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1 HOUSE BILL NO. 239
2 INTRODUCED BY M. THIEL, E. TILLEMAN, S. GIST, B. LER, G. OBLANDER
3
4 A BILL FOR AN ACT ENTITLED: “AN ACT REVISING LAWS RELATED TO CONSTRUCTION
5 CONTRACTORS; TRANSFERRING CONSTRUCTION CONTRACTOR REGISTRATION TO A DEPARTMENT
6 LICENSING PROGRAM; PROVIDING A PURPOSE; PROVIDING DEFINITIONS; PROVIDING RULEMAKING
7 AUTHORITY; PROVIDING LICENSING REQUIREMENTS; PROVIDING FOR UNPROFESSIONAL
8 CONDUCT; PROVIDING FOR FEES AND FINES; PROVIDING FOR PENALTIES FOR VIOLATIONS;
9 AMENDING SECTIONS 18-2-413, 18-2-414, 37-1-401, 39-9-101, 39-9-102, 39-9-206, 39-9-207, 39-9-301, 39-
10 9-303, AND 39-71-401, MCA; REPEALING SECTIONS 39-9-201 AND 39-9-204, MCA; AND PROVIDING A
11 DELAYED EFFECTIVE DATE.”
12
13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
14
15 NEW SECTION. Section 1.
16 health, safety, and welfare of the public through the regulation of construction contractors.
17
18 NEW SECTION. Section 2. As used in [sections 1 through 8], the following definitions
19 apply:
20 (1) “Construction contractor” means a person, firm, or corporation that:
21 (a) in the pursuit of an independent business, offers to undertake, undertakes, or submits a bid to
22 construct, alter, repair, add to, subtract from, improve, move, wreck, or demolish for another a building,
23 highway, road, railroad, excavation, or other structure, project, development, or improvement attached to real
24 estate, including the installation of carpeting or other floor covering, the erection of scaffolding or other
25 structures or works, or the installation or repair of roofing or siding; or
26 (b) in order to do work similar to that described in subsection (1)(a) upon the construction
27 contractor’s property, employs members of more than one trade on a single job or under a single building
28 permit, except as otherwise provided. ****
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1 (2) “Department” means the department of labor and industry provided for in Title 2, chapter 15,
2 part 17.
3
4 NEW SECTION. Section 3. The department may adopt rules necessary to
5 implement [sections 1 through 8].
6
7 NEW SECTION. Section 4. (1) An
8 individual or business entity may not engage in business as a construction contractor without a current license
9 from the department. The license must include the following information:
10 (a) the applicant’s social security number;
11 (b) proof of compliance with workers' compensation laws;
12 (c) the internal revenue service employer identification number, if any; and
13 (d) the name and address of:
14 (i) each partner if the applicant is a firm or partnership;
15 (ii) the owner if the applicant is an individual partnership;
16 (iii) the corporate officers and registered agent if the applicant is a corporation; or
17 (iv) the manager of a manager-managed limited liability company or the members of a member-
18 managed limited liability company and the registered agent if the applicant is a limited liability company.
19 (2) Section 37-1-137 applies to all persons listed in subsection (1)(d) of this section.
20
21 NEW SECTION. Section 5. A person who, pursuant to an oral or
22 written contract, engages a construction contractor who is licensed under [sections 1 through 8] on the date of
23 the contract is not liable as an employer for workers' compensation coverage under 39-71-405, for
24 unemployment insurance coverage, or for wages and fringe benefits for:
25 (1) the licensed construction contractor;
26 (2) the employees of the licensed construction contractor; or
27 (3) a subsequent subcontractor or the employees of a subsequent subcontractor engaged to fulfill
28 a part of or all the obligations of the oral or written contract of the licensed construction contractor listed in ****
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1 subsection (1).
2
3 NEW SECTION. Section 6. (1) Each applicant for a construction
4 contractor license shall pay an application fee established by the department.
5 (2) The fees collected under [sections 1 through 8] in accordance with 37-1-134 must be deposited
6 in a special revenue account for administration and enforcement of [sections 1 through 8].
7 (3) The department shall provide, in cooperation with building industry stakeholders, a program to
8 educate consumers and the building industry about construction contractor licensing requirements.
9 (4) A fine collected from a construction contractor under 37-1-109 or 37-1-406 must be deposited
10 in the uninsured employers' fund established in 39-71-503.
