Administrative Rules of the State of Montana

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�� BEFORE THE DEPARTMENT OF MILITARY AFFAIRS

�� OF THE STATE OF MONTANA

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In the matter of the adoption of New Rules I through VIII pertaining to the Montana military family relief fund

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NOTICE OF PROPOSED ADOPTION

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NO PUBLIC HEARING CONTEMPLATED

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TO:�All Concerned Persons

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1.�On January 18, 2008, the Department of Military Affairs proposes to adopt the above-stated rules.

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2.�The Department of Military Affairs 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 no later than 5:00 p.m., December 14, 2007, to advise us of the nature of the accommodation that you need.�Please contact Karen Revious, Administrator, Centralized Services, Department of Military Affairs, ATTN: Centralized Services, P.O. Box 4789, 1900 Williams Street, Fort Harrison, Montana 59636-4789; telephone (406) 324-3330; fax (406) 324-3335; or e-mail [email protected].

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3.�On August 23, 2007, the Department of Military Affairs published MAR Notice No. 34-7 at page 1157 of the 2007 Montana Administrative Register, issue no. 16.�No action has been taken on the proposed adoption because the Committee on State Administration and Veterans' Affairs has requested the proposed adoption be renoticed to correct deficiencies in the earlier notice.�This notice is published again to propose adoption of the new rules, with modifications to correct the deficiencies.�No action will be taken on the proposed adoption of the earlier publication.

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4.�The rules as proposed to be adopted provide as follows:

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NEW RULE I�DEFINITIONS�For purposes of this chapter, in addition to those definitions found in 10-1-1304, MCA, the following definitions apply:

(1)�"Active duty" has the meaning provided in 38 USC 1965(1)(A) and generally means full-time duty in the armed forces, other than active duty for training.

(2)�"Application" means MMFRF Form 1, MMFRF Form 2, or MMFRF Form 3, as applicable, and the supporting documentation required by these rules.

(3)�"National guard" has the meaning provided in 10-1-101, MCA.

(4)�"Reserve" means a Montana resident who is a member of a reserve component, as defined in 38 USC 101, of the United States armed forces.

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AUTH: �10-1-105, 10-1-1307, MCA

IMP: �10-1-1304, 10-1-1307, MCA

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REASON:�House Bill 179, passed during the 60th legislative session, now codified at 10-1-1301 through 10-1-1310, MCA, created a fund from which grants could be awarded to Montana National Guard and reserve members and/or family members.�� The legislation also authorized and required implementation of the grant program through adoption of administrative rules.�Proposed NEW RULE I, and other proposed rules in this rulemaking, constitute the department's proposal for implementing the legislative program.�It is reasonably necessary for the department to define words and phrases used within the proposed rules so those reading the rules have a common understanding of the words and phrases.�The approach used in defining the terms was to rely on statutory definitions from the Montana and United States Code where those definitions were controlling as to the particular term.�With respect to section (2), and the application forms, the department has designated the forms to be used as "MMFRF," Forms 1-3.�MMFRF Form 1 is the application for a status-based grant.�This form gathers the information required by 10-1-1305, 10-1-1306, and 10-1-1307, MCA, to determine eligibility for a status-based grant.�MMFRF Form 2 is the application for a needs-based grant.�MMFRF Form 2 gathers information required by 10-1-1305, 10-1-1306, and 10-1-1307, MCA, to determine eligibility for a needs-based grant.�MMFRF Form 3 is the application for a casualty-based grant.�This form gathers the information required by 10-1-1305, 10-1-1306, and 10-1-1307, MCA, to determine eligibility for a casualty-based grant.�

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NEW RULE II�APPLICATION FOR STATUS-BASED GRANT�(1)�The grant applicant must submit a completed MMFRF Form 1 to the Department of Military Affairs, ATTN: Centralized Services.

