68th Legislature HB 156.1
1 HOUSE BILL NO. 156
2 INTRODUCED BY E. BUTTREY
3 BY REQUEST OF THE ECONOMIC AFFAIRS INTERIM COMMITTEE
4
5 A BILL FOR AN ACT ENTITLED: “AN ACT GENERALLY REVISING LAWS UNDER THE SUPERVISION OF
6 THE STATE AUDITOR; REVISING SECURITIES LAWS RELATING TO DISCLOSURE OF FINANCIAL
7 EXPLOITATION OF AN OLDER PERSON; AUTHORIZING THE SECURITIES ASSISTANCE RESTITUTION
8 FUND TO ASSERT CERTAIN CLAIMS FOR RESTITUTION; REVISING LAWS RELATING TO
9 COMMISSIONER ACCESS TO INSURANCE RECORDS; REVISING INSURANCE LAWS TO REMOVE
10 CERTAIN SERVICE OF PROCESS FEES; REVISING INSURANCE SERVICE OF PROCESS LAWS;
11 REVISING INSURANCE CERTIFICATE OF AUTHORITY LAWS; REQUIRING THE COMMISSIONER TO
12 MAKE AN APPROVED RISK LIST; REVISING THE PENALTY RELATING TO CERTAIN SURPLUS LINES
13 FILINGS; DEFINING "PHARMACY SERVICES ADMINISTRATIVE ORGANIZATION"; REVISING LAWS
14 RELATING TO PHARMACY SERVICES ADMINISTRATIVE ORGANIZATIONS; REVISING LAWS RELATING
15 TO FILINGS OF POLICY FORMS; REVISING LAWS RELATING TO THE APPOINTMENT OF FOREIGN OR
16 ALIEN SOCIETIES; REVISING LAWS RELATING TO THE BOARD OF DIRECTORS OF THE MONTANA
17 LIFE AND HEALTH INSURANCE GUARANTEE ASSOCIATION BOARD; REVISING LAWS RELATING TO
18 COMMERCIAL LINES POLICIES; REVISING LAWS RELATING TO THE FILING OF VARIABLE LIFE
19 INSURANCE CONTRACTS; REVISING PHARMACY SERVICES ADMINISTRATIVE ORGANIZATION LAWS;
20 REVISING DEFINITIONS; REVISING LAWS RELATING TO THE MONTANA REINSURANCE ASSOCIATION
21 ACT; ALLOWING THE COMMISSIONER TO PERFORM DUTIES OF THE ASSOCIATION ADMINISTRATOR;
22 REVISING MONTANA REINSURANCE ASSOCIATION BOARD POWERS AND COMMISSIONER DUTIES;
23 REVISING LAWS RELATED TO REINSURANCE ASSOCIATION REIMBURSEMENT, PAYMENT, AND
24 EXPENSES; DEFINING "TITLE GUARANTEE"; AUTHORIZING THE COMMISSIONER TO ORDER
25 RESTITUTION RELATED TO TITLE INSURANCE; REVISING LAWS RELATING TO IN-NETWORK AND
26 OUT-OF-NETWORK EMERGENCY SERVICES; REVISING LAWS RELATED TO UTILIZATION REVIEW
27 ORGANIZATIONS; REVISING LAWS RELATED TO STANDARDS FOR PROPERTY AND CASUALTY
28 INSURERS; PROVIDING FOR COVERAGE OF CERTAIN ORAL THERAPY PRESCRIPTIONS RELATED TO
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68th Legislature HB 156.1
1 OPIOID USE DISORDERS; TRANSFERRING STATUTORY DUTIES FROM THE DEPARTMENT OF PUBLIC
2 HEALTH AND HUMAN SERVICES TO THE COMMISSIONER OF SECURITIES AND INSURANCE
3 RELATING TO THE MANAGED CARE PLAN NETWORK ADEQUACY AND QUALITY ASSURANCE ACT;
4 AUTHORIZING THE COMMISSIONER TO TRANSFER EXISTING RULES RELATING TO THE ACT;
5 EXTENDING RULEMAKING AUTHORITY; AMENDING SECTIONS 15-31-114, 30-10-341, 30-10-1004, 33-1-
6 408, 33-1-605, 33-2-116, 33-2-312, 33-2-2402, 33-2-2404, 33-4-509, 33-7-531, 33-10-204, 33-15-336, 33-17-
7 1101, 33-20-606, 33-20-1316, 33-22-156, 33-22-170, 33-22-172, 33-22-173, 33-22-177, 33-22-1128, 33-22-
8 1303, 33-22-1307, 33-22-1308, 33-22-1309, 33-22-1313, 33-22-1314, 33-22-1315, 33-22-1316, 33-22-1317,
9 33-22-1321, 33-23-310, 33-25-105, 33-25-301, 33-32-215, 33-33-201, 33-33-202, 33-36-102, 33-36-103, 33-
10 36-105, 33-36-201, 33-36-203, 33-36-209, 33-36-210, 33-36-211, 33-36-212, 33-36-213, 33-36-301, 33-36-
11 302, 33-36-303, 33-36-304, 33-36-305, AND 33-36-401, MCA; REPEALING SECTIONS 33-2-322, 33-7-123,
