Administrative Rules of the State of Montana

BEFORE THE DEPARTMENT OF LABOR AND INDUSTRY

STATE OF MONTANA

In the matter of the adoption of NEW RULES I through VI, the amendment of ARM 24.21.401, 24.21.411, and 24.21.421, and the repeal of ARM 24.21.101, 24.21.201, 24.21.301, and 24.21.425, all pertaining to apprenticeship training programs

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NOTICE OF PUBLIC HEARING ON PROPOSED ADOPTION, AMENDMENT, AND REPEAL

TO: All Concerned Persons

1. On November 19, 2010, at 10:30 a.m., the Department of Labor and Industry (department) will hold a public hearing to be held in the the auditorium of the Scott Hart Building, 303 North Roberts, Helena, Montana, to consider the proposed adoption, amendment, and repeal of the above-stated rules.

2. The 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 November 15, 2010, to advise us of the nature of the accommodation that you need. Please contact the Workforce Services Division, Department of Labor and Industry, Attn: Mark Maki, P.O. Box 1728, Helena, MT 59624-1728; telephone (406) 444-3556; fax (406) 444-3037; TDD (406) 444-0532; or e-mail mmaki@mt.gov.

3. GENERAL STATEMENT OF REASONABLE NECESSITY: There is reasonable necessity to amend and adopt rules in order to maintain the department's status as the federally-recognized state apprenticeship registration agency for Montana. The United States Department of Labor, Employment and Training Administration, Office of Apprenticeship has adopted revised federal regulations that provide that state apprenticeship registration agencies will be recognized for federal purposes only if the state agency adopts rules that meet certain criteria and are not otherwise inconsistent with those federal rules. The department believes that failure to amend and adopt rules will lead to the likely loss of the existing recognition of the department as the state apprenticeship recognition agency, to the detriment of Montana employers who rely on the use of registered apprentices either due to occupational licensing requirements or for work on public works (prevailing wage) contracts, and to Montana's workforce which relies on the practical and technical training afforded by the apprenticeship process. The department believes that it is more likely to provide better local customer service to Montana employers, apprentices, and industry by maintaining its status as the recognized registration agency in Montana than would occur if registration could only occur at the federal level via the U.S. Department of Labor.

This general statement of reasonable necessity applies to all of the rules proposed for adoption, amendment, and repeal and will be supplemented as necessary for any given rule.

4. The proposed new rules provide as follows:

NEW RULE I DEFINITIONS as used in this this subchapter, the following definitions apply:

(1) "Apprenticeship agreement" has the meaning provided for by 39-6-104, MCA, and includes an indenture agreement.

(2) "Department" means the Department of Labor and Industry, as provided for by 2-15-1701, MCA.

(3) "Indenture agreement" means the specific written agreement between a sponsor and an individual apprentice regarding the terms and conditions of the apprentice's apprenticeship.

(4) "Joint apprenticeship committee" means a local or statewide committee operating pursuant to 39-6-104, MCA, and recognized by the department.

(5) "Registered apprentice" means an individual whose indenture agreement has been officially recognized and registered with a registration agency.

(6) "Registration agency" means any of the following:

(a) the department;

(b) the U.S. Department of Labor, acting through its employment and training administration; and

(7) "Sponsor" means an employer or a joint apprenticeship committee which operates an apprenticeship training program recognized by the department.

(8) "State apprenticeship advisory council" means the advisory body designated by the department pursuant to [NEW RULE III].

(9) "State apprenticeship and training program" means the organizational unit of the department described in [NEW RULE II].

AUTH: 39-6-101, MCA

IMP: 39-6-101, MCA

NEW RULE II STATE APPRENTICESHIP AND TRAINING PROGRAM

(1) There exists with the department's workforce services division an office which operates the state's apprenticeship and training program. The office functions as Montana's state apprenticeship agency and state office for apprenticeship, as those terms are used within 29 CFR part 29. The office organized as the apprenticeship and training program within the 21st century workforce technology, apprenticeship, and training bureau of the workforce services division of the department.