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AUTH: �10-1-105, 10-1-1307, MCA

IMP: �10-1-1305, 10-1-1307, 10-1-1308, MCA

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REASON:�Section 10-1-1307, MCA, requires that the department adopt rules covering grant eligibility through an application process.�In addition, 10-1-1305, MCA, provides allowable uses of funds for the three types of grants available under the program, and the first of these, the status-based grant, is covered by this rule.�As explained in the reason section following proposed NEW RULE I, use of the MMFRF forms will be authorized by this rulemaking to gather the information required by the statutes to determine eligibility for grants.�With respect to the subject area of proposed NEW RULE II, the department proposes to implement the collection of information for determining eligibility for status based grants through the use of MMFRF Form 1.�The information collected through the form will implement the requirements contained in 10-1-1305 and 10-1-1306, MCA, for this type of grant.�The statutes set limitations and requirements for status-based grants, including residency, activation for service, and pay grade.�It is reasonable and necessary for implementing the requirements from the statutes to adopt NEW RULE II because eligibility determinations should be based on written applications with the information provided by the applicant.�The rule will help to ensure that required information is obtained and recorded.�Other approaches, e.g., an interview process via person or telephone, would result in a nonstandardized process.�A standard process based on paperwork required as a matter of properly adopted administrative rules will assist both the department and potential applicants because the specific information that needs to be provided will be set out in a regularly used form.�

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NEW RULE III�APPLICATION FOR NEEDS-BASED GRANT�(1)�The grant applicant must submit:

(a)�A completed MMFRF Form 2 to the Department of Military Affairs, ATTN: Centralized Services.

(b)�With the completed MMFRF Form 2, the applicant must supply one, but may supply both, of the following to support the application:

(i)�a copy of a payroll record from the member's civilian employer that indicates the member's monthly salary plus a copy of a military payroll record that indicates the member's monthly salary; alternatively, the applicant must provide proof that the member's monthly military pay and allowances, combined, are at least 30% less than the member's monthly civilian wages or income; or

(ii)�proof that the member or family member is experiencing a significant emergency that warrants financial assistance, including, but not limited to, specific monetary expenses related to clothing, food, housing, utilities, medical services, medical prescriptions, insurance, or vehicle payments.�Such proof shall include, but is not limited to, a copy of a bill, invoice, estimate, cancellation notice, or any other similar record.

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AUTH: �10-1-105, 10-1-1307, MCA

IMP: �10-1-1305, 10-1-1307, 10-1-1308, MCA

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REASON:�As explained in the reason section following the proposed NEW RULE II, section 10-1-1307, MCA, requires that the department adopt a rule covering grant eligibility through an application process.�In addition, 10-1-1305, MCA, provides allowable uses for the three types of grants available under the program, and the second of these, the needs-based grant, is covered by this rule.�Per the statutory requirements, a needs-based grant is a grant given to a family member or a member activated for federal service in a contingency operation for at least 30 consecutive days who demonstrates that the member's military pay and allowances are at least 30% less than the member's civilian salary/wages prior to activation or that the member or family member is experiencing a significant financial emergency.�The statutory requirements should reasonably and necessarily be reflected in a form designated by rule.�As with proposed NEW RULE II, while the department could have chosen to collect the data via telephone or personal interview, using the MMFRF Form 2 assists the applicant in ensuring the data they wish to present in their application is given to and processed by the department.�Regarding the proposed NEW RULE III, section 1, subsections (1)(b)(i) through (ii), the department could have chosen to not provide any examples of what could prove needs-based grant eligibility.�However, the department wanted to provide applicants examples of proof which would allow them to meet the 10-1-1305, MCA, eligibility requirements.�The approach proposed by proposed NEW RULE III fulfills the requirement for an application process with respect to needs-based grants, and also implements the use requirements for needs-based grants.�The approach requires applicants to fill out the MMFRF Form 2, which requires submission of information on the following topics: military member's information, applicant's information, and proof of a qualifying financial situation as defined in 10-1-1305, MCA.�

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NEW RULE IV �APPLICATION FOR CASUALTY-BASED GRANT�(1)�The grant applicant must submit the following:

(a)�A completed MMFRF Form 3 to the Department of Military Affairs, ATTN: Centralized Services.