11
12 NEW SECTION. Section 7. (1) The following is unprofessional conduct for
13 a construction contractor licensee or license applicant:
14 (a) subject to Title 37, chapter 1, part 2, having a conviction, including a conviction following a plea
15 of nolo contendere of a crime relating to or committed during practice of the profession or occupation or
16 involving violence, the use or sale of drugs, fraud, deceit, or theft, whether or not an appeal is pending;
17 (b) engaging in conduct defined as a sexual crime in Title 45, chapter 5, part 5, regardless of
18 whether the conduct occurred during or is related to the licensee’s profession or occupation;
19 (c) engaging in conduct in the profession or occupation found to be a violation of the Montana
20 Human Rights Act, Title 49;
21 (d) permitting aiding, abetting, or conspiring with a person to violate or circumvent a law relating to
22 licensure or certification;
23 (e) engaging in fraud, misrepresentation, deception, or concealment of a material fact in applying
24 for or assisting in securing a license or license renewal or in taking an examination required for licensure;
25 (f) signing or issuing, in the licensee’s professional capacity, a document or statement that the
26 licensee knows or reasonably ought to know contains a false or misleading statement;
27 (g) using a misleading, deceptive, false, or fraudulent advertisement or other representation in the
28 conduct of the profession or occupation; ****
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1 (h) offering, giving, or promising anything of value or benefit to a federal, state, or local
2 government employee or official for the purpose of influencing the employee or official to circumvent a federal,
3 state, or local law, rule, or ordinance governing the licensee’s profession or occupation;
4 (i) receiving a denial, suspension, revocation, probation, fine, surrender during investigation or in
5 lieu of discipline, or other license restriction or discipline by a court, government agency, or private licensing or
6 credentialing agency if the action is not on appeal, not under judicial review, or has not been satisfied. For the
7 purposes of this section, a revoked license or certificate is not satisfied unless it is reinstated.
8 (j) failing to comply with a term, condition, or limitation of a license by final order of the
9 department;
10 (k) misappropriating property or funds from a client or workplace;
11 (l) interfering with an audit, investigation, inspection, or disciplinary proceeding by failure to
12 respond or cooperate, willful misrepresentation of facts, use of threats or harassment against or inducement to
13 a client or witness to prevent them from providing evidence in a disciplinary proceeding or other legal action or
14 use of threats or harassment against or inducement to a person to prevent or attempt to prevent a disciplinary
15 proceeding or other legal action from being filed, prosecuted, or completed;
16 (m) assisting in the unlicensed practice of a profession or occupation or allowing another person or
17 organization to practice or offer to practice the profession or occupation by use of the licensee’s license, or
18 practicing while the licensee’s license is in an inactive status;
19 (n) violating a federal, state, or local law or rule relating to the conduct of the profession or
20 occupation;
21 (o) failing to:
22 (i) comply with the workers' compensation provisions of 39-71-401;
23 (ii) obtain and retain unemployment insurance;
24 (iii) comply with the wage payment, minimum wage, and overtime payment provisions of Title 39,
25 chapter 3, and the federal Fair Labor Standards Act of 1938;
26 (p) hiring a person as an independent contractor:
27 (i) if the person does not have an independent contractor exemption certificate if required by 39-
28 71-417; ****
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1 (ii) if the department has suspended, revoked, or denied the person’s independent contractor
2 exemption certificate; or
3 (iii) if the person is hired to work in a trade, business, occupation, or profession that is not listed on
4 the independent contractor’s registration;
5 (q) allowing an independent contractor to perform work not in the trade, business, occupation, or
6 profession listed on the independent contractor exemption certificate; or
7 (r) classifying an employee as an independent contractor if the person does not have an
8 independent contractor exemption certificate required by 39-71-417.
9 (2) Except as provided in 39-9-205, a person who has registered under one name as provided in
10 [sections 1 through 8] may not engage in the business or act in the capacity of a construction contractor under
11 any other name unless that name is also registered under [sections 1 through 8].
12 (3) Failure to comply with the provisions of this section constitutes unprofessional conduct and the
13 provisions of 37-1-402 apply. The provisions of 37-1-410 do not apply to a construction contractor license or
14 license applicant under [sections 1 through 8].