(2) The state apprenticeship and training program is responsible for:

(a) the approval of apprenticeship standards;

(b) the adoption of apprentice wage rates pursuant to 39-6-108, MCA;

(d) the registration of individual apprentices;

(e) maintaining records related to apprentice's progress and completion;

(f) providing technical assistance to sponsors;

(g) monitoring and evaluating apprentice and sponsor performance with respect to an apprenticeship program, including:

(i) requiring corrective actions when appropriate; or

(ii) terminating or cancelling an apprenticeship agreement;

(h) issuing completion certificates to apprentices as appropriate; and

(i) otherwise administering the state apprenticeship and training program, including promoting the use of apprenticeship as a means of workforce training.

(3) The state apprenticeship and training program uses the state apprenticeship advisory council established in [NEW RULE III] in an advisory and consultative role regarding matters of interest to the program and the apprenticeship community. The apprenticeship and training program uses the state apprenticeship advisory council as an additional means of fostering dialogue and communication between the program and sponsors, apprentices, employers, industry, and educators.

(4) The state apprenticeship and training program's main office is located at the Walt Sullivan Building, 1327 Lockey Avenue, Helena, Montana, 59601.

(a) The office mailing address is P.O. Box 1728, Helena, MT 59624-1728.

(b) The office telephone numbers are:

(i) for voice calls, 406.444.3998;

(ii) for fax transmissions, 406.444.3037; and

(iii) for TDD/TTY calls, 406.444.0532.

(d) The state apprenticeship and training program operates various web sites, including:

(i) http://wsd.dli.mt.gov/apprenticeship; and

(ii) http://exploreapprenticeship.mt.gov.

AUTH: 39-6-101, MCA

IMP: 39-6-101, MCA

REASON: There is reasonable necessity to adopt NEW RULE II to clarify how the department has organized itself to carry out its responsibilities regarding apprenticeship, and to differentiate the roles of the state apprenticeship and training program (the state registration agency) from that of the advisory body described in NEW RULE III. The identification of the registration agency and contact information, as well as an identification of the roles of the state apprenticeship agency and the apprenticeship council are required for federal recognition.

NEW RULE III state apprenticeship advisory council to be established (1) The department shall establish on a continuing basis a state apprenticeship advisory council pursuant to the provisions of 29 CFR part 29, and in accordance with 2-15-122, MCA. The state apprenticeship advisory council is a state apprenticeship council, operating as an advisory body, within the definitions contained in 29 CFR section 29.2.

(2) Members of the state apprenticeship advisory council are appointed by the commissioner of labor and industry.

(3) The commissioner shall appoint members of the state apprenticeship advisory council that, to the greatest extent feasible:

(a) equitably reflect the geographic and social diversity of apprenticeship within the state; and

(b) equitably reflect the balance between apprentice sponsors whose members are affiliated with labor organizations and those whose members are not signatories to collective bargaining agreements.

(4) The council consists of at least 7, but not more than 25, appointed, voting members. The members must be familiar with apprenticeable occupations.

(a) The council must have an equal number of representatives of employer and employee organizations.

(b) At least one member of the council must be a public member who is not directly affiliated with an employer, a sponsor, or a labor organization. The total number of public members may not exceed the number of members who serve as a representative of an employee or an employer organization.

(d) The department may designate appropriate individuals, such as department employees, to provide support functions for the council as needed. Such individuals are not voting members of the council, but may be given a voice at council meetings at the discretion of the council's presiding officer.

(5) Meetings of the state apprenticeship advisory council are open, public meetings within the meaning of Title 2, chapter 3, part 2, MCA.

AUTH: 39-6-101, MCA

IMP: 2-3-203, 2-15-122, 39-6-101, MCA

REASON: There is reasonable necessity to adopt NEW RULE III in order to satisfy one of the conditions required by 29 CFR section 29.13 for the U.S. Department of Labor to recognize a state apprenticeship agency, namely the establishment of a state apprenticeship council. While the federal regulations allow either a "regulatory" or an "advisory" council, Montana law (2-15-123, MCA) does not allow executive branch agencies to create new regulatory agencies. Accordingly, the department concludes that establishing an advisory body, pursuant to 2-15-122, MCA, is the most feasible way to satisfy the provisions of 29 CFR section 29.13(a)(2). Section 2-15-122, MCA, allows an agency head to create an advisory body, with the approval of the governor, and sets various requirements. The department believes that it cannot, in the rule itself, establish the advisory council, but that the rule creates a duty for the department to take the necessary steps to establish the advisory council. The department also believes that it is appropriate to expressly note and recognize within the text of the rule that the state apprenticeship advisory council meetings are subject to Montana's open meeting laws.