(b)�Proof of award of a Purple Heart.�

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AUTH: �10-1-105, 10-1-1307, MCA

IMP: �10-1-1305, 10-1-1307, 10-1-1308, MCA

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REASON:�As discussed in the previous reason sections, section 10-1-1307, MCA, requires that the department adopt rules covering grant eligibility through an application process.�In addition, 10-1-1305, MCA, provides allowable uses for the three types of grants available under the program, and the last of these, the casualty-based grant, is covered by this rule.�To accomplish the necessary implementation of the statutory requirements through reasonable means, the department has proposed NEW RULE IV providing for a form to verify the information that must be gathered to evaluate this type of grant application.�Per the statutory requirements, a casualty-based grant is a grant given to a member who sustains a nonfatal combat injury as a direct result of hostile action.�When deciding what proof should be required to prove casualty-based grant eligibility, the department considered requiring applicants to submit casualty reports, line of duty reports, or incident reports.�However, the casualty reporting requirements differ amongst the service branches, which caused the department to reject this option.�The department could have also required the member to submit the member's medical records.�This option was rejected due to the need to have personnel able and available to evaluate the records and make an eligibility determination.�The department chose to limit proof of casualty-based grant eligibility to proof of receipt of the Purple Heart in order to utilize the existing military procedure that already provides for the necessary determination.�This approach also eliminates the need for a review process at the state level, thus minimizing the need for further governmental review of the issue of the existence of a casualty.��

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NEW RULE V�SUBMISSION OF GRANT APPLICATIONS�(1)�Complete applications must be received by the Department of Military Affairs while the member is on active duty for federal service in a contingency operation.

(2)�Complete applications may be submitted via facsimile or e-mail.�The original complete application must be submitted before payments can be authorized and before the application is placed in the payment queue.

(3)�Incomplete applications will be returned to the applicant.

(4)�Upon receipt of a complete application, via facsimile, e-mail, or original, the Department of Military Affairs will verify the member's eligibility and Defense Enrollment Eligibility Reporting System (DEERS) enrollment.�Upon receipt of the original complete application, the Department of Military Affairs will process the complete application in an expeditious manner.�

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AUTH: �10-1-105, 10-1-1307, MCA

IMP: �10-1-1307, MCA

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REASON:�As previously discussed in the above reason sections, House Bill 179, passed during the 60th legislative session, created a fund from which grants could be awarded to Montana National Guard and reserve members and/or family members.�Section 10-1-1304(5), MCA, defines a "member," in pertinent part, as "�a member�who�is on active duty �."�Because "member" has this definition, the grant applications must be received while the member "is on active duty."�Regarding section (2), the department considered by what method the applications should be accepted:�facsimile, e-mail, or only the original.�The department chose to accept applications via facsimile or e-mail, in order to start verifying the member's and applicant's eligibility upon receipt of the application.�However, the department chose to require the original signature application prior to processing payment in order to maintain the integrity of the department's records.�The department chose to return incomplete applications, rather than possibly contacting the applicant via telephone or e-mail to request the missing data, as the department wants to maintain the integrity of the data gathered and rely upon the applicant's providing the required information in writing rather than telephonically or other means.�Upon receipt of an application, the department will verify that the member is on active duty in support of a contingency operation for more than thirty days (except for the casualty-based grant application which has no 30 day requirement) and that the applicant is enrolled in DEERS.�The department could have chosen to require the applicant to provide a copy of the member's orders and proof of DEERS enrollment, but chose to make the application process as easy as possible given the sacrifices the families of deployed servicemembers make.�Regarding the timeliness of application processing, the department could have chosen to set a firm time frame, such as within two weeks upon receipt of a completed application.�However, because the department chose to accept the responsibility of verifying the member's orders status and applicant's DEERS enrollment, and because the department has to rely on outside agencies to provide this data, the department could not specifically control the processing timeline and thus did not chose to implement a firm processing time.

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NEW RULE VI �NEEDS-BASED GRANT APPLICATION COMMITTEE REVIEW AND UTILIZATION OF INFORMATION ON OTHER STATE ASSISTANCE

(1)�With respect to review of needs-based grant applications, the review process may include consideration of other state assistance provided to the applicant.�Information on other state assistance available to any committee member through the agency records of the committee member may be considered, unless prohibited by applicable law on dissemination of such information.�Grant applicants may also be required to consent to release of information on other state assistance as a condition for qualifying for any needs-based grant.

