BEFORE THE DEPARTMENT OF AGRICULTURE
OF THE STATE OF MONTANA
| In the matter of the adoption of New Rule I, amendment of ARM 4.10.101 through 4.10.103, and repeal of ARM 4.10.108 pertaining to financial responsibility | ) ) ) ) ) | NOTICE OF PUBLIC HEARING ON PROPOSED ADOPTION, AMENDMENT, AND REPEAL |
TO: All Concerned Persons
1. On December 11, 2018, at 1:00 p.m., the Department of Agriculture will hold a public hearing in Room 225 of the Scott Hart Building, 302 N. Roberts, Helena, Montana, to consider the proposed adoption, amendment, and repeal of the above-stated rules.
2. The Department of Agriculture 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 Department of Agriculture no later than 5:00 p.m. on December 7, 2018, to advise us of the nature of the accommodation that you need. Please contact Cort Jensen, Department of Agriculture, P.O. Box 200201, Helena, Montana, 59620-0201; telephone (406) 444-3144; fax (406) 444-5409; or e-mail [email protected].
3. The rule as proposed to be adopted provides as follows:
NEW RULE I REGULARLY ENGAGED IN THE BUSINESS (1) A farm applicator who receives over $30,000 in compensation in any of the last five years for pesticide application or who advertises as a pesticide applicator is regularly engaged in the business of pesticide application and must license as a commercial applicator.
AUTH: 80-8-105, MCA
IMP: 80-8-209, MCA
REASON: The new rule determines the level of payment requiring a farm applicator to license as a commercial applicator. The original law was unclear, but this amount was deemed sufficient by the department and indicates a person should have the training and financial responsibility of other commercial applicators.
4. The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:
4.10.101 FINANCIAL RESPONSIBILITIES (1) Applicants applying for a commercial pesticide applicator's license shall must provide, on forms approved by the department, proof of insurance in the amount required under (a). evidence of financial responsibility, establishing ability of applicant and/or his employees, to respond to and indemnify any persons for all damages to their person or property arising out of the use, misuse, or attempted use of application of pesticides, within the financial limits set forth below. Provided, however, that this requirement for financial responsibility has no application to, and cannot be subjected to pay for any injury or damage to the person or property of the landowner hiring the pesticide application.
(a) The minimum insurance financial responsibility shall must be in the amount of $50,000 one thousand five hundred dollars ($1,500.00) for aerial applicators, and $30,000 five hundred dollars ($500.00) for all other applicators.
(b) The insurance must cover damages to third parties caused by the unintentional violations of FIFRA.
(2) The department may require each applicator that experiences or causes chemical accidents or occurrences during one or more licensing periods, to increase his financial responsibility requirement up to and including ten thousand dollars ($10,000).
(3) An applicator possessing insurance coverage exceeding the requirements of this rule and its subsections, upon documentation approved by the department, shall be considered as meeting the requirements of this section.
(4)(2) Commercial seed treatment and elevator pest control applicators, whether at farm sites or their own business locations, vertebrate pest control applicators using ground applied baits, and public utilityutilities, and non-commercial applicators applying pesticides in or on properties managed by them are exempt from the financial responsibilities required in ARM 4.10.101 through 4.10.103. Demonstration and research pest-control applicators may be exempt from the financial responsibilities required in ARM 4.10.101 through 4.10.103 upon appropriate application for exemption duly approved by the department. The department will evaluate each applicant's situation as shown on the waiver application considering particularly the following factors: actual pesticide applications used by the applicant, the use of co-operators, the size of plots, and the hazards and drift potential of pesticides utilized. All applicators shall comply with the requirements in ARM 4.10.104 through 4.10.108, inclusive.
(5) An applicator whose financial responsibility requirements has been increased, but who has, for two consecutive spray seasons, operated without any pesticide accidents or occurrences of pesticide damage, may make application to the department to be allowed to revert back to the minimum financial requirements of ARM 4.10.101.
AUTH: 80-8-105, MCA
IMP: 80-8-214, MCA
REASON: The amended rule transitions the department out of accepting certificate of deposits/bonds as proof of financial responsibility and into using insurance. This move will protect the farmers and their neighbors who contract for pesticide services. The move may increase the cost of being a commercial applicator if the applicator was not already insured, but the exact amount of the increase will depend on factors outside the department's control.
4.10.102 TYPES AND CONDITIONS OF FINANCIAL RESPONSIBILITY
(1) In meeting the financial responsibility requirements of ARM 4.10.101, applicant shall have the option to utilize and provide any one or more of the following means: (a) policy of liability insurance; or (b) a surety bond; or (c) by a deposit of cash, or certificate of deposit, or deposit of bond or other obligations for the payment of which the full faith and credit of the United States or of this state are pledged, and which has the capability of being directly converted to legal tender by this department, and approved by the department, conditioned to indemnify the people of the state of Montana for all damages to property and/or injury or death to any person or persons as set forth in ARM 4.10.101. After a deposit is made pursuant to (c) above, and after a license has been issued conditioned thereon, the deposit may not be withdrawn except with the prior written consent of the department and any unauthorized withdrawal or attempt to so withdraw may subject all persons involved with the withdrawal or any attempt thereof, to a charge violating section 80-8-306 (1) MCA.
(a)(1) The insurance policy or surety bond options shall only be approved if must be issued by an insurance company or bonding company currently qualified to do business in the state of Montana, and which provides for chemical damage responsibility for each and every chemical or pesticide the applicator may choose to apply.
(b) The total aggregate liability of each insurer or surety for claims shall be limited to the face amount of the policy or surety bond, and not exceeding the limits of each applicant under ARM 4.10.101 in the event the face amount of the policy or bond exceeds the required limits, for the current year together with all unresolved or unpaid claims, timely filed, pending from previous calendar years coverage.
