Proposal Notice: MAR No. 2026-169.1

Notice Of Proposed Rulemaking

MAR Notice No. 2026-169.1

Summary

Proposed Amendment and Repeal of Office of Dispute Resolution (ODR) Rules

Hearing Date and Time 

Monday, August 31, 2026, at 11:00 a.m.

Hearing Information

Third Floor Reception Area Conference Room of the Sam W. Mitchell Building, located at 125 North Roberts, Helena, Montana

Comments

Comments may be submitted using the contact information below. Comments must be received by Tuesday, September 8, 2026, at 5:00 p.m. 

Accommodations

The agency 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. Requests must be made by Friday, August 14, 2026, at 5:00 p.m.

Contact

Todd Olson, Rule Reviewer - Department of Revenue, Legal Services Office

(406) 444-7905

todd.olson@mt.gov

General Reasonable Necessity Statement

The department proposes to amend ARM 42.2.613 through 42.2.619 and 42.2.621, and repeal ARM 42.2.620, which pertain to the Office of Dispute Resolution (ODR), generally to: improve the accuracy and clarity of the procedural guidance in the rules; remove redundant and outdated provisions; reflect terminology changes made by the department’s Cannabis and Alcohol Regulation Division to its rules; reflect technology employed by, or affecting, the ODR in dispute resolution matters; and for general improvement of the rules’ content through simplification of verbiage.

While this general statement of reasonable necessity covers the basis for the proposed rule amendments and repeal, it is supplemented below to explain rule-specific proposals.

Rulemaking Actions

Amend

The rules proposed to be amended are as follows, stricken matter interlined, new matter underlined:

42.2.613 Definitions

The following definitions apply to rules found in this subchapter.

