BEFORE THE DEPARTMENT OF REVENUE

OF THE STATE OF MONTANA

 

In the matter of the adoption of New Rules I and II, amendment of ARM 42.38.102 and 42.38.103, transfer of ARM 42.38.104, 42.38.203, and 42.38.206, and repeal of ARM 42.38.204 pertaining to unclaimed property

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

 

TO: All Concerned Persons

 

1. On September 21, 2015, at 11 a.m., the Department of Revenue will hold a public hearing in the Third Floor Reception Area Conference Room of the Sam W. Mitchell Building, located at 125 North Roberts, Helena, Montana, to consider the proposed adoption, amendment, transfer, and repeal of the above-stated rules. The conference room is most readily accessed by entering through the east doors of the building.

 

2. The Department of Revenue 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, advise the department of the nature of the accommodation needed, no later than 5 p.m. on September 11, 2015. Please contact Laurie Logan, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-7905; fax (406) 444-3696; or e-mail [email protected].

 

3. The rules as proposed to be adopted provide as follows:

 

NEW RULE I RURAL ELECTRIC OR TELEPHONE COOPERATIVES - DETERMINATION OF UNCLAIMED PROPERTY EXEMPT FROM ESCHEATMENT

(1) Unclaimed patronage refunds of a rural electric or telephone cooperative are not presumed abandoned under 70-9-803, MCA, if the cooperative, upon the action of the board of trustees:

(a) maintains the unclaimed patronage refunds in a separate account or fund, which can only be used for educational purposes in the cooperative's community;

(b) does not include the amount of the unclaimed patronage refunds in the cooperative's general fund ledger;

(c) demonstrates the existence of established written guidelines, policies, and procedures granting the use of the unclaimed patronage refunds for educational purposes only; and

(d) records and substantiates all disbursements of the unclaimed patronage funds.

(2) Unclaimed patronage refunds held in the separate account or fund set forth in (1) can remain in the account or fund and accumulate to provide for educational expenditures that are greater than the annual amount deposited into the account or fund.

(3) For patronage refunds issued in a calendar year, the distribution date is December 31, of the year the patronage refund is issued.

 

AUTH: 70-9-828, MCA

IMP: 35-18-316, 70-9-803, MCA

 

REASON: The department proposes adopting New Rule I to clarify when a patronage refund issued by a rural electric or telephone cooperative is not presumed abandoned property for the purposes of 70-9-803, MCA, and to coordinate the distribution date in 70-9-803, MCA, with the distribution date in 35-18-316, MCA.

As proposed, the new rule will provide the circumstances when unclaimed patronage refunds in a cooperative will not be presumed abandoned and therefore not subject to escheatment to Montana.

 

NEW RULE II NONUTILITY COOPERATIVES - DETERMINATION OF UNCLAIMED PROPERTY EXEMPT FROM ESCHEATMENT (1) Unclaimed shares in a nonutility cooperative are not presumed abandoned under 70-9-803, MCA, if the cooperative, upon the action of the board of trustees:

(a) maintains the unclaimed shares in a separate account or fund, which can only be used for charitable or civic purposes in the cooperative's community;

(b) does not include the amount of the unclaimed shares in the cooperative's general fund ledger;

(c) demonstrates the existence of established written guidelines, policies, and procedures granting the use of the unclaimed shares for charitable or civic purposes only; and

(d) records and substantiates all disbursements of the shares.

(2) Unclaimed shares held in the separate account or fund set forth in (1) can remain in the account or fund and accumulate to provide for charitable or civic expenditures that are greater than the annual amounts deposited into the account or fund.

 

AUTH: 70-9-828, MCA

IMP: 70-9-803, MCA

 

REASON: The department proposes adopting New Rule II to clarify when unclaimed shares issued by a nonutility cooperative will not be presumed abandoned property for the purposes of 70-9-803, MCA, which sets forth the presumptions of abandonment. 

As proposed, the new rule will provide the circumstances when unclaimed shares in a cooperative will not be presumed abandoned and therefore not subject to escheatment to Montana.

 

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

 

42.38.102 APPLICABILITY (1) remains the same.

(2) Holders required to report and deliver abandoned property in their possession to the Department of Revenue include but are not limited to:

(a) banks, trust companies, savings banks, and other banking organizations;

(b) credit unions, savings and loan associations, and other financial organizations;

(c) corporations, partnerships, medical facilities, insurance companies, cooperatives, and other business associations; and

(d) courts, public offices, agencies, and political subdivisions of Montana or the United States. 

 

AUTH: 70-9-828, MCA

IMP: 70-9-803, 70-9-804, MCA

 

REASON: The department proposes amending ARM 42.38.102 to strike the language in (2) and move and define the term "holder" as proposed in ARM 42.38.103 below.