12 AND 33-17-405, MCA; AND PROVIDING EFFECTIVE DATES.”
13
14 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
15
16 Section 1. Section 15-31-114, MCA, is amended to read:
17 "15-31-114. Deductions allowed in computing income. (1) In computing the net income, the
18 following deductions are allowed from the gross income received by the corporation within the year from all
19 sources:
20 (a) all the ordinary and necessary expenses paid or incurred during the taxable year in the
21 maintenance and operation of its business and properties, including reasonable allowance for salaries for
22 personal services actually rendered, subject to the limitation contained in this section, and rentals or other
23 payments required to be made as a condition to the continued use or possession of property to which the
24 corporation has not taken or is not taking title or in which it has no equity. A deduction is not allowed for salaries
25 paid upon which the recipient has not paid Montana state income tax. However, when domestic corporations
26 are taxed on income derived from outside the state, salaries of officers paid in connection with securing the
27 income are deductible.
28 (b) (i) all losses actually sustained and charged off within the year and not compensated by
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1 insurance or otherwise, including a reasonable allowance for the wear and tear and obsolescence of property
2 used in the trade or business. The allowance is determined according to the provisions of section 167 of the
3 Internal Revenue Code in effect with respect to the taxable year. All elections for depreciation must be the
4 same as the elections made for federal income tax purposes. A deduction is not allowed for any amount paid
5 out for any buildings, permanent improvements, or betterments made to increase the value of any property or
6 estate, and a deduction may not be made for any amount of expense of restoring property or making good the
7 exhaustion of property for which an allowance is or has been made. A depreciation or amortization deduction is
8 not allowed on a title plant as defined in 33-25-105(15).
9 (ii) There is allowed as a deduction for the taxable period a net operating loss deduction
10 determined according to the provisions of 15-31-119.
11 (c) in the case of mines, other natural deposits, oil and gas wells, and timber, a reasonable
12 allowance for depletion and for depreciation of improvements. The reasonable allowance must be determined
13 according to the provisions of the Internal Revenue Code in effect for the taxable year. All elections made under
14 the Internal Revenue Code with respect to capitalizing or expensing exploration and development costs and
15 intangible drilling expenses for corporate income tax purposes must be the same as the elections made for
16 federal income tax purposes.
17 (d) the amount of interest paid within the year on its indebtedness incurred in the operation of the
18 business from which its income is derived. Interest may not be allowed as a deduction if paid on an
19 indebtedness created for the purchase, maintenance, or improvement of property or for the conduct of business
20 unless the income from the property or business would be taxable under this part.