1. "Administrative Law Judge inserted: (ALJ), end inserted" meansdeleted: , within the context of the department's ODR,, end deleted the individual who:
   1. adjudicates or mediates a dispute between a person or other entity and the department after the dispute has been proceeded beyond informal review; and
   2. has general authority to regulate the course of appeals.
2. deleted: (11), end deletedinserted: (2), end inserted "deleted: Liquor , end deletedinserted: Alcohol , end insertedlicense protests" means challenges deleted: pursuant to 16-4-207, MCA,, end deleted to the inserted: issuance or , end insertedtransfer of ownership or location of deleted: an all-beverages, end deleted inserted: the alcoholic beverages , end insertedlicenseinserted: s listed in, and according to the protest criteria and process provided in 16-4-207, MCA, end inserted.
3. deleted: (12), end deletedinserted: (3), end inserted "deleted: Liquor , end deletedinserted: Alcohol , end insertedmatters" means disputes arising from the department's administration of the Montana Alcoholic Beverage Code (Title 16, chapters 1 through 4, and 6, MCA), other thandeleted:  liquor, end deleted inserted: alcohol , end insertedlicense protests. deleted: Liquor , end deletedinserted: Alcohol , end insertedmatters are contested cases conducted pursuant to the Montana Administrative Procedure Act set out in Title 2, chapter 4, part 6, MCA.deleted:  Liquor matters are not subject to the dispute resolution procedures established by 15-1-211, MCA., end deleted 
4. inserted: “Artificial intelligence (AI),” for purposes of these rules, has the same general meaning used by the American Bar Association (ABA) and includes, but is not limited to, the use of computer technology, software, and systems to perform tasks that historically required human intelligence.  The term is frequently applied to the replication of intellectual processes characteristic of humans, such as reasoning, generalizing, and relying on past experience., end inserted
5. deleted: (2), end deletedinserted: (5), end inserted "Bad debt matters" means disputes arising from a debt owed to an agency, other than the Department of Public Health and Human Services, that have been transferred to the department for collections pursuant to 17-4-104, MCA.
6. deleted: (3), end deletedinserted: (6), end inserted "Collection matters" means disputes arising from the department's collection of outstanding state taxes and any associated penalties and interest.
7. deleted: (4), end deletedinserted: (7), end inserted "Evidence"deleted:  has the meaning given , end deletedinserted: means the same as the term defined , end insertedin 26-1-101, MCA.
8. deleted: (5), end deletedinserted: (8), end inserted "Form APLS101F"deleted:  is a document titled, end deleted inserted: means the , end insertedRequest for Informal Review that is available at deleted: inserted: mtrevenue.gov, end inserted, end deleted inserted: revenue.mt.gov, end inserted for use by a person or other entity to file a written objection with the department for issues concerning the first notice of a tax adjustment.
9. deleted: (6), end deletedinserted: (9), end inserted "Form APLS102F"deleted:  is a document titled, end deleted inserted: means the , end insertedNotice of Referral to the Office of Dispute Resolution that is available at deleted: inserted: mtrevenue.gov, end inserted, end deleted inserted: revenue.mt.gov , end insertedfor use by a person or other entity to appeal an informal review determination to the ODR.
10. deleted: (7), end deletedinserted: (10), end inserted "Form CAB-8"deleted:  is a document titled, end deleted inserted: means the , end insertedRequest for Informal Review for Centrally Assessed Companies that is available at deleted: inserted: mtrevenue.gov, end inserted, end deleted inserted: revenue.mt.gov , end insertedfor use by a centrally assessed company to appeal a first notice of tax assessment or classification.
11. deleted: (8), end deletedinserted: (11), end inserted "Form CAB-9"deleted:  is a document titled, end deleted inserted: means the , end insertedNotice of Referral to the Office of Dispute Resolution for Centrally Assessed Companies that is available at deleted: inserted: mtrevenue.gov, end inserted, end deleted inserted: revenue.mt.gov , end insertedfor use by a centrally assessed company to appeal an informal review determination to the ODR.
12. deleted: (9), end deletedinserted: (12), end inserted "Hearing" means a recorded, contested proceeding before an ALJ, acting as a finder of fact, during which the parties may offer testimony under oath with an opportunity to question the witnesses, offer exhibits, make arguments, and provide evidence.
13. deleted: (10), end deletedinserted: (13), end inserted "Initial conference" means a conference conducted by inserted: the , end insertedODR with the parties involved to consider the issues in dispute and determine:
    1. whether the proceedings will be informal or formal;
    2. the necessity for discovery; and
    3. a schedule that will address the context and needs of the dispute; or
    4. whether the taxpayer will elect to bypass inserted: the , end insertedODR.
14. deleted: (13), end deletedinserted: (14), end inserted "Marijuana matters" means disputes arising from the department's administration of the Montana Marijuana Regulation and Taxation Act (Title 16, chapter 12, MCA, and ARM Title 42, chapter 39).  Marijuana matters are contested cases conducted pursuant to the Montana Administrative Procedure Act, Title 2, chapter 4, part 6, MCA.deleted:  Marijuana matters are not subject to the dispute resolution procedures established by 15-1-211, MCA., end deleted 
15. deleted: (14), end deletedinserted: (15), end inserted "Mediationinserted: ,, end inserted"inserted:  for purposes of these rules,, end inserted meansdeleted:  a process by which a mediator assists opposing parties in attempting to arrive at a mutually acceptable resolution of a dispute, end deletedinserted:  the alternative dispute resolution process authorized under 15-1-211, MCA, where a mediator facilitates discussion between the parties to encourage informal resolution, end inserted. 
16. deleted: (15), end deletedinserted: (16), end inserted "Notice of referral to the ODR" means to file an appeal from an informal review determination with the ODR, by submitting:
    1. a completed Form APLS102F; or
    2. any other written objection.
17. deleted: (16), end deletedinserted: (17), end inserted "ODR" means the department's Office of Dispute Resolution as established by 15-1-211, MCA.
18. deleted: (17), end deletedinserted: (18), end inserted "Party" means either a person or other entity or the department.
19. deleted: (18), end deletedinserted: (19), end inserted "Request for informal review" means a request by a person or other entity for review of a tax assessment, adjustment, or other department determination, by submitting:
    1. a completed Form APLS101F;
    2. a completed Form CAB-8; or
    3. any other written request for review.
20. deleted: (19), end deletedinserted: (20), end inserted "Settlement" means a mutually agreed upon resolution of the disputed issuesinserted: , the terms of which are executed in writing and binding upon the parties, end inserted.
21. deleted: (20), end deletedinserted: (21), end inserted "Tax matters" means disputes arising from the department's administration of state taxes.

