BEFORE THE MONTANA ARTS COUNCIL
TO: All Concerned Persons
1. On April 11, 2012, at 10:30 a.m., the Montana Arts Council will hold a public hearing at 830 N. Warren Street, First Floor, in Helena, Montana, to consider the proposed amendment and repeal of the above-stated rules.
2. The Montana Arts Council will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice. If you require an accommodation, contact the Montana Arts Council no later than 5:00 p.m. on April 4, 2012, to advise us of the nature of the accommodation that you need. Please contact Kristin Burgoyne, Montana Arts Council, P.O. Box 202201, Helena, Montana, 59620-2201; telephone (406) 444-6449; fax (406) 444-6548; or e-mail mac@mt.gov.
3. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:
10.111.701 ELIGIBLE APPLICANTS (1) Any person, association, or representative of a governing unit may submit an application for funding of a cultural and aesthetic project from the income of the trust fund. The term "governing unit" includes state, regional, county, city, town, or Indian tribe. The governing unit may itself seek funds or sponsor the application of other persons, organizations, associations or coalitions of organizations.
(a) The applicant is defined as the governing unit submitting the application and having fiscal and legal responsibility for the project.
(b) The benefitting organization is defined as the organization directly benefitting from the grant whether it is the applicant or another organization, association or coalition of organizations.
AUTH: 22-2-303, MCA
IMP: 22-2-301, MCA
10.111.702 APPLICATION FORM FOR GRANT PROPOSALS (1) The committee shall have prepared a standard application form for grant proposals to the committee. and shall include requests for information from the benefitting organization concerning the following:
(a) Sponsorship by the governing unit whereby the unit indicates the availability of accounting and financial services and responsibilities for the proposal, if funded;
(b) A narrative description of the project;
(c) A statement specifying the community, regional or statewide need addressed by the project;
(d) A statement of the purpose of the project which shall include objectives and a timeline for intended results;
(e) A statement addressing the means and methods for implementation of the project;
(f) A statement of the end result of the project as intended by the benefitting organization, and a plan for evaluation upon termination of the project;
(g) A statement describing the audiences, area and population to be served;
(h) A statement addressing project publicity and accessibility;
(i) Resumes or descriptions of related experience or expertise of staff or volunteers;
(j) A complete line item budget request to include planned expenditures of granted funds and a statement of available or supplementary source(s) of funding and in-kind or matching contributions;
(i) In-kind goods and services are contributions specifically identified with the project which are provided to the benefitting organization by volunteers or their parties at no cash cost to the benefitting organization. These may include but are not limited to donations of food and housing for guest artists and speakers, office space, facilities or equipment rental, and materials voluntarily contributed which otherwise would have been paid for. Volunteer time may be claimed as an in-kind contribution, but it must be calculated at a "fair market" price, that is, minimum wage that a person paid to do the same work would be paid. The in-kind contribution used as a match for a particular project may not be used as a match for any other project requesting cultural and aesthetic project grant assistance.
(ii) Matching funds are funds (other than any cultural and aesthetic grants) which are allocated or received by the benefitting organization during the two fiscal years of the grant period and used exclusively for the project receiving cultural and aesthetic grant funds.
(iii) For all grants with the exception of challenge grants for permanent endowment development, documentation that matching funds are being committed by the benefitting organization or will be available, must be received by the last day of the first fiscal year of the grant period.
(iv) For challenge grants for permanent endowment development, documentation of match must be received by the last day of the grant period.
(v) County or municipally owned cultural facilities must obtain financial and in-kind support from respective local governments.
(vi) Effective July 1, 1985 and pursuant to, 22-2-308 MCA and these rules, government units may apply on behalf of private museums, art centers and cultural facilities and receive the first grant without local governmental funds, but are encouraged to seek mill levy, general fund or other local governmental financial or in-kind support.
(A) For all subsequent grants, private museums, art centers or other cultural facilities must receive county or municipal financial or in-kind support to be eligible for funds.
(vii) A cultural facility is defined as a building or number of buildings operated significantly for the purpose of presenting public programs and activities in one or more of the eligible projects.
(A) The benefitting organization must provide information regarding the ownership of the cultural facility, i.e., private profit making, private non-profit, city, county, state or federal.
(B) The benefitting organization must provide documentation from the local government regarding:
(I) The source of local governmental funds, i.e., city or county, and the type of local governmental funds, e.g., general funds, revenue sharing, community block grant, permissive mill levy, etc.
(II) The level of cash support. If mill levy funds have been appropriated, indicate the number of mills and the dollar amount this millage annually provides for the benefitting organization's facility and the total mills and dollar amount this millage annually provides for all cultural facilities in the county.
(III) The value of in-kind support including what is being contributed and the source of the contribution.
(IV) If any indirect costs are included in the budget, the benefitting organization must indicate if these costs are to be used as match or if they are intended to be paid from coal tax funds.
