Administrative Rules of the State of Montana

BEFORE THE DEPARTMENT OF CORRECTIONS

OF THE STATE OF MONTANA

In the matter of the adoption of New Rule I pertaining to inmate worker savings subaccount

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NOTICE OF PUBLIC HEARING ON PROPOSED ADOPTION

TO: All Concerned Persons

1. On October 13, 2016, at 10:30 a.m., the Department of Corrections will hold a public hearing in the Small Meeting Room of the Lewis and Clark Library, in Helena, Montana, to consider the proposed adoption of the above-stated rule.

2. The Department of Corrections 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 of Corrections no later than 5:00 p.m. on October 7, 2016, to advise us of the nature of the accommodation that you need. Please contact Winnie Strainer, Department of Corrections, P.O. Box 201301, Helena, Montana, 59620-1301; telephone (406) 444-0439; fax (406) 444-4551; or e-mail WStrainer@mt.gov.

3. The rule as proposed to be adopted provides as follows:

NEW RULE I INMATE WORKER SAVINGS SUBACCOUNT (1) Inmates incarcerated in a state prison shall be subject to a minimum 20% savings deduction from their monthly earnings, which will be held in trust for each inmate and accounted for in savings subaccounts on the department trust accounting system.

(2) The savings deduction will be applied to an inmate's monthly earnings after accounting for all mandatory obligations. If taking a monthly savings deduction will render the inmate indigent as defined in department policy, no savings will be deducted for that month.

(3) For purposes of this rule, "monthly earnings":

(a) include funds received from the department for education, treatment, or work assignments;

(b) exclude funds received from outside sources including family and proceeds from hobby sales.

(4) Funds transferred to savings subaccounts will not be subject to additional deductions for child support or other obligations under 53-1-107(2), MCA.

(5) An inmate serving a life sentence without the possibility of parole may request the department to return funds deducted from the inmate's earnings and set aside in the savings subaccount.

(6) Funds in the savings subaccount may be used prior to release to pay re-entry expenses. All re-entry expenses to be paid prior to an inmate's release must be requested by the inmate in writing and approved by a designated department employee.

(7) Upon release from custody, the department shall return the balance of an inmate's savings subaccount to the inmate.

AUTH: 53-1-107, MCA

IMP: 53-1-107, MCA

REASON: Section 53-1-107, MCA, was amended in 2015 by S.B. 101 which mandated that an amount not to exceed 25% of an inmate worker's monthly earnings, net of applicable statutory deductions, be set aside in a savings subaccount for the inmate in the department's trust accounting system. The purpose of the funds deposited in the inmate worker savings subaccount is to assist the inmate to meet re-entry expenses when released from department custody, i.e., from a state prison as defined in 53-1-101(3)(c)(i) through (3)(c)(iii) and (3)(c)(v), MCA.

Inmate worker savings are not accessible to the inmate while in custody. S.B. 101 requires the department to adopt rules implementing the mandatory savings program. This rule is necessary to comply with that requirement.

While incarcerated in the state's prison facilities, inmates have paid work assignments, or they are paid while completing an education or treatment program. The work assignments for which an inmate may be eligible depend in large part on the inmate's security classification because the classification affects an inmate's freedom of movement within the facility. In the past, some inmates did not accumulate any savings and upon release from custody had little more than the gate money (not to exceed $100) provided them under 53-30-111, MCA.

Section (1) of the rule sets the percentage of the monthly inmate worker savings deduction at 20%. That percentage was chosen because the department believes it will allow sufficient savings to accumulate as to provide a meaningful resource upon the inmate's release but the percentage is not so great that, as a general rule, it would cause the inmate to drop to "indigent" status (as defined by department policy #4.1.4) while in custody. Indigent status triggers an obligation on the part of the department to pay for certain items for the indigent inmate (e.g., personal hygiene items, certain legal supplies) that non-indigent inmates must purchase at the facility's canteen with their own funds. Inmate indigency in secure facilities is contrary to the interests of the department. For that reason, the rule clarifies that if the mandatory savings deduction would render the inmate indigent the department will not deduct any savings during that month. The department determined that approach was preferable to deducting some lesser percentage that would not render the inmate indigent because the chosen approach creates a better record for verifying compliance with statutes and rules and helps to keep the inmate from perpetually being on the verge of indigency which would be inconsistent with the purpose of S.B. 101.

Section (2) is necessary to establish the relationship between and the respective priority of the deductions from inmates' funds under 53-1-107(2) and the inmate workers' savings deductions under 53-1-107(4), MCA. The department chose to limit the funds subject to the savings deduction to funds payable by the department for purposes of uniformity and timeliness of processing.