Authorizing statute(s): 15-1-201, 15-1-211, 16-12-112, MCA

Implementing statute(s): 15-1-211, 16-12-109, 16-12-112, MCA

Reasonable Necessity Statement

In addition to the department's general statement of reasonable necessity, the department proposes to amend ARM 42.2.613 to remove unnecessary or redundant verbiage from the definitions (see (1), (5) through (9), (13) and (14)), to reword definitions consistent with the department’s other rules (“alcohol licensing” instead of “liquor licensing”), to correct proposed (12) to comport with 16-4-207, MCA, to improve the definition of mediation in proposed (15) which may result in an increased understanding of its use as a means of dispute resolution with the department, and to adopt a formal definition of artificial intelligence (AI) which will be used to direct disclosure requirements for parties making formal filings to the ODR created with AI.

The department also proposes updates in the rule to the department’s current website.

The department will renumber definitions which is necessary to maintain the alphabetized order in the rule.

42.2.614 Purpose

1. Section 15-1-211, MCA, requires a uniform dispute review procedure and the establishment of a dispute resolution office within the department.
2. A primary objective of the dispute resolution procedure is to make resolving a dispute with the department as accessible as possible to parties appearing before the department.
3. The department's dispute review procedure applies to all matters administered by the department except those exempted by 15-1-211, MCA, or other applicable law.deleted:  Liquor matters and marijuana matters are handled pursuant to the Montana Administrative Procedure Act and are not subject to the department's dispute review procedure., end deleted 
4. deleted: (4) A final agency decision must be issued within 180 days from the date the notice of referral to ODR is received as provided for in 15-1-211, MCA, unless extended by mutual consent of the parties., end deleted 
5. deleted: (5), end deletedinserted: (4), end inserted Section 69-8-414, MCA, requires the department to issue a final agency decision for uniform systems benefits matters within 60 days from the date the matter is submitted to ODR, rather than the 180 days provided deleted: for , end deletedin 15-1-211, MCA.

Authorizing statute(s): 15-1-201, 15-1-211, 16-12-112, MCA

Implementing statute(s): 15-1-211, 16-12-109, 16-12-112, 69-8-414, MCA

Reasonable Necessity Statement

In addition to the department's general statement of reasonable necessity, the department proposes to amend ARM 42.2.614 by removing the last sentence of (3), and (4) in its entirety, because they are unnecessarily redundant to 15-1-211, MCA, and do not lend any greater understanding of the subject through repetition.

The removal of (4) will require section renumbering of current (5).

42.2.615 Referrals To inserted: The, end inserted Odr

1. Notice of referral to the ODR shall be submitted in writing and shall indicate the issues in dispute.
2. Except for deleted: liquor, end deletedinserted: alcohol , end insertedmatters and marijuana matters,deleted:  as defined in ARM 42.2.613,, end deleted a person or other entity who has filed an appeal with inserted: the , end insertedODR may, within 30 days of filing the appeal, elect to bypass review by that office and file an appeal with the state tax appeal board. If the person or other entity elects to bypass review by inserted: the , end insertedODR, the determination originally issued by the division will be deemed the final department decision.
3. The ODR shall notify the appropriate division within the department that a referral has been received.

Authorizing statute(s): 15-1-201, 15-1-211, 16-12-112, MCA

Implementing statute(s): 15-1-211, 16-12-109, 16-12-112, MCA

Reasonable Necessity Statement

The department proposes to amend ARM 42.2.615(2) consistent with the department's general statement of reasonable necessity for this rulemaking.

