BEFORE THE DEPARTMENT OF COMMERCE
OF THE STATE OF MONTANA
In the matter of the amendment of ARM 8.94.3101 and 8.94.3102 pertaining to the administration of the Montana Historic Preservation Grant (MHPG) Program
NOTICE OF AMENDMENT
TO: All Concerned Persons
1. On October 6, 2023, the Department of Commerce published MAR Notice No. 8-94-204 pertaining to the public hearing on the proposed amendment of the above-stated rules at page 1118 of the 2023 Montana Administrative Register, Issue Number 19.
2. The department has amended the above-stated rules as proposed.
3. The department has thoroughly considered the comments and testimony received. A summary of the comments received and the department's responses are as follows:
Comment 1: A comment stated it should say 2025 session in the "When will funds be available?" section of the guidelines in the sentence "Awards will be made during the 2023 legislative session."
Response 1: The department will update the sentence with the correction.
Comment 2: A comment stated that the program is game-changing for the care and maintenance of historic properties in Montana. There is a backlog of deferred maintenance out there and it is hoped the program will continue for many more years.
Response 2: Thank you for your comment.
Comment 3: Several comments requested the department to consider flexibility in the match requirement by allowing pre-award work to count towards match and considering in-kind contributions since rural non-profits and museums may not have the ability for cash match.
Response 3: The department's guidelines provide flexibility with the type of match allowed in the form of cash, grants, loans, in-kind, and other forms of capital. The department will consider including previous components of a project as a match.
Comment 4: A comment asked when the new guidelines will be completed and go into effect.
Response 4: The updated guidelines will be effective November 18, 2023.
Comment 5: Several comments were received stating the department should reconsider the ineligibility of state and federal applicants since many state and federal agencies manage significant historic sites in Montana that need assistance. These agencies are responsible for these structures on behalf of the public. There are not enough funds for these agencies to run their programs, cover administrative costs, and maintain historic buildings. These sites attract tourist dollars, which in turn fund the MHPG program.
Response 5: The department recognizes the importance of the many historic sites state and federal agencies own and their link to tourism across the state. The guidelines were designed in consideration of the various needs and projects across the state. The legislature has awarded three state agency projects in the last two cycles of the program. The department will consider including state and federal agencies as eligible applicants.
Comment 6: Several comments were received stating the requirement that projects "be open to or highly visible to the public" is a difficult if not impossible task for some projects, like museum collections. Out of necessity for the curation and care of such collections, these are stored in spaces that are not open or visible to the public. Commenters suggest that "public benefit" could be a requirement for eligible projects and that its definition provides greater flexibility.
Response 6: House Bill 12 (HB 12) was amended in the 2023 legislative session to add that projects funded must provide that a significant portion of the facility be open to public access and use. Projects that confer only a private benefit are not eligible. Additionally, HB 12 was amended to add criteria for the anticipated public benefit, including the extent the site or building will be open to the public and the degree of immediate facility use after project completion. If a museum is open to the public and confers a public use, they would be able to meet this criterion even if the project was for a museum collection that was not public. The guidelines were designed to balance all required criteria and applicants may score higher or lower in various categories while still ranking high overall.
Comment 7: Several comments were received stating that nonprofit and public owners should be required to match the total project cost at a lesser percentage than private owners. For nonprofit owners, especially, there are many potential projects coming from rural communities and volunteer groups with limited experience and capacity to apply for and manage grants, yet this support is needed to carry out their projects. Moreover, private owners have access to a more varied pool of financing and revenue options than nonprofit and public owners. Requiring a smaller match for nonprofit groups and government agencies would help balance this need. For example, nonprofit and public owners could be required to provide a 20% match while private owners could be required to provide a 50% match.
Response 7: The guidelines aim to meet the requirements of the legislation in making both public and private entities eligible for grant funding. The guidelines aim to provide flexibility in the types of matches accepted to meet the needs of all types of applicants. Private business applicants made up 8% of awarded projects in the last two cycles, and those have been to support small-scale local historic preservation efforts. The department will consider increasing the match requirement for private applicants.
Comment 8: Several comments were received requesting the department include a glossary of definitions or more explanatory content in the guidelines. Some terms are unclear. For example, "historic district" under III.a. Within the field of historic preservation, an "historic district" is a very specific thing. It is a type of historic 3 designation on local, state, and national historic registries as a significant group of sites, buildings, structures, or objects that are united historically, architecturally, or culturally. Is this the MHPG definition? Likewise, "permanent security infrastructure" under Preservation Activities on page 6., "stand-alone activities" under Preservation Scope of Work on page 7, and "Other forms of capital" under Eligible Funding on page 10.
