BEFORE THE STATE AUDITOR AND COMMISSIONER OF INSURANCE

OF THE STATE OF MONTANA

�

�

TO: All Concerned Persons

�

1. On April 17, 2008, at 10:00 a.m., the State Auditor and Commissioner of Insurance will hold a public hearing in the 2nd floor conference room of the State Auditor's Office, 840 Helena Ave., Helena, Montana, to consider the proposed adoption of the above-stated rules.

�

2. The State Auditor and Commissioner of Insurance 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., April 10, 2008, to advise us of the nature of the accommodation that you need. Please contact Darla Sautter, State Auditor's Office, 840 Helena Avenue, Helena, Montana, 59601; telephone (406) 444-2726; TDD (406) 444-3246; fax (406) 444-3497; or e-mail [email protected].

�

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

�

NEW RULE I PURPOSE AND SCOPE��(1) This subchapter implements for the department and the Department of Revenue the mechanisms provided in Title 17, chapter 4, MCA, for recovery and offset of monetary sums owing to the state of Montana, including, but not limited to, sums related to the provision of services through the programs administered by the department and fines and other fees imposed by the department.

(2) The provisions of this subchapter are not the department's exclusive means of debt collection, but are in addition to any other means of offset, recovery, or other debt collection procedures authorized by law.

�

AUTH: 30-10-107, 33-1-313, MCA

IMP: 17-3-110, MCA

�

NEW RULE II DEFINITIONS For the purpose of this subchapter, the following definitions shall apply:

(1) "Debt" means a monetary sum owed to the state of Montana.

(2) "Department" means the State Auditor's Office.

(3) "Offset" means a deduction from monies due to a person or entity from the state for the purpose of recovering in total or in part a debt owed by the person or entity to the state. An offset is undertaken by the Department of Revenue or other agency designated by law under the authority of 17-4-105, MCA. Offset may include, but is not limited to, an offset of a person's or an entity's state tax refund.

(4) "Recovery" means any measure undertaken by the Department of Revenue, or other agency designated by law, under the authority of 17-4-101, MCA, et seq., in accordance with that agency's rules and policies as a means of recovering a debt owed by a person or entity to the state of Montana. Recovery may include, but is not limited to, assignment to a collection agency and litigation.

�

AUTH: 30-10-107, 33-1-313, MCA

IMP: 17-4-110, MCA

�

NEW RULE III REFERRAL FOR RECOVERY AND OFFSET (1) The department under the authority of 17-4-104, MCA, may refer to the Department of Revenue, or other agency designated by law, for recovery and offset of any debt owed to the department.

(2) The department must determine that a debt is uncollectible by the department before the debt may be referred to the Department of Revenue or other agency designated by law.

�

AUTH: 30-10-107, 33-1-313, MCA

IMP: 17-4-110, MCA

�

NEW RULE IV UNCOLLECTIBLE DEBT (1) A debt is uncollectible by the department if the department has determined that:

(a) the debt is owing to the department;

(b) the debtor has either not pursued available administrative remedies within the department, or has failed to prevail in the available administrative procedures or remedies within the department, or in any appeal from that administrative procedure or remedy to the state or federal courts;

(c) the debtor has failed to pay the debt after the department has made reasonable efforts to collect the debt; and

(d) the department has no administrative means such as recoupment from current payments by which to recover the debt.

(2) The department has made all reasonable efforts to collect a debt when the debt remains owed in whole or in part after:

(a) the department has utilized appropriate notices directed at the debtor's last known address to inform the debtor of the debt owed and the debtor cannot be contacted; or

(b) the department has provided the debtor with an opportunity to enter into a repayment agreement based on a schedule for debt repayment that the department determines is appropriate, and the debtor has failed to cooperate, or the debtor is failing to repay the debt.

(3) A debtor is failing to repay a debt when the debtor has failed to make a monthly or other payment for which the department has mailed notice of delinquency, including a demand for cure of the delinquency within ten days from the date of mailing.

�

AUTH: 30-10-107, 33-1-313, MCA

IMP: 17-4-110, MCA

�

4. REASONABLE NECESSITY STATEMENT: The proposed rules are intended and designed to enable the State Auditor's Office to implement and carry out a process compliant with 17-4-110, MCA, which allows the collection and enforcement of assessments of fees, fines, and other monies owed to the State Auditor's Office.

Delegation of collection efforts, in the manner described in further detail in these proposed rules, from the State Auditor to the Department of Revenue is necessary because the Montana Legislature is providing and allocating sufficient resources to the Department of Revenue as the centralized agency for the collection of debt owed to the state of Montana and its political subdivisions, branches of government, and other entities entrusted with sovereign functions on its behalf to ensure a uniform and effective procedure for the collection of such monies.

Delegation of the collection efforts is further necessary because the State Auditor's Office does not always have appropriate resources to conduct collection proceedings. Delegation to the Department of Revenue in compliance with the statutory requirements of 17-4-110, MCA, ensures that monies owed to the State Auditor, and thus to the state of Montana, are in fact collected and placed in the state's general fund or other appropriate account for the benefit of the people of Montana. Pursuant to 30-10-107, MCA, this rule is in the best interests of the public.

The proposed rules provide for a reasonable assessment of uncollectibility, as required by 17-4-110, MCA, as well as appropriate safeguards for the debtor before delegation may be perfected.

�

5. Concerned persons may submit their data, views, or arguments concerning the proposed action either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to Helge Naber, Staff Attorney, State Auditor's Office, 840 Helena Ave., Helena, Montana, 59601; telephone (406) 444-2040; fax (406) 444-3497; or e-mail [email protected], and must be received no later than 5:00 p.m., April 24, 2008.

�

6. Helge Naber, Staff Attorney, has been designated to preside over and conduct this hearing.

�

7. The department maintains a list of concerned 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 mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Such written request may be mailed or delivered to Darla Sautter, State Auditor's Office, 840 Helena Ave., Helena, Montana, 59601; telephone (406) 444-2726; fax (406) 444-3497; or e-mail [email protected] 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 notice requirements of 2-4-302, MCA, apply and have been fulfilled. The bill sponsor was notified by letter dated January 18, 2008, sent postage prepaid by the USPS.

�

�

�

/s/ Christina L. Goe����������������������/s/ Janice S. VanRiper

Christina L. Goe��������������������������Janice S. VanRiper

Rule Reviewer���������������������������� Deputy Insurance Commissioner

��������������������������������������������������State Auditor/Commissioner of Insurance

�

Certified to the Secretary of State March 17, 2008.