Montana Administrative Register Notice 42-2-919 No. 23   12/11/2014    
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In the matter of the adoption of New Rule I and the amendment of ARM 42.15.109, 42.15.110, 42.15.301, and 42.15.802 pertaining to the Montana family education savings program, income tax general provisions, and tax returns










TO: All Concerned Persons


1. On October 9, 2014, the Department of Revenue published MAR Notice No. 42-2-919 pertaining to the public hearing on the proposed adoption and amendment of the above-stated rules at page 2403 of the 2014 Montana Administrative Register, Issue Number 19.


2. On November 5, 2014, a public hearing was held to consider the proposed adoption and amendment. Wiley Barker, Crowley Fleck PLLP, and Jaret Coles, Montana Legislative Services, attended the hearing. No oral testimony was received. The department received written comments from Amy Jo Fisher, Montana Association of Realtors; Patrick Dougherty Esq.; Glenn Oppel, Montana Chamber of Commerce; Thomas Danenhower; Clarice Gates; and Louise Roumagoux.

3. The department has adopted New Rule I (42.15.808) and amended ARM 42.15.110, 42.15.301, and 42.15.802 as proposed.


4. The department is not amending ARM 42.15.109 at this time, based on the comments received regarding the notification process for the proposed amendment of the rule.


5. The department has thoroughly considered the comments received. A summary of the comments received and the department's response is as follows:


COMMENT 1: Regarding the proposed amendments to the residency rule and/or the way it was presented, the department received comments from Amy Jo Fisher, Montana Association of Realtors; Patrick Dougherty, Esq.; Glenn Oppel, Montana Chamber of Commerce; Thomas Danenhower; Clarice Gates; and Louise Roumagoux. 

The comments varied. There were statements that the proposed amendments are an invasion of privacy, that the department lacks legal authority to take the action, and/or that small businesses would be impacted. Some recommended the department propose the changes through legislation or reissue the notice of proposed amendments to the rule differently. Others provided alternative language for the department to consider using and some suggested that the department had attempted to bury or hide the proposed rule within other rules in the notice to avoid public participation. In all, the commenters either opposed the content of the proposed amendments to the residency rule, questioned the way the proposed amendments were published, or both.


RESPONSE 1: The department appreciates the feedback from all the commenters. While the department disagrees with several of the substantive arguments raised regarding the proposed residency rule amendments, in light of the concerns regarding transparency and the brief summary title used in the header of the proposal notice, the department will not proceed with the proposed amendments to ARM 42.15.109 at this time.

The department assures the commenters there was not an effort to hide or bury anything in the notice. Numerous other amendments unrelated to the Montana Family Education Act and IRC 529 plan were proposed and the residency rule was specifically identified in the public notice. The residency rule amendments were proposed in large part due to taxpayers' requests that the department provide more detail about what information the taxpayer can use to prove, or disprove, a residency status. These proposed amendments were therefore included within the notice in an attempt to provide such guidance as expeditiously as possible.

The department prepared the notice for the rules in MAR Notice No. 42-2-919 as it does with all rule notices. Using a Secretary of State (SOS) template, notices are assembled listing new rules first and amendments to current rules, in numerical order, next. Individual rule numbers are provided in the header of the notice along with a brief summary of what the rules generally pertain to. The rule-by-rule details are then provided in the body of the notice. The proposed amendments to ARM 42.15.109, regarding residency, begin on page two of seven.

When multiple rules from a chapter are proposed in a single notice, which is common, the brief summary is often a composition of the titles of the chapter and subchapters corresponding with the location of the rules in the Administrative Rules of Montana (ARM). The rules in this notice are found in ARM Title 42, chapter 15, Income Tax; and subchapters (1) General Provisions, (3) Tax Returns, and (8) Family Education Savings Act. Following the order of the rules in the notice, the brief summary for the header became "the Montana family education savings program, income tax general provisions, and tax returns." 

Given the concerns presented in the comments, the department will reevaluate the method it uses for its brief summary titles in future proposal notices to incorporate more detail.

The department strives for the greatest possible transparency regarding its rulemaking and always welcomes and appreciates public participation in the process. In fact, the department goes beyond the notification requirements of the Montana Administrative Procedure Act by voluntarily providing a public web page devoted to administrative rule activity and by routinely distributing notices of public hearings well in advance of the required amount of notice. The department electronically notified the registered interested parties regarding the proposed rulemaking actions in MAR Notice No. 42-2-919 on October 2, 2014, ten days sooner than 2-4-302(2), MCA, requires. 


However, in the interests of transparency and to ensure public participation by making sure all interested parties have an opportunity to appear, the department is withdrawing the proposed amendments to ARM 42.15.109 for consideration in the future.



/s/ Laurie Logan                                           /s/ Mike Kadas

Laurie Logan                                               Mike Kadas

Rule Reviewer                                             Director of Revenue



Certified to the Secretary of State December 1, 2014.



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