BEFORE THE DEPARTMENT OF REVENUE

OF THE STATE OF MONTANA

 

In the matter of the amendment of ARM 42.12.301, 42.12.302, and 42.12.307, and the repeal of ARM 42.12.303 and 42.12.306 pertaining to resort areas, resort determinations, and resort licenses

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT AND REPEAL

 

TO: All Concerned Persons

 

1. On January 22, 2020, at 10:00 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 amendment 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, please advise the department of the nature of the accommodation needed, no later than 5 p.m. on January 3, 2020. Please contact Todd Olson, Department of Revenue, Director's Office, P.O. Box 7701, Helena, Montana 59604-7701; telephone (406) 444-7905; fax (406) 444-3696; or [email protected].

 

3. GENERAL STATEMENT OF REASONABLE NECESSITY. The 2019 Montana Legislature passed Senate Bill 358 (SB 358), which became law on May 7, 2019. SB 358 adopts and implements 16-4-211 through 16-4-213, MCA, amends other statutes located in Title 16, chapter 4, MCA, and repeals 16-4-202, MCA, pertaining to resort areas, resort determinations, and resort licenses.

The department finds it necessary to propose amendments to ARM 42.12.301, 42.12.302, and 42.12.307, and to repeal ARM 42.12.303 and 42.12.306 to implement SB 358. Generally, the department proposes amendments to the rules which reflect changes in legislative policy, how resort areas are determined, resort license application and hearing processes, and resort area operations. Several internal reference and implementing citation amendments are also proposed throughout the rulemaking which are necessary for the administrative rules to align with SB 358's new statutes or statutory amendments.

 

While this general statement of reasonable necessity covers the basis for the following proposed rulemaking actions, it is supplemented below to explain

rule-specific changes.

 

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

 

42.12.301 RESORT LICENSES (1) The issuance of resort all-beverages licenses pursuant to 16-4-202 16-4-213, MCA, is governed by all other applicable provisions of Title 16, MCA, and the rules of the department.

(2) A resort area, as determined by the department, includes establishments whose business and operation is designed to attract and accommodate visitors to a recreational development. The primary purpose of the recreational development must not be the sale of alcoholic beverages. The department shall consider economic factors in the approval of a proposed "resort area" and whether the recreational development is designed to stimulate and promote the recreational and sporting industry. 

(3) (2) Other non-resort licenses are allowed within a defined resort area and such licenses are not considered for purposes of determining the number of allowable resort all-beverages licenses.

(4) For the purposes of 16-4-202, MCA, accommodation units are a type of lodging in which the unit can be separately locked by the occupant and contains sleeping, bathing, and toilet facilities. The primary purpose of such units must be to accommodate visitors.

(3) The delivery of alcoholic beverages to guests staying in accommodation units located on the resort area is permissible provided the employees of the holder of the resort license deliver the alcoholic beverages.

(4) The delivery of alcoholic beverages to resort area accommodation units on a resort area is not permissible:

(a) by any non-resort licensee whose business is located on the resort area;

(b) to any other location on the resort area other than accommodation units; or

(c)  where otherwise prohibited by retail sales restrictions provided in Title 16, chapters 3, 4, and 6, MCA.

(5) The licensee shall maintain records of all alcoholic beverage deliveries made on the resort area. The delivery records must be retained for three years. The records shall include:

(a) the date and time the delivery occurred;

(b) the quantities and brands of alcoholic beverages delivered;

(c) the address of the accommodation unit;

(d) the name of the employee delivering the alcoholic beverages; and

(e) the name of the individual who accepted the alcoholic beverages at the time of delivery.

 

AUTH: 16-1-303, MCA

IMP: 16-4-201, 16-4-202 16-4-213, MCA

 

REASONABLE NECESSITY: Section (1) proposes to replace a statutory authority reference which is necessary because 16-4-202, MCA, was repealed in SB 358.

Sections (2) and (4) are proposed to be stricken because the purpose of resort areas and the definition of accommodation units are provided in 16-4-211 and 16-4-213, MCA, respectively. This content does not need to be repeated in rule. Section (3) will be renumbered as (2).

Proposed (3), (4), and (5) contain operating conditions requirements for resort licensees where the delivery of alcoholic beverages is permitted to accommodation units. Section 16-4-213, MCA provides that the delivery of alcoholic beverages is allowed to accommodation units on the designated resort area only if the purchaser is present, the purchaser's age is verified, and the purchaser is not intoxicated. In these sections, the department proposes to clarify the necessity of how the deliveries need to occur to comply with statute. Section (3) proposes to require the resort licensee to use their own employees to deliver the alcoholic beverages. Employees of any licensee are required to comply with the Responsible Alcohol Sales and Service Act. Requiring the resort licensee's employees to deliver the alcoholic beverages is necessary and consistent with state-approved processes for confirming an individual's age and whether the individual is intoxicated. Section (4) proposes to list prohibited alcoholic beverages delivery examples because delivery of alcoholic beverages is limited to accommodation units which are defined as short-term guest rentals. Providing examples of impermissible deliveries is necessary to detail the department's policy regarding how a licensee conducts alcoholic beverage deliveries. Section (5) proposes to establish requirements for delivery records retention. The department believes the records retention requirements are necessary because alcoholic beverage delivery is a new privilege to any retail licensee, and the department believes the sales and delivery records retention support a resort licensee's delivery requirements compliance. The list of items included in (5)(a) through (e) are proposed to confirm compliance.