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AUTH: �10-1-105, 10-1-1307, MCA

IMP: �10-1-1307, 10-1-1308, MCA

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REASON:�Section 10-1-1308, MCA, requires a three member committee to review needs-based grant applications:�the Director of the Department of Public Health and Human Services, or the director's designee, the Commissioner of the Department of Labor and Industry, or the commissioner's designee, and the budget director, or the budget director's designee.�The legislative purpose for having these specific agencies involved in the needs-based grant application review was to bring their experience and agency information to the decision table.�Accordingly, the department chose to adopt proposed NEW RULE VI which would allow the committee members to thoroughly review any legally disseminated information from their respective agencies to better evaluate the awarding of a needs-based grant in order to meet the legislative purpose behind the statute.

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NEW RULE VII�APPEAL OF GRANT APPLICATION DENIAL�(1)�The applicant must specifically address the basis for the original denial and provide further proof as to why the applicant's grant request should be approved.�Resubmission of the orginal application without additional proof will result in automatic denial of appeal.

(2)�The Adjutant General or his/her designee shall consider the applicant's appeal and inform the applicant of the decision.

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AUTH: �10-1-105, 10-1-1307, MCA

IMP: �10-1-1307, 10-1-1309, MCA

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REASON:�Section 10-1-1307, MCA, requires the department to adopt a rule setting the appeal process for grant applications that are denied.�The department could have chosen to adopt an appeal process based upon a second review of the original application, or based upon a new application submission, or any number of other appeal alternatives.�Because 10-1-1309, MCA, requires that the applicant be advised of the basis of the denial in writing, the department chose to require the applicant's appeal to specifically address the basis and provide proof as to why the basis is unfounded and that the grant should be approved.��

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NEW RULE VIII�GRANT PAYMENTS�(1)�Payments will be made to eligible members or family members.�Payments will not be made to creditors, and payments will be subject to applicable deductions.

(2)�If adequate funds are not available, the application will be held in a queue until funds are available.��

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AUTH: �10-1-105, 10-1-1307, MCA

IMP: �10-1-1307, MCA

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REASON:�As discussed above in the reason sections for the other proposed rules, House Bill 179, passed during the 60th legislative session, created a fund from which grants could be awarded to Montana National Guard and reserve military members and/or their families.�Because the purpose of the bill was to award the grant to members or family members, the department chose to limit payments to those persons, rather than third parties.�A prohibition on payments to third parties is reasonably necessary for implementation of this purpose.�Similarly, section 10-1-1307, MCA, mandated the department to adopt rules which treat similarly situated applicants equitably, to include rules on payment of grants if funds are insufficient to support a maximum authorized award.�Rather than developing a percentage based payment system which would be enacted if the fund reaches a certain level of funding, the department chose to adopt a rule which would hold the applications in a queue until funds become available to pay the maximum award.�The department determined this approach to most equitably treat similarly situated applicants because the applicants know they will receive the full amount of the grant when funds are available.

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5.�Concerned persons may submit their data, views, or arguments concerning the proposed action in writing to: Karen Revious, Administrator, Centralized Services, Department of Military Affairs, ATTN: Centralized Services, P.O. Box 4789, 1900 Williams Street, Fort Harrison, Montana 59636-4789; telephone (406) 324-3330; fax (406) 324-3335; or e-mail [email protected], and must be received no later than 5:00 p.m., December 21, 2007.

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6.�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 written request for a hearing and submit this request along with any written comments to Karen Revious at the above address no later than 5:00 p.m., December 21, 2007.

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7.�If the agency receives requests for a public hearing on the proposed action from either 10% or 25, whichever is less, of the persons 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 directly affected has been determined to be 425 based on the number of people or families eligible for the fund.

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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 sent 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.

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9.�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.

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10.�The bill sponsor notice requirements of 2-4-302, MCA, apply and have been fulfilled.�The primary bill sponsor was notified on September 13, 2007, by regular mail.

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/s/�John C. Melcher�� /s/�Randall D. Mosley��

John C. Melcher�� Randall D. Mosley

Assistant Attorney General�� The Adjutant General

Rule Reviewer�� Department of Military Affairs

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Certified to the Secretary of State November 13, 2007.