 

42.38.103 DEFINITIONS The following definitions apply to this chapter:

(1) "Items of property" as used in the Uniform Unclaimed Property Act, with respect to money or funds, generally means amounts in a single account. Interest or earnings are part of the principal and are part of the "items of property".

(2) An "item" is an account in a financial institution regardless of the number of deposits made by the owner or accruals on the account. Other "items" include but are not limited to:

(a) unclaimed dividends declared but held for payment, annually or otherwise, for an absent owner of stock certificates of a corporation;

(b) ownership certificates of a corporation held for distribution to an owner, solely or jointly; and

(c) individual accounts made up of public utility deposits or refunds.

(1) "Finder" means an individual, company, or corporation that locates owners of unclaimed property and assists them in retrieving the property for a fee or commission.

(2) "Holder" has the meaning given in 70-9-802, MCA, and includes, but is not limited to, financial institutions, corporations, partnerships, limited liability companies, cooperatives, business associations, courts, governmental entities, and political subdivisions.

(3) "Memorandum" means, but is not limited to, the following:

(a) a confirmation letter or card signed by the owner;

(b) a personal letter or inquiry from the owner;

(c) a note in the holder's file that the owner discussed the account or property with the holder or holder's employee in person or by telephone; or

(d) a written or verbal communication (evidenced by a note in the holder's file) between the holder and the owner of multiple accounts regarding knowledge of all accounts, active and dormant, that generate regular statements or notices to the owner.

 

AUTH: 70-9-828, MCA

IMP: 70-9-801, 70-9-802, 70-9-803, MCA

 

REASON: The department proposes amending ARM 42.13.103 to add a customary definitions rule lead-in statement that provides the context for the terms being defined.

The department further proposes striking terms not currently used in the unclaimed property rules, defining terms found in the proposed new rules in this notice, relocating relevant terms from the proposed repeal of ARM 42.38.204 into this rule to locate all unclaimed property rule definitions together, and adding 70-9-801, MCA, as an implementing citation because it provides for the Uniform Unclaimed Property Act.

 

5. The department proposes transferring the following rules:

 

42.38.104 (42.38.220) PRESUMPTION OF OWNERSHIP

 

AUTH: 70-9-828, MCA

IMP: 70-9-802, 70-9-805, MCA

 

42.38.203 (42.38.305) CLAIMS FOR RECOVERY OF PROPERTY DELIVERED TO STATE 

 

AUTH: 70-9-828, MCA

IMP: 70-9-815, 70-9-825, MCA

 

42.38.206 (42.38.310) CLAIMS OF PROPERTY BY FINDERS

 

AUTH: 70-9-828, MCA

IMP: 70-9-825, MCA

 

REASON: The department proposes transferring ARM 42.38.104, 42.38.203, and 42.38.206, as part of a reorganization of ARM Title 42, chapter 38, Abandoned Property. For consistency with the term used in statute, the chapter will be renamed Unclaimed Property. For ease of reference by users, the newly named chapter will also be separated into three subchapters titled (1) General Provisions, (2) Holder Reporting, and (3) Owner Claims. These three rules will be transferred by subject matter accordingly.

 

6. The department proposes repealing the following rule:

 

42.38.204 DEFINITIONS 

 

AUTH: 70-9-828, MCA

IMP: 70-9-802, MCA

 

REASON: The department proposes repealing ARM 42.38.204 and placing all definitions for terms related to unclaimed property together in ARM 42.38.103, to provide the definitions for unclaimed property rules together in a single location as part of the reorganization of ARM Title 42, chapter 38.

 

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: Laurie Logan, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-7905; fax (406) 444-3696; or e-mail [email protected] and must be received no later than October 5, 2015.

 

8. Laurie Logan, Department of Revenue, Director's Office, has been designated to preside over and conduct this hearing.

 

9. The Department of Revenue 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 and e-mail or mailing address of the person to receive notices and specifies that the person wishes to receive notice regarding a particular subject matter or matters. Notices will be sent by e-mail unless a mailing preference is noted in the request. A written request may be mailed or delivered to the person in 7 above or faxed to the office at (406) 444-3696, or may be made by completing a request form at any rules hearing held by the Department of Revenue.

 

10. An electronic copy of this notice is available on the department's web site at revenue.mt.gov/rules. The department strives to make the electronic copy of this 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. While the department also strives to keep its web site accessible at all times, in some instances it may be temporarily unavailable due to system maintenance or technical problems.

 

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

 

12. With regard to the requirements of 2-4-111, MCA, the department has determined that the adoption, amendment, transfer, and repeal of the above-referenced rules will not significantly and directly impact small businesses.   Documentation of the department's determination is available online at revenue.mt.gov/rules, or upon request from the person in 7.

 

 

/s/ Laurie Logan                          /s/ Mike Kadas

Laurie Logan                               Mike Kadas

Rule Reviewer                             Director of Revenue

         

Certified to the Secretary of State August 17, 2015.