 

42.12.302 DEFINITIONS The following definitions apply to this subchapter:

(1) through (7) remain the same.

 

AUTH: 16-1-201, 16-1-303, MCA

IMP: 16-1-201, 16-4-201, 16-4-202 16-4-213, 16-4-301, MCA

 

42.12.307 RESORT AREA DETERMINATION APPLICATION PROCESS

(1) As required by 16-4-202, MCA, the department must schedule a hearing within seven days of receipt of the resort plat.

(2) The following plat documents are necessary to determine if the resort area meets the minimum requirements to schedule a hearing:

(1) A developer or landowner seeking a resort area designation shall submit to the department:

(a) a completed application for resort area determination;

(b) the resort a plat verified as accurate by the resort area developer or landowner or master plan of the resort area;

(c) an appraisal of the resort area from an appraiser attesting to the value details of the recreational resort facilities that are or will be within the resort area, as that definition is described in ARM 42.12.302;

(d) processing fees as provided in ARM 42.12.111; and

(e) financial statement of resort developer and all known operators of proposed establishments within the resort area; and

(f) (e)  overall plan for resort development including a statement from resort developer verifying control of the resort area any additional information the department may request.

(2) The valuation must be not less than $1,000,000, and at least half of which valuation must be for a structure or structures within the resort area.

(3) The department shall determine the appraised market value of the resort area. 

(4)  If the developer or landowner disagrees with the department's determination of actual market value, the applicant can submit its own appraisal for department consideration.

(3) (5) If the documents in (2) (1) above are not provided, the department will notify the applicant developer or landowner of the missing items and request submission by a specific deadline prior to the hearing date. If the documents are not received timely, the application will be returned and not considered for licensing.

(4) If the documents in (2) above are provided, a hearing will be scheduled and public notice will be provided as required in 16-4-202, MCA.

 

AUTH: 16-1-303, MCA

IMP: 16-4-202 16-4-212, MCA

 

REASONABLE NECESSITY:  In addition to the general statement of reasonable necessity provided at the beginning of this notice, the department proposes to amend ARM 42.12.307 as follows:

Current (1) is proposed to be stricken because 16-4-212, MCA, now provides when the department must schedule a hearing and this reference is obsolete. The department proposes to strike current (2) and replace it with proposed (1) to list the required documents and information that must be submitted for a resort area determination. These requirements are currently located in ARM 42.12.306 and described in 16-4-212, MCA. The department proposes to repeal ARM 42.12.306 and include all required information within this rule, which the department believes is necessary for ease of reference and clarity about procedural requirements.

            The department proposes (2) to reiterate the statutory requirement in 16-4-212, MCA, regarding the valuation threshold of resort area structures. The department believes this intentional redundancy is necessary for ease of applicant referencing since most department processes are found in administrative rule. The department also believes the reference to structure or structures in rule are necessary because the term "structure" is found in ARM 42.12.301 and the department intends to maintain that definition for consistency.

            Section (3) proposes to require the department to appraise the market value of the resort area. The department believes this amendment necessary because the department employs individuals specialized in appraising property, and by placing the obligation on the department and its data, this may reduce developer or landowner appraisal costs. 

            Section (4) proposes to allow the developer or landowner the opportunity to submit its own appraisal if they disagree with the department's appraisal, which the department believes is necessary in the event of a dispute regarding the department's valuation of the resort area.

            Section (5) is proposed for amendment to reference "developer" or "landowner" rather than "applicant," which is consistent with the resort statutes. The department proposes to clarify the necessity that additional documentation requested by the department must be received prior to the hearing.

           

5. The department proposes to repeal the following rules:

 

42.12.303 APPRAISAL

 

AUTH: 16-1-303, MCA

IMP: 16-4-201, 16-4-202, MCA

 

REASONABLE NECESSITY:  The department proposes repealing ARM 42.12.303 and incorporating the content into ARM 42.12.307. The department believes the repeal necessary because rule content pertaining to appraisals of proposed resort areas is better fitted in ARM 42.12.307 which is about resort areas.

 

42.12.306 FINANCIAL RESPONSIBILITY 

 

AUTH: 16-1-303, MCA

IMP: 16-4-201, 16-4-202, MCA

 

REASONABLE NECESSITY:  The department proposes repealing ARM 42.12.306 and incorporating the content into ARM 42.12.307. The department believes the repeal necessary because rule content pertaining to the required information for determination of a resort areas is better fitted in ARM 42.12.307 which is about resort areas.

 

           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: Todd Olson, 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 January 31, 2020.

 

7. Todd Olson, Department of Revenue, Director's Office, has been designated to preside over and conduct the hearing.

 

8. 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, which 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 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 6 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.

 

9. An electronic copy of this notice is available on the department's web site at www.mtrevenue.gov, or through the Secretary of State's web site at sosmt.gov/ARM/register.

 

10. The bill sponsor contact requirements of 2-4-302, MCA, apply and have been fulfilled. The primary bill sponsor was contacted by email on August 8, 2019 and on December 6, 2019.

 

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

 

 

/s/ Todd Olson                                              /s/ Gene Walborn                                        

Todd Olson                                                   Gene Walborn

Rule Reviewer                                              Director of Revenue

 

Certified to the Secretary of State December 17, 2019.