NEW RULE IV FEDERAL REGULATIONS INCORPORATED BY REFERENCE (1) The department adopts and incorporates by reference the following federal regulations for use in the operation of its state apprenticeship and training program:

(a) 29 CFR section 29.3, eligibility and criteria for registration of an apprenticeship program, as in effect on July 1, 2010;

(b) 29 CFR section 29.4, criteria for apprenticeable occupations, as in effect on July 1, 2010;

(d) 29 CFR section 29.6, program performance standards, as in effect on July 1, 2010;

(e) 29 CFR section 29.7, apprenticeship agreement, as in effect on July 1, 2010;

(f) 29 CFR section 29.8, deregistration of a registered program, as in effect on July 1, 2010;

(g) 29 CFR section 29.10, hearings for deregistration, as in effect on July 1, 2010, except that the appellate provisions of 29 CFR section 29.10(c) will not apply to the extent they are in conflict with the judicial review provisions of the Montana Administrative Procedure Act (Title 2, chapter 4, part 7, MCA);

(h) 29 CFR section 29.11, limitations, as in effect on July 1, 2010; and

(i) 29 CFR part 30, equal employment opportunity in apprenticeship and training, as in effect on July 1, 2010.

(2) The department is not formally adopting by reference the various other portions of 29 CFR part 29 because those portions either address matters related to the internal operations of government or are otherwise addressed by the administrative rules contained in this subchapter. As an example, the provisions of 29 CFR section 12, regarding complaint procedures, are addressed in ARM 24.21.416, and more generally under the Montana Administrative Procedure Act. Likewise, while the department is subject to 29 CFR section 29.13 for purposes of its recognition as the state apprenticeship agency, those provisions are by their terms not applicable to sponsors, employers, apprentices, or the public at large.

(3) Copies of the regulations incorporated by reference are available as follows:

(a) A printed copy of the regulations incorporated by reference is available for inspection and purchase at cost from the department and the U.S. Government printing office. The address for the department is listed in [NEW RULE II]. The address of the U.S. Government printing office is: U.S. Government Bookstore, 710 North Capitol Street N.W., Washington, D.C.

(b) An electronic copy of the regulations incorporated by reference is available via the internet by following the links at the following web sites:

(i) http://wsd.dli.mt.gov/apprenticeship/ (Montana Department of Labor and Industry web site); or

(ii) http://www.access.gpo.gov/nara/cfr/cfr-table-search.html#page1 (National Archives and Records Administration web site).

AUTH: 2-4-201, 39-6-101, MCA

IMP: 2-4-201, 39-6-101, MCA

REASON: There is reasonable necessity to adopt NEW RULE IV to incorporate by reference the federal regulations, rather than to reprint them within the text of the Administrative Rules of Montana (ARM). The federal regulations are readily available in print and on-line, and the department believes that it will be more convenient for the public (including current and potential sponsors, employers, apprentices, and instructors) to directly refer to the Code of Federal Regulations than to locate materials within the ARM. In addition, there is a savings to the department of not having to reprint federal regulations verbatim in this Notice of Public Hearing, as well as in printing and mailing costs. The Montana Administrative Procedure Act specifically provides (in 2-4-307, MCA) that agencies may incorporate standard references, such as the CFRs, via the rulemaking process.

There is also reasonable necessity to include an explanation of the basis upon which various portions of the federal regulations are not being adopted by reference. Those portions of the federal regulations not being incorporated by reference are ones which either apply to the internal operations of government, or are otherwise addressed by Montana rules or statutes. The department acknowledges that in order for it to be recognized as the state apprenticeship agency by the U.S. Department of Labor, and to continue to function as the state registration agency, it will have to operate in a manner consistent with the provisions of 29 CFR part 29.

NEW RULE V INTERIM CREDENTIALS (1) The state apprenticeship and training program shall award interim credentials to apprentices who demonstrate the appropriate competencies, when requested to do so by program sponsors, as provided by 29 CFR section 29.5, as adopted by the department in [New Rule IV].

(2) The state apprenticeship and training program will work with interested program sponsors to develop appropriate benchmarks and competency testing that will apply to the sponsor's apprenticeship program.

(3) Competency testing will not be recognized for a given apprentice until the benchmarks and testing protocols are incorporated into the apprenticeship program's standards.