15
16 NEW SECTION. Section 8. (1) In addition to the
17 penalties provided in 37-1-406, a determination by the department of unprofessional conduct under [section 7]
18 subjects the person who commits the violation to:
19 (a) a penalty of up to $5,000, as determined by the department; and
20 (b) a suspension or debarment of rights to public works contracts.
21 (2) A penalty collected under this section must be deposited in the uninsured employers' fund
22 established in 39-71-503.
23
24 Section 18-2-413, MCA, is amended to read:
25 "18-2-413. (1) The
26 department shall conduct an annual survey to calculate the standard prevailing rate of wages for building
27 construction services using the process described in this section.
28 (2) The standard prevailing wage rates adopted under subsection (1) must be set for the districts ****
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1 established pursuant to 18-2-411.
2 (3) The department shall survey:
3 (a) electrical contractors who are licensed under Title 37, chapter 68, who perform commercial
4 work;
5 (b) plumbers who are licensed under Title 37, chapter 69, whose work is performed according to
6 commercial building codes; and
7 (c) construction contractors registered under Title 39, chapter 9 [sections 1 through 8], whose work
8 is performed according to commercial building codes.
9 (4) The surveys required under subsection (3) must include those wages, including fringe benefits
10 plus zone pay, per diem, and travel allowances if applicable, that are paid in the applicable district by other
11 contractors for work of a similar character performed in that district by each craft, classification, or type of
12 worker needed to complete a contract under this part.
13 (5) (a) The contractor survey must include information pertaining to the number of skilled workers
14 employed in the contractor's peak month of employment and the wages and fringe benefits paid for each craft,
15 classification, or type of work.
16 (b) (i) In setting the prevailing wages from the survey for each craft, classification, or type of work,
17 the department shall use a weighted average wage for each craft, classification, or type of work, except in those
18 cases in which the survey shows that at least 50% of the skilled workers are receiving the same wage.
19 (ii) If the survey shows that at least 50% of the skilled workers are receiving the same wage, then
20 the higher of the collective bargaining agreement rate or the surveyed rate is the prevailing wage for that craft,
21 classification, or type of work.
22 (c) (i) In setting the prevailing fringe benefits from the survey for each craft, classification, or type
23 of work, the department shall use a weighted average fringe benefit for each craft, classification, or type of
24 work, except in those cases in which the survey shows that at least 50% of the skilled workers are receiving
25 fringe benefits pursuant to a collective bargaining agreement or pursuant to an employer's fringe benefit fund,
26 plan, or program that meets the requirements of the Employment Retirement Income Security Act of 1974 or
27 that is approved by the U.S. department of labor.
28 (ii) If the survey shows that at least 50% of the skilled workers are receiving fringe benefits ****
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1 pursuant to a collective bargaining agreement or pursuant to an employer's fringe benefit fund, plan, or program
2 that meets the requirements of the Employment Retirement Income Security Act of 1974 or that is approved by
3 the U.S. department of labor, the higher of fringe benefits received under collective bargaining agreements and
4 employers' fringe benefit funds, plans, or programs is the prevailing fringe benefit for that craft, classification, or
5 type of work.
6 (6) The work performed must be work of a similar character to the work performed in the
7 applicable district unless the survey in the applicable district does not generate sufficient data. If the survey
8 produces insufficient data, the rate may be established by the use of other information or methods that the
9 commissioner determines fairly establish the standard prevailing rate of wages.
10 (7) (a) The commissioner shall establish by rule the methodology for determining the standard
11 prevailing rate of wages. The rules must include an alternate methodology to determine the standard prevailing
12 rate of wages whenever insufficient data is generated by the survey of contractors in the applicable district. The
13 rules must identify the amount of data that constitutes insufficient data.
14 (b) The commissioner shall use an alternate methodology provided by rule to determine the
15 standard prevailing rate of wages whenever insufficient data exists.
16 (c) The alternative method of determining the prevailing rate of wages must provide for review and
17 the incorporation of data from work of a similar character, which must be based on a survey that is conducted
18 as closely as possible to the original district.
19 (8) Whenever work of a similar character is not being performed in the district, the standard
20 prevailing rate of wages, including fringe benefits and the rate of travel allowance, must be those rates
21 established by collective bargaining agreements in effect in the applicable district for each craft, classification,
22 or type of skilled worker needed to complete the contract."
23
24 Section 18-2-414, MCA, is amended to read:
25 "18-2-414.
