Administrative Rules of the State of Montana

BEFORE THE STATE COMPENSATION INSURANCE FUND

OF THE STATE OF MONTANA

In the matter of the amendment of ARM 2.55.320 and 2.55.327A, pertaining to classifications of employments and the construction industry premium credit program

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NOTICE OF PROPOSED AMENDMENT

NO PUBLIC HEARING CONTEMPLATED

TO: All Concerned Persons

1. On February 1, 2013, the Montana State Fund proposes to amend the above-stated rules.

2. The Montana State Fund will make reasonable accommodations for persons with disabilities who wish to participate in the rulemaking process and need an alternative accessible format of this notice. If you require an accommodation, contact the Montana State Fund no later than 5:00 p.m. on December 31, 2012, to advise us of the nature of the accommodation that you need. Please contact Nancy Butler, Montana State Fund, P.O. Box 4759, 855 Front Street, Helena, Montana 59604-4759; telephone (406) 495-5138; fax (406) 495-5023; or e-mail nbutler@mt.gov.

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

2.55.320 METHOD FOR ASSIGNMENT OF CLASSIFICATIONS OF EMPLOYMENTS (1) and (2) remain the same.

(3) The State Fund staff shall assign its insureds to classifications contained in the classifications section of the State Compensation Insurance Fund Policy Services Underwriting Manual effective July 1, ~~2011~~ 2012, and assign new or changed classifications as approved by the board. That section of the manual is incorporated by reference. Copies of the classification section of the manual may be obtained from the Insurance Operations Support Department of the State Fund, 855 Front Street, P.O. Box 4759, Helena, Montana 59604-4759.

AUTH: 39-71-2315, 39-71-2316, MCA

IMP: 39-71-2311, 39-71-2316, MCA

REASON: This amendment to ARM 2.55.320 is reasonably necessary at this time to reflect the updates to the State Fund's Underwriting Manual (manual), effective July 1, 2012.

Under 39-71-2316(1)(e), MCA, after rules have been adopted, the State Fund is not subject to the rulemaking provisions of the Montana Administrative Procedure Act when changing classifications and premium rates.

The underwriting manual is used by State Fund staff in their usual duties of assigning classifications to insured employers of the State Fund. Each of these classifications has a premium rate that is adopted by the State Fund board in accordance with the board's ratemaking authority. This amendment is made each year to adopt the current version of the manual, which includes new rates, values, and classification code updates effective July 1, 2012. The classification code updates may be those adopted by the Classification Review Committee established in Title 33, chapter 16, MCA, or by the State Fund board of directors. The entire underwriting manual is available on State Fund's web site at www.montanastatefund.com.

2.55.327A CONSTRUCTION INDUSTRY PREMIUM CREDIT PROGRAM

(1) and (2) remain the same.

(3) The following class codes are the construction codes eligible for the construction industry premium credit program:

2799 5057 5213 5443 5491 5645 6217 6400

3365 5059 5215 5445 5506 5703 6229 7538

3719 5069 5221 5462 5507 5705 6233 7605

3724 5102 5222 5472 5508 6003 6251 7855

3726 5146 5223 5473 5511 6005 6252 8227

5020 5160 5348 5474 5535 6017 6306 9521

5022 5183 5402 5478 5537 6018 6319 9534

5037 5188 5403 5479 5551 6045 6325 9552

5040 5190 5437 5480 5610 6204 6365

(4) through (6) remain the same.

AUTH: 39-71-2315, 39-71-2316, MCA

IMP: 39-71-2211, 39-71-2311, 39-71-2316, 39-71-2330, MCA

REASON: New class code 2799 (manufactured, modular, or prefab home setup, hookup, or installation at building site) is being added to the list of codes that are eligible for the construction industry premium credit program. Section 39-71-2211, MCA, establishes a construction industry premium credit program. The statute provides that State Fund may adopt the plan filed by the advisory organization designated in 33-16-1023, MCA, which is the National Council on Compensation Insurance (NCCI). The definition of "construction industry" contained in 39-71-116(9), MCA, requires the code to be in major group 23 in the North American Industry Classification System Manual. Code 2799 is in major group 23.

NCCI's research showed that new code 2799 establishes sufficient experience to determine its own loss cost or rate. While experience may be transferred from several other class codes, it is expected that most operations applicable to the new code 2799 were assigned to code 8380. Code 8380 is not a construction code, and applies to mobile, manufactured, modular, or prefabricated home dealers. New code 2799 applies to the setup or installation work of manufactured, modular, or prefabricated homes. The change was recommended by NCCI as part of its national research project to ensure that the classification system remains healthy, viable, and responsive to the needs of the workers' compensation industry. The class code change was adopted by the Montana Classification Review Committee for use in Montana.

4. Concerned persons may submit their data, views, or arguments concerning the proposed action in writing to Nancy Butler, Montana State Fund, P.O. Box 4759, 855 Front Street, Helena, Montana 59604-4759; telephone (406) 495-5138; fax (406) 495-5023; or e-mail nbutler@mt.gov. Any comments must be received no later than 5:00 p.m., January 11, 2013.

5. 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 a written request for a hearing and submit this request along with any written comments to Nancy Butler at the above address no later than 5:00 p.m., January 11, 2013.

6. If the agency receives requests for a public hearing on the proposed action from either 10% or 25, whichever is less, of the persons who are 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 persons directly affected has been determined to be 2,700 persons based on 27,000 policyholders.

7. The Montana State Fund 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, e-mail, and mailing address of the person and specifies that the person wishes to receive notices regarding the Montana State Fund. If you prefer to receive notices by e-mail, please indicate this in your request. Such written request may be mailed or delivered to Nancy Butler, Montana State Fund, P.O. Box 4759, 855 Front Street, Helena, Montana 59604-4759; faxed to the office at (406) 495-5023; e-mail nbutler@mt.gov; or may be made by completing a request form at any rules hearing held by the Montana State Fund.

8. An electronic copy of this Notice of Proposed Amendment 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 if a discrepancy exists 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 contact requirements of 2-4-302, MCA, do not apply.

/s/ Nancy Butler

Nancy Butler, General Counsel

Rule Reviewer

/s/ Elizabeth Best

Elizabeth Best

Chair of the Board

/s/ Michael P. Manion

Michael P. Manion, Chief Legal Counsel

and Rule Reviewer

Certified to the Secretary of State November 26, 2012.