Montana Administrative Register Notice 37-738 No. 4   02/19/2016    
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In the matter of the amendment of ARM 37.107.117 pertaining to the reduction of application and renewal fees associated with the Montana Marijuana Act cardholder registry







TO: All Concerned Persons


          1. On March 10, 2016, at 1:30 p.m., the Department of Public Health and Human Services will hold a public hearing in the auditorium of the Department of Public Health and Human Services Building, 111 North Sanders, Helena, Montana, to consider the proposed amendment of the above-stated rule.


2. The Department of Public Health and Human Services 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 Department of Public Health and Human Services no later than 5:00 p.m. on March 3, 2016, to advise us of the nature of the accommodation that you need. Please contact Kenneth Mordan, Department of Public Health and Human Services, Office of Legal Affairs, P.O. Box 4210, Helena, Montana, 59604-4210; telephone (406) 444-4094; fax (406) 444-9744; or e-mail dphhslegal@mt.gov.


3. The rule as proposed to be amended provides as follows, new matter underlined, deleted matter interlined:


37.107.117 FEES (1) The department will assess the following fees:

(a) registered cardholder application fee of $75 $5;

(b) through (d) remain the same.

(e) annual registered cardholder renewal fee of $75 $5.

(2) through (4) remain the same.


AUTH: 50-46-344, MCA

IMP: 50-46-344, MCA




The Department of Public Health and Human Services (department) proposes to amend ARM 37.107.117 by decreasing Montana Marijuana Program (program) registry cardholder application and renewal fees to $5.00.  The proposed amendment is necessary because the current fee amounts charged to program registry cardholders, combined with the departmental efforts for prudent program expenditures and program staff reductions, have generated excess revenues. The program is charged only with generating "revenue sufficient to offset all expenses of implementing and administering this part" under 50-46-344(2), MCA.


Imposition of the current cardholder fee amount of $75 was necessary in 2012 to fund operation of the program, which had previously operated at a deficit of almost $500,000 over fiscal years 2011 and 2012.  That operational deficit was the result of the department implementing new program requirements that resulted from the passage of Senate Bill 423 (2011) and other changes to the Montana Marijuana Act. Despite historic and continuing cost and revenue estimations for operating the program, and prior fee rulemaking efforts, it is the periodic fluctuation in the number of cardholders – and the fees generated by the new or renewing cardholders – that determines whether a current application and renewal fee is sufficient for operation of the program.  The department can report that registry applications and fees paid have been greater than anticipated since 2013, rising by an average of 224 persons a month since October 2013.  The department foresees this trend likely to continue. Therefore, the lower proposed cardholder fee will reduce the program fund balance, while remaining equitable to current and former cardholders, and maintaining fiscal solvency for the program despite registry fluctuations.


The department considered waiving renewal fees for those cardholders currently on the registry, but determined this approach was not equitable to former cardholders who are no longer on the registry. In charging the same fee for both new applicants and renewal applicants, neither classification is favored resulting in fair treatment of both. Operating the program without the collection of any fees was considered but rejected. Collecting a fee will reduce database programming costs and will conform to the statutory requirements of generating revenue to offset all expenses of implementing and administering the Montana Marijuana Act.


The department also considered the cost of doing the background check and processing the provider/MIPP applications and additional expenses related to potential inspections to registered premises and determined these expenditures must be recovered for future provider/MIPP applicants. Therefore, the department is retaining the existing provider/MIPP fee of $50.00.


Fiscal Impact


Reducing fees for cardholders will reduce the program fund balance. It is anticipated that excess revenue generated in previous years in conjunction with the proposed revised reduced fee would be sufficient to operate the program for approximately four or five years. This assumption is based on current cash balance, comparable expenses, and revenue generated from a $5.00 fee. As of December 31, 2015, there were 13,431 cardholders on the registry. A $5.00 fee from these cardholders would generate $67,155 in revenue. Using the trend of 238 cardholders per month, the anticipated revenue for new cardholders would be $14,280 affecting 2,856 potential applicants.


          5. 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: Kenneth Mordan, Department of Public Health and Human Services, Office of Legal Affairs, P.O. Box 4210, Helena, Montana, 59604-4210; fax (406) 444-9744; or e-mail dphhslegal@mt.gov, and must be received no later than 5:00 p.m., March 18, 2016.


6. The Office of Legal Affairs, Department of Public Health and Human Services, has been designated to preside over and conduct this hearing.


7. 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 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 5 above or may be made by completing a request form at any rules hearing held by the department.


8. 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.


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


10. With regard to the requirements of 2-4-111, MCA, the department has determined that the amendment of the above-referenced rule will not significantly and directly impact small businesses.



/s/ Susan Callaghan                              /s/ Richard H. Opper                            

Susan Callaghan, Attorney                    Richard H. Opper, Director

Rule Reviewer                                       Public Health and Human Services


Certified to the Secretary of State February 8, 2016.


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