Section (3) is necessary to clarify what the term "monthly earnings" includes and excludes. The department deems the funds received by inmates from family members to be personal gifts that should not be subject to the mandatory savings deduction. It is the department's reasonable belief that family members expect their gifts to be available to the inmate recipients to use as they see fit. The inmate recipient of money from family members always has the option to voluntarily add gift monies to their savings subaccount under existing DOC policies. The department has also excluded hobby sale proceeds from the scope of "monthly earnings" for savings purposes because financial transactions involving hobby sales are governed by MCE Procedure #5.5.4. That procedure addresses issues that are unique to hobby sale proceeds. Hobby items made by inmates are regularly sold through retail stores outside the department's facilities. The department deems it to be in inmates' and the state's best interests not to interfere with or change hobby sale procedures involving retail businesses that sell inmates' hobby items to the public. Inmates are only allowed to receive money in department institutions from approved sources and that limitation necessitates a special procedure applicable to hobby sales made through retail outlets. Based on the foregoing, hobby sale proceeds are excluded from the applicability of the inmate worker savings deduction.

The inmate worker savings deduction mandated by 53-1-107(4), MCA, applies to the monthly earnings of inmate workers and inmate industry workers.

Section (4) is necessary in order to clarify that after the 53-1-107(2) and (4), MCA, deductions from inmates' trust accounts are made each month, no further deductions for the purposes in 53-1-107(2), MCA, may be made from the inmate savings subaccount balance in the same month. To do so would be inconsistent with department policies setting maximum deductions under 53-1-107(2), MCA. Maximums are set to ensure that inmates are not rendered indigent while in custody thereby triggering additional financial obligations on the part of the department.

Section (5) is necessary because an inmate serving a life sentence without the possibility of parole will not be released and therefore will not have re-entry expenses that need to be met using earnings in the inmate's savings subaccount created for that purpose. Currently the department's electronic financial accounting system cannot exempt any individual inmate's earnings from the mandatory savings deductions required under 53-1-107(4), MCA. The expense of IT services that would be needed to create an exemption from the operation of 53-1-107(4), MCA, would not be cost effective. There are relatively few inmates serving life sentences without the possibility of parole. For that reason, the department determined that the easiest way to exempt such inmates from the savings deduction would be for them to request return of the funds after they are deducted (i.e., request transfer of the funds from savings subaccount to the inmate's trust account where it is accessible to the inmate). Alternatively, the inmate may voluntarily leave the funds in the savings subaccount for eventual disbursement to the inmates' heirs or devisees. The intent of the department is that upon request by the inmate serving a life sentence without the possibility of parole, the earnings deducted under 53-1-107(4) will be promptly returned to the inmate's regular trust account without the necessity for any departmental review, exercise of discretion, or approval process.

Section (6) is necessary because the enabling statute, 53-1-107(4), MCA, authorizes the department, upon the inmate's release, to dispense money from the savings subaccount to the inmate's landlord or other approved recipients including service providers. The department believes that contemporaneously with the inmate's release, it has no further authority to dispense funds from the inmate's savings subaccount to anyone other than the former inmate. This rule is necessary to clarify that in some instances, funds will (at the inmate's request) be dispensed by the department prior to the inmate's release from custody to, for example, a landlord to hold an apartment pending the inmate's release or to a service provider to ensure availability of services upon release.

Section (7) is necessary to require that the balance in the inmate savings subaccount, less any outstanding checks dispensed as provided in (6), must be dispensed directly to the inmate upon the inmate's release.

4. 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: Michele Morgenroth, Department of Corrections, P.O. 201301, Helena, Montana, 59620-1301; telephone (406) 444-2828; fax (406) 444-4920; or e-mail mmorgenroth@mt.gov, and must be received no later than 5:00 p.m., October 21, 2016.

5. Lorraine Schneider, Department of Corrections, has been designated to preside over and conduct this hearing.

6. 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 4 above or may be made by completing a request form at any rules hearing held by the department.

7. 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.

8. The bill sponsor contact requirements of 2-4-302, MCA, apply and have been fulfilled. The primary bill sponsor was contacted by letter on July 14, 2015.

9. With regard to the requirements of 2-4-111, MCA, the department has determined that the adoption of the above-referenced rule will not significantly and directly impact small businesses.

/s/ Colleen E. Ambrose /s/ Mike Batista

Attorney Director

Rule Reviewer Department of Corrections

Certified to the Secretary of State September 12, 2016.