AUTH: 39-6-101, MCA

IMP: 39-6-101, MCA

REASON: There is reasonable necessity to adopt NEW RULE V in order to satisfy one of the conditions required by 29 CFR section 29.13 for the U.S. Department of Labor to recognize a state apprenticeship agency, namely the ability to obtain interim credentials for qualified apprenticeship programs that request such interim credentials.

NEW RULE VI PERFORMANCE EVALUATIONS – WITHDRAWAL OF REGISTRATION (1) The state apprenticeship and training program shall conduct periodic performance evaluations, as provided for by 29 CFR section 29.6 as adopted by the department in [NEW RULE IV], for each apprenticeship program operating in Montana.

(2) The state apprenticeship and training program may withdraw the registration of an apprenticeship program ("deregister the apprenticeship program") if the apprenticeship program does not comply with the requirements of the applicable statutes or administrative rules. Registration may not be withdrawn before the program sponsor is afforded notice and an opportunity to be heard.

(3) Notice and an opportunity to be heard will be afforded pursuant to the provisions of the Montana Administrative Procedure Act, Title 2, chapter 4, part 6, MCA, and in accordance with the hearings provisions of ARM 24.21.416.

(4) For good cause shown, a person directly affected by a proposed withdrawal of registration of an apprenticeship program may intervene in a proceeding provided for by (3).

AUTH: 39-6-101, MCA

IMP: 39-6-101, MCA

REASON: There is reasonable necessity to adopt NEW RULE VI in order to satisfy one of the conditions required by 29 CFR section 29.13 for the U.S. Department of Labor to recognize a state apprenticeship agency, namely the performance of periodic performance evaluations, along with the providing for the deregistration of an apprenticeship program that does not comply with the required minimum standards.

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

24.21.401 REGISTRATION POLICY AND PROCEDURES (1) In order that a standard of training be maintained and upheld for all apprenticeable occupations, ~~the following policy must be satisfied~~ before approval and registration will be granted a program sponsor~~: All~~ all provisions of the apprenticeship program ~~approval~~ must either meet or exceed those recognized in the immediate geographical or state wide area where applicable. These provisions apply to all those listed in ARM 24.21.411 Minimum Guidelines for Registration of Apprenticeship Programs, including wages.

(2) The department will also apply the provisions of 29 CFR part 29 that are incorporated by reference in [NEW RULE IV] to determine whether a particular apprenticeship program will be approved and registered. A new apprenticeship program proposed for registration is subject to the provisional registration provisions of 29 CFR section 29.3, as adopted by the department in [NEW RULE IV].

~~(2)~~(3) Apprenticeship programs and standards of employers and unions ~~in other than the building and construction industry,~~ which jointly form a sponsoring entity on a multi-state basis and are registered pursuant to all requirements of Title 29 Code of Federal Regulations, Part 29 as ~~adopted February 15, 1977~~ in effect on July 1, 2010, by any ~~recognized State Apprenticeship Agency/Council or by the Bureau of Apprenticeship and Training, U.S. Department of Labor,~~ registration agency shall be accorded approval reciprocity by the ~~Apprenticeship Bureau~~ state apprenticeship and training program, if such reciprocity is requested by the sponsoring entity. An apprenticeship program must comply with Montana's statutes and administrative rules, including but not limited to:

(a) the applicable ratio requirements; and

(b) the apprenticeship wage rates established pursuant to 39-6-108, MCA.

AUTH: 39-6-101~~(2)(b)~~, MCA

IMP: 39-6-101, 39-6-108, MCA

REASON: There is reasonable necessity to amend ARM 24.21.401 to reference the federal regulations that are being incorporated by reference. In addition, there is reasonable necessity to clarify that, in accordance with federal regulations, reciprocity is available for all apprenticeable occupations, including those in the building and construction industry. Finally, there is reasonable necessity to amend the implementation citation to delete an incorrect internal reference within the cited statute and to add the citation to an additional statute which the rule implements.

24.21.411 MINIMUM GUIDELINES FOR REGISTRATION OF PROGRAMS

(1) remains the same.

(2) The standards must conform to the requirements of 29 CFR section 29.5, as adopted by the department in [NEW RULE IV].

AUTH: 39-6-101, MCA

IMP: 39-6-106, MCA

REASON: There is reasonable necessity to amend ARM 24.21.411 to reference the federal regulations that are being incorporated by reference. In addition, there is reasonable necessity to amend the implementation citation to delete an incorrect internal reference within the cited statute.