26 (1) The department shall establish the standard prevailing rate of wages
27 for heavy construction services and for highway construction services annually.
28 (2) In establishing the standard prevailing rate of wages for heavy construction services and for ****
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1 highway construction services, the department may:
2 (a) conduct a survey of construction contractors registered under Title 39, chapter 9 [sections 1
3 through 8], who perform heavy construction services or highway construction services, electrical contractors
4 licensed under Title 37, chapter 68, who perform commercial work, or plumbers licensed under Title 37, chapter
5 69, whose work is performed according to commercial building codes;
6 (b) adopt by reference through rulemaking the rates established by the U.S. department of labor
7 under the federal Davis-Bacon Act, 29 CFR 1, et seq., for projects in Montana; or
8 (c) use, as provided by rule, a combination of surveyed rates, as provided in subsection (2)(a), and
9 rates adopted by reference, as provided in subsection (2)(b).
10 (3) For the purposes of this section, the term "standard prevailing rate of wages for heavy
11 construction services and for highway construction services" means wage rates, including fringe benefits plus
12 zone pay, per diem, and travel allowances, if applicable, that are determined and established statewide for
13 heavy construction projects and highway construction projects. The department may define by rule the terms
14 heavy construction projects and highway construction projects. The definitions of heavy construction projects
15 and highway construction projects must include but are not limited to projects the same as or similar to the
16 construction, alteration, or repair of roads, streets, highways, alleys, runways, airport runways and ramps,
17 dams, powerhouses, canals, channels, pipelines, parking areas, utility rights-of-way, staging yards located on
18 or off the right-of-way, or new or reopened pits that produce aggregate, asphalt, concrete, or backfill when the
19 pit does not normally sell to the general public."
20
21 Section 37-1-401, MCA, is amended to read:
22 "37-1-401.
23 As used in this part, the following definitions apply:
24 (1) "Complaint" means a written allegation filed with the department that, if true, warrants an
25 injunction, disciplinary action against a licensee, or denial of an application submitted by a license applicant.
26 (2) "Department" means the department of labor and industry provided for in 2-15-1701.
27 (3) "Investigation" means the inquiry, analysis, audit, or other pursuit of information by the
28 department, with respect to a complaint or other information before the department, that is carried out for the ****
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1 purpose of determining:
2 (a) whether a person has violated a provision of law justifying discipline against the person;
3 (b) the status of compliance with a stipulation or order of the department;
4 (c) whether a license should be granted, denied, or conditionally issued; or
5 (d) whether the department should seek an injunction.
6 (4) "License" means permission in the form of a license, permit, endorsement, certificate,
7 recognition, or registration granted by the state of Montana to engage in a business activity or practice at a
8 specific level in a profession or occupation governed by:
9 (a) Title 37, chapter 2, part 6;
10 (b) Title 37, chapter 16, 40, 56, 60, 72, or 73, or [sections 1 through 8]; or
11 (c) Title 50, chapter 39, 74, or 76.
12 (5) "Profession" or "occupation" means a profession or occupation regulated by the department
13 under the provisions of:
14 (a) Title 37, chapter 2, part 6;
15 (b) Title 37, chapter 16, 40, 49, 56, 60, 72, or 73, or [sections 1 through 8]; or
16 (c) Title 50, chapter 39, 74, or 76. (Terminates June 30, 2031--sec. 10, Ch. 628, L. 2023.)
17
18 As used in this part, the following definitions apply:
19 (1) "Complaint" means a written allegation filed with the department that, if true, warrants an
20 injunction, disciplinary action against a licensee, or denial of an application submitted by a license applicant.
21 (2) "Department" means the department of labor and industry provided for in 2-15-1701.
22 (3) "Investigation" means the inquiry, analysis, audit, or other pursuit of information by the
23 department, with respect to a complaint or other information before the department, that is carried out for the
24 purpose of determining:
25 (a) whether a person has violated a provision of law justifying discipline against the person;
26 (b) the status of compliance with a stipulation or order of the department;
27 (c) whether a license should be granted, denied, or conditionally issued; or
28 (d) whether the department should seek an injunction. ****
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1 (4) "License" means permission in the form of a license, permit, endorsement, certificate,
2 recognition, or registration granted by the state of Montana to engage in a business activity or practice at a
3 specific level in a profession or occupation governed by:
4 (a) Title 37, chapter 16, 40, 56, 60, 72, or 73, or [sections 1 through 8]; or
5 (b) Title 50, chapter 39, 74, or 76.