21 (e) (i) taxes paid within the year, except the following:
22 (A) taxes imposed by this part;
23 (B) taxes assessed against local benefits of a kind tending to increase the value of the property
24 assessed;
25 (C) taxes on or according to or measured by net income or profits imposed by authority of the
26 government of the United States;
27 (D) taxes imposed by any other state or country upon or measured by net income or profits.
28 (ii) Taxes deductible under this part must be construed to include taxes imposed by any county,
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1 school district, or municipality of this state.
2 (f) that portion of an energy-related investment allowed as a deduction under 15-32-103;
3 (g) (i) except as provided in subsection (1)(g)(ii) or (1)(g)(iii), charitable contributions and gifts that
4 qualify for deduction under section 170 of the Internal Revenue Code, 26 U.S.C. 170, as amended.
5 (ii) The public service commission may not allow in the rate base of a regulated corporation the
6 inclusion of contributions made under this subsection.
7 (iii) A deduction is not allowed for a charitable contribution using a charitable gift annuity unless the
8 annuity is a qualified charitable gift annuity as defined in 33-20-701.
9 (h) per capita livestock fees imposed pursuant to 15-24-921, 15-24-922, 81-6-104, 81-6-204, 81-6-
10 209, 81-7-118, or 81-7-201.
11 (2) In lieu of the deduction allowed under subsection (1)(g), the taxpayer may deduct the fair
12 market value, not to exceed 30% of the taxpayer's net income, of a computer or other sophisticated
13 technological equipment or apparatus intended for use with the computer donated to an elementary, secondary,
14 or accredited postsecondary school located in Montana if:
15 (a) the contribution is made no later than 5 years after the manufacture of the donated property is
16 substantially completed;
17 (b) the property is not transferred by the donee in exchange for money, other property, or services;
18 and
19 (c) the taxpayer receives a written statement from the donee in which the donee agrees to accept
20 the property and representing that the use and disposition of the property will be in accordance with the
21 provisions of subsection (2)(b).
22 (3) In the case of a regulated investment company or a fund of a regulated investment company,
23 as defined in section 851(a) or 851(g) of the Internal Revenue Code of 1986, 26 U.S.C. 851(a) or 851(g), as
24 that section may be amended or renumbered, there is allowed a deduction for dividends paid, as defined in
25 section 561 of the Internal Revenue Code of 1986, 26 U.S.C. 561, as that section may be amended or
26 renumbered, except that the deduction for dividends is not allowed with respect to dividends attributable to any
27 income that is not subject to tax under this chapter when earned by the regulated investment company. For the
28 purposes of computing the deduction for dividends paid, the provisions of sections 852(b)(7) and 855 of the
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1 Internal Revenue Code of 1986, 26 U.S.C. 852(b)(7) and 855, as those sections may be amended or
2 renumbered, apply. A regulated investment company is not allowed a deduction for dividends received as
3 defined in sections 243 through 245 of the Internal Revenue Code of 1986, 26 U.S.C. 243 through 245, as
4 those sections may be amended or renumbered."
