to have their name added to the list may sign up at dli.mt.gov/rules or by sending a letter to P.O. Box 1728; Helena, Montana 59624 and indicating the program or programs about which they wish to receive notices. 

 

            8. The bill sponsor contact requirements of 2-4-302, MCA, apply and have been fulfilled. The primary bill sponsor was contacted on May 10, 2023, by electronic mail.

 

            9. Pursuant to 2-4-111, MCA, the agency has determined that the rule changes proposed in this notice will have a significant and direct impact upon small businesses.  It is expected that Montana's small businesses which experience growth will be able to take advantage of these new rules to claim a tax credit.

 

            10. Department staff has been designated to preside over and conduct this hearing.

/s/ QUINLAN L. O'CONNOR Quinlan L. O'Connor Rule Reviewer	/s/ LAURIE ESAU Laurie Esau, Commissioner DEPARTMENT OF LABOR AND INDUSTRY

 

 

            Certified to the Secretary of State May 30, 2023.