(k) Additional information may be required by the committee of the benefitting organization.
AUTH: 22-2-203, MCA
IMP: 22-2-303, 22-2-308, MCA
10.111.704 ELIGIBLE PROJECTS (1) Grant proposals must be for the purpose of protecting works of art in the state capitol or other cultural and aesthetic projects, including but not limited to the visual, performing, literary and media arts, history, archaeology, folk-lore, archives, libraries, historical preservation and the renovation of cultural facilities. Applicants may apply for funds in one or more of the following categories:
(a) Special projects: Specific activities, services, or events of limited duration and the expansion of ongoing programs to meet defined needs and support for grants which generate new sources of revenue.
(i) Generally each Each dollar in project grants should must be matched with one dollar in cash or in-kind goods and services.
(ii) Benefitting organizations Applicants will be required to submit a project budget. and an organizational operations budget for the grant period. If grant funds are being requested for a project which has been conducted in prior years, financial statements of the project from the most recent two full years must be provided.
(b) Operational support for cultural institutions that have been in existence for at least two years.
(i) It is not the intention for operational support grants to reduce the applicant's fund raising efforts or to support program expansion.
(ii) In special circumstances, applications for operational support may be considered.
(iii) The benefitting organization will be required to demonstrate a need which may include:
(A) the development of emerging cultural institutions;
(I) An emerging cultural institution is in the early stages of development, i.e., formally organized for at least two years with an on-going program and generally with paid professional staff.
(B) organizations with unusually high expenses without available local funding sources;
(C) organizations which serve the entire state or a significant sub-state region;
(D) well managed and established organizations in confronting emergency situations;
(E) organizations which are recognized as essential to Montana's cultural life because of their excellence of programming and longevity of service to the state;
(F) organizations which provide a high ratio of cash match to grant request.
(iv)(i) Generally each Each dollar in general support grants should must be matched with one dollar in cash or in-kind goods and services.
(v)(ii) Benefitting organizations Applicants will be required to submit financial statements (profit and loss) for the most recently completed two fiscal years:.
(A) the prior two fiscal years,
(B) actual and budgeted expenses and income for the current year, and
(C) budgets for the grant period.
(vi) For applications of $20,000 or more in operational support, submission of a current audit of the benefitting organization is required. If none exists, an unaudited financial review signed by an independent accountant will suffice. Where the benefitting organization is an agency of state or local government and the audit performed includes the entire agency, a copy of such audit will suffice.
(A) A financial review consists principally of inquiries of organization personnel and analytic procedures applied to financial data. It is substantially less in scope than in audit and thereby no opinion is expressed.
(B) The accompanying report should state that the accountant is not aware of any material modifications that should be made to the financial statements in order for them to be in conformance with generally accepted principles, other than those modifications, if any, indicated in the report.
(c) Capital expenditure projects for additions to a collection or acquisition of works of art, artifacts or historical documents; historic preservation or the construction or renovation of cultural facilities.
(i) Each dollar in capital expenditure projects grants must be matched with three dollars in cash or in-kind goods and services.
(i)(ii) Any application for funds which may in any way affect prehistoric or historic properties must document cooperation with the state historic preservation office in evaluating the possible impact on these properties and the appropriateness of plans for project activity.
(ii)(iii) A letter from the state historic preservation office, stating their recommendations and any agreements reached with the benefitting organization applicant is necessary. No funds will be released until such a letter is received by the Montana Arts Council.
(iii) Benefitting organizations will be required to provide three dollars in cash or in-kind donations of goods and services specifically for the capital expenditure project for each grant dollar.
(iv) Applications requesting funds for facility acquisition, construction, or renovation will need to include:
(A) a financial statement of the operational costs of the facility from the most recently completed fiscal year prior to the date of application deadline summary of the total cost of the capital expenditure from beginning to end;
(B) operational budgets of the facility for the first full year after the completion of the project;
(C) information about sources and amounts of funds already committed and anticipated to be received; and
(E)(C) plans for obtaining the balance of funds based on prior fund raising efforts;.
(F) the expected duration of the facility renovation or construction.
(d) Challenge grants for permanent endowment development to benefit cultural nonprofit grant applicants may be recommended for funding.
AUTH: 22-2-303, MCA
IMP: 22-2-303, 22-2-308, MCA
10.111.706 EVALUATION CRITERIA (1) Evaluation criteria is established in the application and guidelines. Recommendations for funding of individual applications must be based upon evaluation of the following considerations:
(a) Quality of the project:
(i) whether the technical, artistic and administrative abilities and experience of the benefitting organization, its staff and/or volunteers makes probable the completion and implementation of the project within the grant period;
(ii) whether the project is creative or innovative, practical or beneficial, and whether the project may stimulate other projects.