Response 8: The department will consider incorporating a glossary as a resource to support applicants. Department staff will provide support and technical assistance to assist applicants with submitting the most successful and competitive application related to their specific project. The department recognizes that there is local, state, and federally recognized historic districts as noted in our guidelines. A contributing property for any local, state, or federal historic district would be eligible as a historic site under our MHPG guidelines.
Comment 9: Several comments were received saying that once any amendments are made through this process and the application opened, no additional changes should be made until after the review process is complete and awards are determined. Changing rules and regulations in the middle of a grant round brings a great deal of uncertainty to the applicant and may deter applicants from participating in the program, thereby jeopardizing the future of this very important resource.
Response 9: The department may not change or amend the program once the final rules are adopted. The legislature may make amendments to the program prior to award at their discretion. Department staff have no decision-making authority over any application and only provide advisory recommendations to the legislature.
Comment 10: A comment was received that the grant cycle should be held annually as submitting applications and supplemental materials eighteen months before awards is difficult for smaller organizations.
Response 10: There are specific requirements for the MHPG program, which are listed in 22-3-1305, MCA, and must be used as the basis for these guidelines. The requirement in 22-3-1305, MCA states that applicants must submit a grant proposal to the department by March 1 of the year preceding the convening of a regular legislative session which is held biennially. An annual cycle would not meet the requirements set forth by the legislature.
Comment 11: A comment was received stating that the criteria are solid and reflects the interests of the committee who created the program.
Response 11: Thank you for your comment.
Comment 12: A comment was received asking to reconsider the scoring within the criteria to give historic significance more weight.
Response 12: The guidelines were designed to balance both economic impact and heritage value. The draft guidelines have Criterion D related to historic significance as weighted with the most points. Additionally, the guidelines have a four-level scoring system (0, 1, 2, 3) which means each criterion's scoring holds more weight than in previous cycles. The department will consider updating the guidelines to increase the scoring related to Criterion D.
Comment 13: A comment was received asking if the draft guidelines will still consider local governments (cities and counties) to be eligible applicants.
Response 13: Local governments, both cities and counties, are still considered eligible applicants in the draft guidelines.
Comment 14: A comment was received requesting local governments be at a lower match rate than for-profits and not at a 50% match.
Response 14: All applicants are required to provide a 20% match in the guidelines.
Comment 15: A comment was received stating that state and federal agencies should not be included as eligible applicants since many museums are run by part-time boards and staff on limited budgets. State and federal entities have access to the appropriations processes, by making departmental requests. Cities and counties do not have access to the appropriations process. The Museums Act was to be a funnel to those who cannot play the government's game. Exemptions should be added for "friends of" groups and support groups for federal agencies that are independent non-profits.
Response 15: The current guidelines allow non-profits to apply on behalf of historic sites.
Comment 16: A comment was received in support of museums' applications for storage, collections, support, and logistics remaining eligible.
Response 16: There are established criteria for the Montana Historic Preservation Grant program, which were used as the basis for these guidelines. Operational funds and personnel services are not eligible activities. However, support for storage and collections in the form of permanent improvements remain eligible in the guidelines.
Comment 17: A comment was received stating that there have been problems with the program locally. Fort Missoula received funding but returned the grant because the legislature altered the amount awarded and the project could not be completed. The commenter noted that there needs to be consistency from what is applied for, what is approved and evaluated by the Department of Commerce, and then what is approved by the legislature.
Response 17: The legislature may consider the agency recommendations, but ultimately the legislature may fund reduced award amounts regardless of the application or department recommendations.
Comment 18: A comment was received in favor of taking some of the MHPG money and making it available for $7,000 to $10,000 operational grants for museums.
Response 18: There are established specific criteria and requirements for the MHPG program, which are listed in 22-3-1306, MCA, and must be used as the basis for these guidelines. Operating expenses were not listed in the bill and would represent a departure from the legislature's guidance so are therefore not listed as an eligible expense.
Comment 19: A comment was received that federal agencies must partner with an eligible public entity or nonprofit organization willing to apply for and administer a grant on their behalf.
Response 19: The current guidelines allow non-profits to apply on behalf of historic sites.
/s/ John Semmens /s/ Mandy Rambo
John Semmens Mandy Rambo
Rule Reviewer Deputy Director
Department of Commerce
Certified to the Secretary of State November 7, 2023.