6 (5) "Profession" or "occupation" means a profession or occupation regulated by the department
7 under the provisions of:
8 (a) Title 37, chapter 16, 40, 49, 56, 60, 72, or 73, or [sections 1 through 8]; or
9 (b) Title 50, chapter 39, 74, or 76."
10
11 Section 39-9-101, MCA, is amended to read:
12 "39-9-101. It is the purpose of this chapter to ensure that all construction contractors and
13 home inspectors are competing fairly and in compliance with state laws."
14
15 Section 39-9-102, MCA, is amended to read:
16 "39-9-102.
17 (1) "Construction contractor" means a person, firm, or corporation that:
18 (a) in the pursuit of an independent business, offers to undertake, undertakes, or submits a bid to
19 construct, alter, repair, add to, subtract from, improve, move, wreck, or demolish for another a building,
20 highway, road, railroad, excavation, or other structure, project, development, or improvement attached to real
21 estate, including the installation of carpeting or other floor covering, the erection of scaffolding or other
22 structures or works, or the installation or repair of roofing or siding; or
23 (b) in order to do work similar to that described in subsection (1)(a) upon the construction
24 contractor's property, employs members of more than one trade on a single job or under a single building
25 permit, except as otherwise provided.
26 (2)(1) "Department" means the department of labor and industry.
27 (3)(2) (a) "Home inspection" means a physical examination of a residential dwelling to identify major
28 defects in various attributes of or attachments to the dwelling, including mechanical, electrical, and plumbing ****
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1 systems in addition to structural and other essential components. Home inspections are performed for
2 compensation and employ visual observation and the testing of user controls but not mathematical or
3 specialized engineering sciences.
4 (b) The term does not mean a physical examination of a residential dwelling when the owner or a
5 representative of the owner requests the examination by an individual who is licensed, certified, or registered in
6 this state and who is acting within the scope of practice of the individual's profession or occupation.
7 (4)(3) "Home inspection report" means a written document prepared by a home inspector for a client
8 and issued to the client in exchange for compensation after a home inspection has been completed. The report
9 must clearly identify and describe:
10 (a) the inspected systems, structures, and other relevant components of the dwelling;
11 (b) any major visible defects in the inspected systems, structures, and other relevant components
12 of the dwelling; and
13 (c) any recommendations for further evaluation of the property by other appropriate persons.
14 (5)(4) "Home inspector" means a person who performs a home inspection for compensation."
15
16 Section 39-9-206, MCA, is amended to read:
17 "39-9-206.
18 contractors and home inspectors for:
19 (a) issuance, renewal, and reinstatement of certificates of registration; and
20 (b) change of name, address, or business structure.
21 (2) The department shall set the fees by administrative rule. The fees must cover the full cost of
22 issuing certificates, filing papers and notices, and administering and enforcing this chapter. The costs include
23 reproduction, travel, per diem, and administrative and legal support costs.
24 (3) The fees charged in subsection (1)(a) may not exceed:
25 (a) for a construction contractor:
26 (i) $70 for the initial registration certificate; or
27 (ii) $70 for the renewal or reinstatement of a registration certificate; or
28 (b) for a home inspector, an amount determined in rule for the initial registration certificate or for ****
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1 the renewal or reinstatement of a registration certificate.
2 (4) The fees collected under this section must be deposited in a state special revenue account to
3 the credit of the department for the administration and enforcement of this chapter and independent contractor
4 certification provided for in Title 39, chapter 71, part 4.
5 (5) The department shall establish, cooperatively with representatives of the building industry and
6 the home inspection industry, an industry and consumer information program, funded with 15% of the fees, to
7 educate the building industry and home inspectors about the registration requirements and to educate the
8 public regarding the hiring of building construction contractors and home inspectors.
9 (6) The fee for a joint application for a certificate of registration and an independent contractor
10 exemption certificate may not exceed the total fee charged for a certificate of registration and an independent
11 contractor exemption certificate that are obtained separately. The fee paid for the independent contractor
12 exemption certificate may be used by the department to offset the cost of administering independent contractor
13 certification provided for in Title 39, chapter 71, part 4."