(2) The department may accept a liability insurance policy in the proper face amount that contains a deductible clause in an amount not to exceed five hundred dollars ($500.00) for all applicators. The department may allow a deductible greater than $500 if an application submits documentation that a deductible of $500 or less is not available from any insurer. This exception shall only must be based upon the lack of availability of the established deductible, not the increase or decrease in premium value of a higher deductible. When the deductible is greater than $500, the applicator shall be required to obtain a bond or an indemnity as specified in ARM 4.10.102 (1) (c) for any amount greater than $500. If the licensee has not satisfied the requirements of the deductible amount of any prior damage claim, such deductible clause in a currently submitted policy shall not be accepted by the department to satisfy the licensing requirements unless and until the application satisfies the prior damage claim. Insurance policies may have the pollution exclusion clause removed.
(3) The financial responsibility requirement imposed by ARM 4.10.101 must be maintained in full force and effect during each entire licensing period, except as provided in ARM 4.10.108. In the event of a lapse or termination in the means assuring financial responsibility, the applicator's license(s) shall will automatically terminate, coincidental in time with the lapse or termination of financial responsibility, and the licensee shall must immediately cease all applications of pesticides, and without further notice shall immediately return to the department, in person or by certified mail, all licenses issued to them him and/or their his employees for the current calendar year.; and failure Failure to so return shall constitutes a violation under ARM 4.10.208. In the event a previously licensed applicator whose license(s) was terminated by the provisions of this rule desires to have their his license reissued for the balance of the calendar year, they must he shall file a new application, accompanied by a new filing fee, and demonstrate to the satisfaction of the department that they he once again meets the financial responsibility requirements of ARM 4.10.101. and upon Upon re-approval by the department, an applicator's his license(s) may be reissued unless some other legal or regulatory cause exists for non-issuance.
AUTH: 80-8-105, MCA
IMP: 80-8-214, MCA
REASON: The amended rule transitions the department out of accepting certificate of deposits/bonds as proof of financial responsibility and into using insurance. This move will protect the farmers and their neighbors who contract for pesticide services.
4.10.103 APPROVAL, MODIFICATION, AND CANCELLATION OF FINANCIAL RESPONSIBILITY ELEMENTS (1) The department shall must ascertain that the means establishing financial responsibility filed by the applicant fully complies with the act, and fully satisfies the rules adopted thereunder, prior to issuance of any license. The information demonstrating financial responsibility shall must be submitted on forms of the type approved by the department. License application approval shall not be granted until a complete copy of the bond, verification of the indemnity trust fund deposit, or a certificate or binder of insurance coverage is filed along with the license application. The licensee shall must provide a complete copy of the insurance policy upon written request of from the department. In the event the applicator options to utilize a liability insurance policy as the means of establishing financial responsibility, then and in that event, the applicator has the duty and responsibility, to ascertain that the policy proposed to be submitted provides chemical damage coverage for every pesticide proposed to be applied during the licensing period. In the event the applicator's proposed policy of insurance contains exclusions against coverage of one or more chemicals the applicator proposed to apply, then and in that event, the applicator may submit the proposed insurance policy to provide such coverage as it affords. but the The applicator must, in addition thereto, provide evidence of financial responsibility to indemnify the public against chemical damage arising out of the use, misuse, or attempted use of each and every chemical proposed to be used or applied which is excluded from coverage of the proposed liability insurance policy. The amount of additional coverage shall must be in the minimum amount required under ARM 4.10.101 and the means to be utilized shall be the options provided in ARM 4.10.102 (1) (b) or (c).
(2) The department shall must be notified by registered mail ten (10) days prior to any proposed modification of the liability insurance policy or surety bond requested by the licensee. Such modification must be approved by the department before the proposed modification can become final. Ten (10) days' notice by registered mail to the department is required prior to the surety or insurer cancelling the licensee's surety bond or liability insurance, and prior to settlement of claims made against the licensee's bond or insurance. Modification of the indemnity trust fund, for any reason by any party, shall not be completed until the department has approved the proposed modification by written authorization to the licensee and the bank, trust, or other financial official or institution.
(a) If the financial responsibility is to be canceled, the requirements and procedures established in ARM 4.10.108 shall be followed.
AUTH: 80-8-105, MCA
IMP: 80-8-214, MCA
REASON: The amended rule transitions the department out of accepting certificate of deposits/bonds as proof of financial responsibility and into using insurance. This move will protect the farmers and their neighbors who contract for pesticide services.
5. The department proposes to repeal the following rule:
4.10.108 LICENSING PERIOD
AUTH: 80-8-105, MCA
IMP: 80-8-214, MCA
REASON: This rule defined how to handle certificate of deposits and bonds after a licensing period expired. It is no longer necessary and has no fiscal impact.
6. 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: Cort Jensen, Department of Agriculture, P.O. Box 200201, Helena, Montana, 59620-0201; telephone (406) 444-3144; fax (406) 444-5409; or e-mail [email protected], and must be received no later than 5:00 p.m., December 31, 2018.
7. Cort Jensen, Department of Agriculture, has been designated to preside over and conduct this hearing.
8. 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 6 above or may be made by completing a request form at any rules hearing held by the department.
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 adoption, amendment, and repeal of the above-referenced rules will significantly and directly impact small businesses. The rules proposed for amendment (ARM 4.10.101, 4.10.102, and 4.10.103) will increase the cost of being a commercial applicator if the applicator was not already insured, but the exact amount of the increase will depend on factors outside the department's control.
/s/ Cort Jensen /s/ Ben Thomas
Cort Jensen Ben Thomas
Rule Reviewer Director
Agriculture
Certified to the Secretary of State November 7, 2018.
