Montana Administrative Register Notice 2-55-41 No. 23   12/08/2011    
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In the matter of the amendment of ARM 2.55.320 and 2.55.327A, pertaining to classifications of employments and the construction industry premium credit program










TO:  All Concerned Persons


1.  On January 27, 2012, the Montana State Fund proposes to amend the above-stated rules.


2.  The Montana State Fund will make reasonable accommodations for persons with disabilities who wish to participate in the rulemaking process and need an alternative accessible format of this notice.  If you require an accommodation, contact the Montana State Fund no later than 5:00 p.m. on December 30, 2011, to advise us of the nature of the accommodation that you need.  Please contact Nancy Butler, Montana State Fund, P.O. Box 4759, 855 Front Street, Helena, Montana 59604-4759; telephone (406) 495-5138; fax (406) 495-5023; or e-mail nbutler@mt.gov.


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



(3)  The State Fund staff shall assign its insureds to classifications contained in the classifications section of the State Compensation Insurance Fund Policy Services Underwriting Manual effective July 1, 2010 2011, and assign new or changed classifications as approved by the board.  That section of the manual is incorporated by reference.  Copies of the classification section of the manual may be obtained from the Insurance Operations Support Department of the State Fund, 855 Front Street, P.O. Box 4759, Helena, Montana 59604-4759.


AUTH:  39-71-2315, 39-71-2316, MCA

IMP:  39-71-2311, 39-71-2316, MCA


REASON: This amendment to ARM 2.55.320 is reasonably necessary at this time to reflect the updates to the State Fund's Underwriting Manual (manual), effective July 1, 2011. 

Under 39-71-2316(1)(e), MCA, after rules have been adopted, the State Fund is not subject to the rulemaking provisions of the Montana Administrative Procedure Act when changing classifications and premium rates.


The manual is used by State Fund staff in their usual duties of assigning classifications to insured employers of the State Fund.  Each of these classifications has a premium rate that is adopted by the State Fund board in accordance with the board's ratemaking authority.  This amendment is made each year to adopt the current version of the manual, which includes new rates, values, and classification code updates effective July 1, 2011.  The classification code updates may be those adopted by the Classification Review Committee established in Title 33, chapter 16, MCA, or by the State Fund board of directors.



(1) and (2) remain the same.

(3)  The following class codes are the construction codes eligible for the construction industry premium credit program:


3365      5059      5215      5445      5506      5651      6217      6400      9521

3719      5069      5221      5462      5507      5703      6229      7538      9534

3724      5102      5222      5472      5508      5705      6233      7601      9552

3726      5146      5223      5473      5511      6003      6251      7605

5020      5160      5348      5474      5535      6005      6252      7611

5022      5183      5402      5478      5537      6017      6306      7612

5037      5188      5403      5479      5551      6018      6319      7613

5040      5190      5437      5480      5610      6045      6325      7855

5057      5213      5443      5491      5645      6204      6365      8227

               (4) through (6) remain the same.


AUTH:  39-71-2315, 39-71-2316, MCA

IMP:  39-71-2211, 39-71-2311, 39-71-2316, 39-71-2330, MCA


REASON:  Section 39-71-2211, MCA, establishes a construction industry premium credit program.  The statute provides that State Fund may adopt the plan filed by the advisory organization designated in 33-16-1023, MCA, which is the National Council on Compensation Insurance (NCCI).  Currently, telephone company employees classified under code 7600 perform the same variety of tasks performed by employees assigned to code 7601 and contractors assigned to codes 7611, 7612, and 7613.  Research by NCCI showed great similarity in the nature of the work performed by the risks and exposure assigned to the reviewed codes; therefore, it was decided to delete codes 7601, 7611, 7612, 7613, and combine them in code 7600.  Code 7600 is not included in the rule because it is not an eligible classification code for the construction industry premium credit program.  The definition of "construction industry" contained in 39-71-116(8), MCA, requires the code to be in major group 23 in the North American Industry Classification System Manual.  Code 7600 is in major group 51.

NCCI's research also showed that the carpentry work for the two residential codes 5645 for one- or two-family homes, and 5651 for dwellings three stories or less, was so similar that it was decided to delete code 5651 and combine with code 5645.  The changes were recommended by NCCI as part of its national research project to ensure that the classification system remains healthy, viable, and responsive to the needs of the workers' compensation industry.  The class code changes were adopted by the Montana Classification Review Committee for use in Montana.  The Montana State Fund believes these changes make sense given the similarity of tasks performed by these workers.  The changes also simplify the class codes.


4.  Concerned persons may submit their data, views, or arguments concerning the proposed action in writing to Nancy Butler, Montana State Fund, P.O. Box 4759, 855 Front Street, Helena, Montana 59604-4759; telephone (406) 495-5138; fax (406) 495-5023; or e-mail nbutler@mt.gov.  Any comments must be received no later than 5:00 p.m., January 10, 2012.


5.  If persons who are directly affected by the proposed action wish to express their data, views, or arguments, orally or in writing at a public hearing, they must make a written request for a hearing and submit this request along with any written comments to Nancy Butler at the above address no later than 5:00 p.m., January 10, 2012.


6.  If the agency receives requests for a public hearing on the proposed action from either 10% or 25, whichever is less, of the persons who are directly affected by the proposed action; from the appropriate administrative rule review committee of the Legislature; from a governmental subdivision or agency; or from an association having not less than 25 members who will be directly affected, a hearing will be held at a later date.  Notice of the hearing will be published in the Montana Administrative Register.  Ten percent of those persons directly affected has been determined to be 2,700 persons based on 27,000 policyholders.


7.  The Montana State Fund 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, e-mail, and mailing address of the person and specifies that the person wishes to receive notices regarding the Montana State Fund.  If you prefer to receive notices by e-mail, please indicate this in your request.  Such written request may be mailed or delivered to Nancy Butler, Montana State Fund, P.O. Box 4759, 855 Front Street, Helena, Montana 59604-4759; faxed to the office at (406) 495-5023; e-mail nbutler@mt.gov; or may be made by completing a request form at any rules hearing held by the Montana State Fund.


8.  An electronic copy of this Notice of Proposed Amendment is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register.  The Secretary of State strives to make the electronic copy of the notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that if a discrepancy exists 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 Secretary of State works 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.


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



/s/ Nancy Butler                                        

Nancy Butler, General Counsel

Rule Reviewer



/s/ Elizabeth Best                                     

Elizabeth Best

Chair of the Board



/s/ Michael P. Manion                             

Michael P. Manion, Chief Legal Counsel

and Rule Reviewer


Certified to the Secretary of State November 28, 2011.


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