14
15 Section 39-9-207, MCA, is amended to read:
16 "39-9-207. A person who, pursuant to an oral or written contract,
17 engages a construction contractor or a home inspector who is registered under this chapter on the date of the
18 contract is not liable as an employer for workers' compensation coverage under 39-71-405, for unemployment
19 insurance coverage, or for wages and fringe benefits for:
20 (1) the registered construction contractor or home inspector;
21 (2) the employees of the registered construction contractor or home inspector; or
22 (3) any subsequent subcontractor or the employees of any subsequent subcontractor engaged to
23 fulfill a part of or all of the obligations of the oral or written contract of the registered construction contractor or
24 home inspector listed in subsection (1)."
25
26 Section 39-9-301, MCA, is amended to read:
27 "39-9-301. (1) Except as provided in 39-9-205, a A person who has
28 registered under one name as provided in this chapter may not engage in the business or act in the capacity of ****
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1 a construction contractor or a home inspector under any other name unless that name also is registered under
2 this chapter.
3 (2) Use of a falsified registration number in connection with a solicitation or identification as a
4 construction contractor or a home inspector is prohibited.
5 (3) A partner, associate, agent, salesperson, solicitor, officer, or employee of a construction
6 contractor or a home inspector shall use a true name and address at all times while engaged in the business or
7 capacity of a construction contractor or a home inspector or in activities related to a construction contractor or a
8 home inspector.
9 (4) A construction contractor may not:
10 (a) hire a person as an independent contractor who does not have an independent contractor
11 exemption certificate if required by 39-71-417;
12 (b) hire a person as an independent contractor if the department has suspended, revoked, or
13 denied the person's independent contractor's exemption certificate;
14 (c) hire an independent contractor to work in a trade, business, occupation, or profession not listed
15 on the independent contractor's registration;
16 (d) allow an independent contractor to perform work not in the trade, business, occupation, or
17 profession listed on the independent contractor exemption certificate; or
18 (e) classify an employee as an independent contractor if the person does not have an independent
19 contractor exemption certificate required by 39-71-417.
20 (5)(4) (a) The finding of a violation of this section by the department at a hearing held in accordance
21 with the Montana Administrative Procedure Act subjects the person who commits the violation to a penalty of
22 not more than $5,000, as determined by the department. The required hearing may be held by telephone or by
23 videoconference. A penalty collected under this section must be deposited in the state special revenue account
24 to the credit of the department for administration and enforcement of this chapter.
25 (b) Penalties under this section do not apply to a violation that is determined to be an inadvertent
26 error."
27
28 Section 39-9-303, MCA, is amended to read: ****
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1 "39-9-303. (1) The
2 department shall compile a list of all construction contractors and home inspectors registered under this chapter
3 and update the list of construction contractors at least bimonthly and the list of home inspectors as provided by
4 rule. The list is public information and must be available to the public upon request for a reasonable fee or
5 posted on the department's website.
6 (2) The department shall inform a person, firm, or corporation whether a construction contractor or
7 a home inspector is registered. The department shall provide the information without charge, except for a
8 reasonable fee for any copies made."
9
10 Section 39-71-401, MCA, is amended to read:
11 "39-71-401. (1) Except as provided
12 in subsection (2), the Workers' Compensation Act applies to all employers and to all employees. An employer
13 who has any employee in service under any appointment or contract of hire, expressed or implied, oral or
14 written, shall elect to be bound by the provisions of compensation plan No. 1, 2, or 3 unless the provisions of
15 39-71-442 apply. Each employee whose employer is bound by the Workers' Compensation Act is subject to
16 and bound by the compensation plan that has been elected by the employer.