5
6 Section 2. Section 30-10-341, MCA, is amended to read:
7 "30-10-341. Third-party disclosure -- immunity. (1) If a qualified individual, investment adviser,
8 investment adviser representative, or salesperson reasonably believes that financial exploitation of a vulnerable
9 person may have occurred, may have been attempted, or is being attempted, the qualified individual,
10 investment adviser, investment adviser representative, or salesperson may notify any third party closely
11 connected to the vulnerable person. Disclosure may not be made to a third party who is suspected of financial
12 exploitation or other abuse of the vulnerable person A qualified individual, investment adviser, investment
13 adviser representative, or salesperson may:
14 (a) notify a covered agency if the covered person believes that the financial exploitation of an older
15 person or a person with a developmental disability is occurring, has or may have occurred, is being attempted,
16 or has been or may have been attempted;
17 (b) notify any third party reasonably associated with an older person or a person with a
18 developmental disability if the covered person believes that the financial exploitation of an older person or a
19 person with a developmental disability is occurring, has or may have occurred, is being attempted, or has been
20 or may have been attempted. A third party reasonably associated with an older person or a person with a
21 developmental disability includes but is not limited to the following:
22 (i) a parent, spouse, adult child, sibling, or other known family member or close associate of an
23 older person or a person with a developmental disability;
24 (ii) an authorized contact provided by an older person or a person with a developmental disability
25 to the covered financial institution;
26 (iii) a co-owner, additional authorized signatory, or beneficiary of an older person or a person with
27 a developmental disability's account; and
28 (iv) an attorney-in-fact, trustee, conservator, guardian, or other fiduciary who has been selected by
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1 an older person, a person with a developmental disability, a court, a government agency, or a third party to
2 manage some or all of the financial affairs of the older person or the person with a developmental disability;
3 (c) choose not to notify any third party reasonably associated with an older person or a person
4 with a developmental disability of suspected financial exploitation of the older person or the person with a
5 developmental disability if the covered person believes the third party is, may be, or may have been engaged in
6 the financial exploitation of the older person or the person with a developmental disability.
7 (2) A qualified individual, investment adviser, investment adviser representative, or salesperson
8 who, in good faith and exercising reasonable care, complies with this section is immune from administrative or
9 civil liability that might otherwise arise from the disclosure."
10
11 Section 3. Section 30-10-1004, MCA, is amended to read:
12 "30-10-1004. (Temporary) Creation of securities restitution assistance fund. (1) There is an
13 account in the state special revenue fund to the credit of the commissioner for use only for securities restitution
14 assistance. This account may be referred to as the "securities restitution assistance fund" or "fund". The money
15 in the fund is statutorily appropriated, as provided in 17-7-502, to the commissioner for the purposes provided in
16 subsection (4) of this section.
17 (2) (a) The fund consists of amounts received by the commissioner from:
18 (i) persons who have violated any provision of parts 1 through 3 of this chapter;
19 (ii) persons who have voluntarily contributed to the fund; and
20 (iii) a portion of fees collected under 30-10-209(1)(b) as provided in 30-10-209(6)(b).
21 (b) Amounts received by the commissioner for deposit in the fund do not include administrative
22 penalties or fines imposed under this chapter and as referenced under the Montana Administrative Procedure
23 Act, Title 2, chapter 4, part 6.
24 (c) The amounts received for the fund may not be placed in the general fund.
25 (3) Amounts received by the commissioner for deposit in the fund must be promptly turned over to
26 the state treasurer for deposit in the fund created under subsection (1).
27 (4) The fund may be used by the commissioner only to pay awards of restitution assistance under
28 this part.
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1 (5) Whenever a claimant is paid from the securities restitution assistance fund pursuant to this
2 section, the securities restitution assistance fund is subrogated, to the extent of the payment to the claimant, to
3 the rights of the claimant to any restitution ordered by the court. The commissioner may, on behalf of the
4 securities restitution assistance fund, file any document in a court of competent jurisdiction to enforce this right.
5 (Terminates June 30, 2027--secs. 3, 4, Ch. 404, L. 2021.)"
6
7 Section 4. Section 33-1-408, MCA, is amended to read:
8 "33-1-408. Conduct of examinations -- records -- correction of accounts -- appraisals. (1) Upon
9 determining that an examination should be conducted, the commissioner or the commissioner's designee shall
10 issue an examination warrant appointing one or more examiners to perform the examination and instructing
11 them as to the scope of the examination. In conducting the examination, an examiner shall observe the
12 guidelines and procedures set forth in the examiners' handbook adopted by the NAIC. The commissioner may
13 also employ other guidelines or procedures as the commissioner considers appropriate.
14 (2) Every company or person from whom information is sought and its officers, directors,
15 employees, and agents shall provide to the examiners appointed under subsection (1) timely, con