24.21.421 EQUAL EMPLOYMENT OPPORTUNITY (1) remains the same.

(2) Title 29, C.F.R. Part 5A is a federal regulation concerning employment of apprentices in federally financed projected where no apprenticeship program is in existence. In cases such as this, all provisions of this subchapter apply.

AUTH: 39-6-101, MCA

IMP: 39-6-101, MCA

REASON: There is reasonable necessity to amend ARM 24.21.421, as part of general revision and updating of apprenticeship rules, in order to delete a reference to a portion of the federal regulations which is no longer in existence. In addition, to the extent that (2) purported to address federally financed projects, federal regulations will apply as a matter of law to federal projects. Section 39-6-108, MCA, addresses the wage requirements for apprentices employed on Montana public works projects, in conjunction with the requirements of Title 18, chapter 2, part 4, MCA.

6. The department proposes to repeal the following rules:

24.21.101 FUNCTIONS OF THE APPRENTICESHIP BUREAU found at ARM page 24-1327.

AUTH: 39-6-101(2)(b), MCA

IMP: 39-6-101, MCA

24.21.201 RULES OF THE BUREAU found at ARM page 24-1337.

AUTH: 39-6-101(2)(b), MCA

IMP: 39-6-101, MCA

24.21.301 RECORDS OF THE BUREAU found at ARM page 24-1347.

AUTH: 39-6-101(2)(b), MCA

IMP: 39-6-101, MCA

24.21.425 APPROVAL FOR APPRENTICESHIP PROGRAM WHEN EMPLOYER IS PARTICIPANT IN COLLECTIVE BARGAINING AGREEMENT

found at ARM page 24-1381.

AUTH: 39-6-101, MCA

IMP: 39-6-101, MCA

REASON: There is reasonable necessity to repeal ARM 24.21.101, 24.21.201, 24.21.301, and 24.21.425 in light of the proposed adoption of the New Rules. In addition, the rules proposed for repeal are antiquated and no longer accurately reflect the organization of the department's workforce services division. The subject matter of ARM 24.21.425 is addressed within the regulations being adopted by reference in NEW RULE IV.

7. The federal regulations proposed to be incorporated by reference in NEW RULE IV are available for review and inspection at the department's offices, 1327 Lockey Ave., Helena, Montana. Printed copies of the federal regulations are also available in many public libraries. In addition, links to the federal regulations are posted at: http://wsd.dli.mt.gov/apprenticeship/ (Montana Department of Labor and Industry web site) and at: http://www.access.gpo.gov/nara/cfr/cfr-table-search.html#page1 (National Archives and Records Administration web site).

8. Concerned persons may present their data, views, or arguments, either orally or in writing, at the hearing. Written data, views, or arguments may also be submitted to: Mark Maki, Apprenticeship Program, Workforce Services Division, Department of Labor and Industry, P.O. Box 1728, Helena, Montana 59624-1728; by facsimile to (406) 444-3037; or by e-mail to mmaki@mt.gov, and must be received no later than 5:00 p.m., November 26, 2010.

9. An electronic copy of this Notice of Public Hearing is available through the department's web site at http://dli.mt.gov/events/calendar.asp, under the Calendar of Events, Administrative Rules Hearings Section. The department strives to make the electronic copy of this Notice of Public Hearing conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered. In addition, although the department strives to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems, and that a person's difficulties in sending an e-mail do not excuse late submission of comments.

10. The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request, which includes the name and e-mail or mailing address of the person to receive notices, and specifies the particular subject matter or matters regarding which the person wishes to receive notices. Such written request may be mailed or delivered to the Department of Labor and Industry, attention: Mark Cadwallader, 1327 Lockey Avenue, P.O. Box 1728, Helena, Montana 59624-1728, faxed to the department at (406) 444-1394, e-mailed to mcadwallader@mt.gov, or may be made by completing a request form at any rules hearing held by the agency.

11. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.

12. The department intends to take final action on this proposal so that the amendments, adoptions, and repeals are effective no later than December 28, 2010.

13. The department's Hearings Bureau has been designated to preside over and conduct this hearing.

/s/ MARK CADWALLADER /s/ KEITH KELLY

Mark Cadwallader Keith Kelly, Commissioner

Alternate Rule Reviewer DEPARTMENT OF LABOR AND INDUSTRY

Certified to the Secretary of State October 18, 2010