17 (2) Unless the employer elects coverage for these employments under this chapter and an insurer
18 allows an election, the Workers' Compensation Act does not apply to any of the following:
19 (a) household or domestic employment;
20 (b) casual employment;
21 (c) employment of a dependent member of an employer's family for whom an exemption may be
22 claimed by the employer under the federal Internal Revenue Code;
23 (d) employment of sole proprietors, working members of a partnership, working members of a
24 limited liability partnership, or working members of a member-managed limited liability company, except as
25 provided in subsection (3);
26 (e) employment of a real estate, securities, or insurance salesperson paid solely by commission
27 and without a guarantee of minimum earnings;
28 (f) employment as a direct seller as defined by 26 U.S.C. 3508; ****
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1 (g) employment for which a rule of liability for injury, occupational disease, or death is provided
2 under the laws of the United States;
3 (h) employment of a person performing services in return for aid or sustenance only, except
4 employment of a volunteer under 67-2-105;
5 (i) employment with a railroad engaged in interstate commerce, except that railroad construction
6 work is included in and subject to the provisions of this chapter;
7 (j) employment as an official, including a timer, referee, umpire, or judge, at an amateur athletic
8 event;
9 (k) employment of a person performing services as a newspaper carrier or freelance
10 correspondent if the person performing the services or a parent or guardian of the person performing the
11 services in the case of a minor has acknowledged in writing that the person performing the services and the
12 services are not covered. As used in this subsection (2)(k):
13 (i) "freelance correspondent" means a person who submits articles or photographs for publication
14 and is paid by the article or by the photograph; and
15 (ii) "newspaper carrier":
16 (A) means a person who provides a newspaper with the service of delivering newspapers singly or
17 in bundles; and
18 (B) does not include an employee of the paper who, incidentally to the employee's main duties,
19 carries or delivers papers.
20 (l) cosmetologist's services and barber's services as referred to in 39-51-204(1)(e);
21 (m) a person who is employed by an enrolled tribal member or an association, business,
22 corporation, or other entity that is at least 51% owned by an enrolled tribal member or members, whose
23 business is conducted solely within the exterior boundaries of an Indian reservation;
24 (n) employment of a jockey who is performing under a license issued by the board of horseracing
25 from the time that the jockey reports to the scale room prior to a race through the time that the jockey is
26 weighed out after a race if the jockey has acknowledged in writing, as a condition of licensing by the board of
27 horseracing, that the jockey is not covered under the Workers' Compensation Act while performing services as
28 a jockey; ****
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1 (o) employment of a trainer, assistant trainer, exercise person, or pony person who is performing
2 services under a license issued by the board of horseracing while on the grounds of a licensed race meet;
3 (p) employment of an employer's spouse for whom an exemption based on marital status may be
4 claimed by the employer under 26 U.S.C. 7703;
5 (q) a person who performs services as a petroleum land professional. As used in this subsection, a
6 "petroleum land professional" is a person who:
7 (i) is engaged primarily in negotiating for the acquisition or divestiture of mineral rights or in
8 negotiating a business agreement for the exploration or development of minerals;
9 (ii) is paid for services that are directly related to the completion of a contracted specific task rather
10 than on an hourly wage basis; and
11 (iii) performs all services as an independent contractor pursuant to a written contract.
12 (r) an officer of a quasi-public or a private corporation or, except as provided in subsection (3), a
13 manager of a manager-managed limited liability company who qualifies under one or more of the following
14 provisions:
15 (i) the officer or manager is not engaged in the ordinary duties of a worker for the corporation or
16 the limited liability company and does not receive any pay from the corporation or the limited liability company
17 for performance of the duties;
18 (ii) the officer or manager is engaged primarily in household employment for the corporation or the
19 limited liability company;
20 (iii) the officer or manager either:
21 (A) owns 10% or more of the number of shares of stock in the corporation or owns 10% or more of
22 the limited liability company; or
23 (B) owns less than 10% of the number of shares of stock in the corporation or limited liability
24 company if the officer's or manager's shares when aggregated with the shares owned by a person or persons
25 listed in subsection (2)(r)(iv) total 10% or more of the number of shares in the corporation or limited liability
26 company; or
27 (iv) the officer or manager is the spouse, child, adopted child, stepchild, mother, father, son-in-law,
28 daughter-in-law, nephew, niece, brother, or sister of a corporate officer who meets the requirements of ****
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1 subsection (2)(r)(iii)(A) or (2)(r)(iii)(B);
2 (s) a person who is an officer or a manager of a ditch company as defined in 27-1-731;
3 (t) service performed by an ordained, commissioned, or licensed minister of a church in the
4 exercise of the church's ministry or by a member of a religious order in the exercise of duties required by the
5 order;
6 (u) service performed to provide companionship services, as defined in 29 CFR 552.6, or respite
7 care for individuals who, because of age or infirmity, are unable to care for themselves when the person
8 providing the service is employed directly by a family member or an individual who is a legal guardian;
9 (v) employment of a person performing the services of an intrastate or interstate common or
10 contract motor carrier when hired by an individual or entity who meets the definition of a broker or freight
11 forwarder, as provided in 49 U.S.C. 13102;
12 (w) employment of a person who is not an employee or worker in this state as defined in 39-71-
13 118(8);
14 (x) employment of a person who is working under an independent contractor exemption certificate;
15 (y) employment of an athlete by or on a team or sports club engaged in a contact sport. As used in
16 this subsection, "contact sport" means a sport that includes significant physical contact between the athletes
17 involved. Contact sports include but are not limited to football, hockey, roller derby, rugby, lacrosse, wrestling,
18 and boxing.