(b) Cultural impact of the project:
(i) whether the project may contribute to or improve the cultural life or development of the community, county, region or state;
(ii) whether the project addresses an identified need within the proposed area, and establishes, maintains or augments an activity or service;
(iii) whether the project has stated goals that are within the resource capability of the benefitting organization and whether there is a reasonable likelihood that the goals will be attained;
(iv) whether the project has benefit, availability and accessibility to the public.
(c) Cost factors of the project:
(i) the need for project, operational, capital or endowment development support;
(ii) the cost-effectiveness of the project;
(iii) the relative level of local support as demonstrated by cash match from local sources or in-kind goods and services;
(iv) the level of cost-sharing as reflected in the mix of earned income, private contributions, governmental support and interest income;
(v) the potential of the project to stimulate other sources of funding or to become self-supporting;
(vi) the probability of accomplishing the project within budget and with available resources.
AUTH: 22-2-303, MCA
IMP: 22-2-302, 22-2-306, MCA
10.111.707 CRITERIA FOR RECOMMENDATIONS (1) Committee recommendations to the Legislature of those projects which meet the evaluation criteria to the extent possible also must address the following considerations:
(a) Geographical diversity - taken as a whole, grants should assist the entire state;
(b) Cultural diversity - recognizing the special needs of access to cultural and aesthetic projects and services and the unique perspective, skills, talents and contributions of the wide variety of the people of Montana, the grants recommended, taken as a whole, should reflect and affirm that diversity, and as such, provide enrichment to the population at large. These projects should encourage the expansion of opportunities for all Montanans to create, participate in, and appreciate the wide range of all cultural and aesthetic activities regardless of age, sex, race, ethnic origin, income, physical and mental ability, or place of residence.; and
(c) Project diversity - a variety of different interests and disciplines within the eligible projects should be served and which also may include, but not be limited to, the following:
(i) service to local communities or counties, multicounty regions, and the state;
(ii) service to urban and rural populations;
(iii) special projects, operational support, and capital expenditures and endowment development; and
(iv) single sponsors and those representing coalitions of a number of organizations.
(d) Cost diversity - consideration will be given to projects requesting both large and small amounts of funding.
AUTH: 22-2-303, MCA
IMP: 22-2-302, 22-2-306, MCA
4. The department proposes to repeal the following rules:
10.111.705 CHALLENGE GRANTS FOR PERMANENT ENDOWMENT DEVELOPMENT, is found on page 10-1355 of the Administrative Rules of Montana.
AUTH: 22-2-303, MCA
IMP: 22-2-301, 22-2-308, 22-2-309, MCA
10.111.708 INCREMENTAL DISBURSEMENTS OF GRANTS, is found on page 10-1360 of the Administrative Rules of Montana.
AUTH: 22-2-303, MCA
IMP: 22-2-305, 22-2-306, MCA
5. STATEMENT OF REASONABLE NECESSITY: Grant application requirements have changed and the rules must be changed to be consistent with the new requirements. When the administrative rules were first established in 1991, the average Cultural Trust grant was $18,200. In the current biennium, the average grant is $8,000. This decrease of 56% in the average is due to the decrease in interest earnings on the trust. Plus, in six of the last seven biennia, there has been an additional shortfall, which has further reduced the amount of funds actually received by grantees. The applications for the current biennium were the first to be completed and submitted online. The Montana Arts Council conducted an extensive survey of applicants following the initial online application process and the revisions recommended by the constituency are reflected in these rule changes, which simplify the process. Many of the applications are from rural and all-volunteer organizations which do not have professional grant writing staff and this rule change will aid them by streamlining the application process.
ARM 10.111.704 has been amended for clarity only. Subsection (1)(c)(iii) has been moved up to (c)(i) in order to be consistent with the match requirement order in the other grant categories. Financial information requested has been simplified and standardized to make the application process easier and to allow the advisory committee to review that information in a manner that is more even and consistent.
6. STATEMENT OF FISCAL IMPACT: These rule changes have no fiscal impact.
7. Concerned persons may submit their data, views, or arguments either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to: Kristin Burgoyne, Montana Arts Council, P.O. Box 202201, Helena, Montana, 59620-2201; fax (406) 444-6548; or e-mail mac@mt.gov, and must be received no later than 5:00 p.m., April 19, 2012.
8. Ann Gilkey, Chief Legal Counsel for the Office of Public Instruction, has been designated to preside over and conduct this hearing.
9. The Montana Arts Council 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 that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to the contact person in 7 above or may be made by completing a request form at any rules hearing held by the department.
10. An electronic copy of this proposal notice 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 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 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.
11. The bill sponsor contact requirements of 2-4-302, MCA, do not apply
/s/ Ann Gilkey /s/ Arlynn Fishbaugh
Ann Gilkey, Chief Legal Counsel Arlynn Fishbaugh, Executive Director
Office of Public Instruction Montana Arts Council
Rule Reviewer
Certified to the Secretary of State March 12, 2012.