19 (z) a musician performing under a written contract.
20 (3) (a) (i) A person who regularly and customarily performs services at locations other than the
21 person's own fixed business location shall elect to be bound personally and individually by the provisions of
22 compensation plan No. 1, 2, or 3 unless the person has waived the rights and benefits of the Workers'
23 Compensation Act by obtaining an independent contractor exemption certificate from the department pursuant
24 to 39-71-417.
25 (ii) Application fees or renewal fees for independent contractor exemption certificates must be
26 deposited in the state special revenue account established in 39-9-206 39-71-417 and must be used to offset
27 the certification administration costs.
28 (b) A person who holds an independent contractor exemption certificate may purchase a workers' ****
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1 compensation insurance policy and with the insurer's permission elect coverage for the certificate holder.
2 (c) For the purposes of this subsection (3), "person" means:
3 (i) a sole proprietor;
4 (ii) a working member of a partnership;
5 (iii) a working member of a limited liability partnership;
6 (iv) a working member of a member-managed limited liability company; or
7 (v) a manager of a manager-managed limited liability company that is engaged in the work of the
8 construction industry as defined in 39-71-116.
9 (4) (a) A corporation or a manager-managed limited liability company shall provide coverage for its
10 employees under the provisions of compensation plan No. 1, 2, or 3. A quasi-public corporation, a private
11 corporation, or a manager-managed limited liability company may elect coverage for its corporate officers or
12 managers, who are otherwise exempt under subsection (2), by giving a written notice in the following manner:
13 (i) if the employer has elected to be bound by the provisions of compensation plan No. 1, by
14 delivering the notice to the board of directors of the corporation or to the management organization of the
15 manager-managed limited liability company; or
16 (ii) if the employer has elected to be bound by the provisions of compensation plan No. 2 or 3, by
17 delivering the notice to the board of directors of the corporation or to the management organization of the
18 manager-managed limited liability company and to the insurer.
19 (b) If the employer changes plans or insurers, the employer's previous election is not effective and
20 the employer shall again serve notice to its insurer and to its board of directors or the management organization
21 of the manager-managed limited liability company if the employer elects to be bound.
22 (5) The appointment or election of an employee as an officer of a corporation, a partner in a
23 partnership, a partner in a limited liability partnership, or a member in or a manager of a limited liability
24 company for the purpose of exempting the employee from coverage under this chapter does not entitle the
25 officer, partner, member, or manager to exemption from coverage.
26 (6) Each employer shall post a sign in the workplace at the locations where notices to employees
27 are normally posted, informing employees about the employer's current provision of workers' compensation
28 insurance. A workplace is any location where an employee performs any work-related act in the course of ****
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1 employment, regardless of whether the location is temporary or permanent, and includes the place of business
2 or property of a third person while the employer has access to or control over the place of business or property
3 for the purpose of carrying on the employer's usual trade, business, or occupation. The sign must be provided
4 by the department, distributed through insurers or directly by the department, and posted by employers in
5 accordance with rules adopted by the department. An employer who purposely or knowingly fails to post a sign
6 as provided in this subsection is subject to a $50 fine for each citation."
7
8 NEW SECTION. Section 19. The following sections of the Montana Code Annotated are
9 repealed:
10 39-9-201. Registration required -- application.
11 39-9-204. Certificate of registration -- issuance -- duration.
12
13 NEW SECTION. Section 20. Sections 39-9-205, 39-9-211, and
14 39-9-304 are intended to be renumbered and codified in a new chapter of Title 37 with [sections 1 through 8].
15
16 NEW SECTION. Section 21. [Sections 1 through 8] are intended to be
17 codified as a new chapter in Title 37, and the provisions of Title 37 apply to [sections 1 through 8].
18
19 NEW SECTION. Section 22. [This act] is effective January 1, 2026.
20 - END -