42.2.616 Formality of Procedures

1. deleted: The department recognizes that a wide array of parties appear before the department with disputes to resolve. These disputes range from large corporations employing professional tax counsel to individuals appearing on their own behalf. , end deletedinserted: The ODR hears appeals from self-represented parties and parties represented by authorized representatives, end inserteddeleted:  It is, end deleted inserted: with , end insertedthe intentdeleted:  of the department, end deleted to accommodate alldeleted:  such, end deleted disputesdeleted:  to the greatest extent possible, end deleted in a mannerdeleted:  that is deemed, end deleted most appropriate for each situation. 
2. deleted: (2) The ALJ, in consultation with the parties, will evaluate the circumstances and complexity of each dispute being presented and determine the most appropriate level of formality and procedure to follow., end deleted 
3. deleted: (3), end deletedinserted: (2), end inserted deleted: To the extent the department's rules do not provide for or specify procedures, or where necessary to supplement the rules, the , end deletedinserted: An ALJ may utilize the , end insertedMontana Administrative Procedure Act, Montana Rules of Civil Procedure, Montana Uniform District Court Rules, and Montana Rules of Evidencedeleted:  may be utilized to the extent that they, end deletedinserted: , as necessary, to, end inserted clarify fair procedures, expedite determinations, and assist in the adjudication of rights, duties, or privileges of parties.
4. deleted: (4), end deletedinserted: (3), end inserted When conducting discovery, the partiesdeleted:  shall attempt, end deleted inserted: are requested , end insertedto obtain discovery through informaldeleted:  consultation, end deleted inserted: means , end insertedor communication. If reasonable informal inserted: discovery , end insertedeffortsdeleted:  to obtain information, end deleted are unsuccessful, then formal discovery procedures may be used.
5. deleted: (5) Liquor matters and marijuana matters are handled pursuant to the Montana Administrative Procedure Act and are not subject to this rule., end deleted 
6. inserted: A party may make formal filings at any stage in the appeal process., end inserted
7. inserted: A party at a hearing shall have the right to introduce evidence.  The evidence may be oral or written, real or demonstrative, direct or circumstantial.  A party must disclose to the ODR if they introduce evidence or make any formal filing created using AI., end inserted
8. inserted: A party may be represented by legal counsel at any stage of adjudication.  Legal counsel must enter a notice of appearance with the ODR to represent a person or other entity before an ALJ. , end inserted
9. inserted: Failure to obtain legal representation may not be cited as grounds for complaint at a later stage in the adjudicative process or for relief on appeal from an adverse decision. , end inserted
10. inserted: If a person or other entity chooses to be represented by someone other than legal counsel at the hearing or adjudication stage, the person or other entity must first submit a signed power of attorney form to the ODR authorizing the representative to act on the party's behalf. , end inserted
11. inserted: If a party is represented by legal counsel or another representative, all documents and information pertaining to the dispute will be directed to the representative.  The information may be transmitted by e-mail, the state of Montana File Transfer Service, or other electronic means, provided such transmission meets confidentiality requirements.  Otherwise, documents will be mailed to the representative's address as shown in the original filing., end inserted

Authorizing statute(s): 15-1-201, 15-1-211, 16-12-112, MCA

Implementing statute(s): 15-1-211, 16-12-109, 16-12-112, MCA

Reasonable Necessity Statement

In addition to the department's general statement of reasonable necessity, the department proposes to amend ARM 42.2.616 as follows:

1. Amendments to (1) are proposed to remove unnecessary descriptions and restate the general nature of the formality of the ODR’s processes.
2. Current (2) is proposed for removal as it is an unnecessary and overly generalized description of an ALJ’s approach to case management within the ODR.
3. Proposed (2) is amended to remove a superfluous introduction that does not lend substance or function to the rule.
4. Proposed (3) and the removal of current (5) are made consistent with the department's general statement of reasonable necessity.
5. Proposed (4) and (5) are provisions transferred from ARM 42.2.620, which is proposed for repeal, for improved organization of content.
6. Proposed (6) through (9) are transferred from ARM 42.2.619 for improved organization of content because they apply to any phase of an ODR matter, not just hearings.

42.2.617 Initial Conferences

1. Following the ODR's receipt of a notice of referral to the ODR, an initial conference will be scheduled as soon as possible.
2. Parties may participate at the initial conference either on their own behalf or through representatives, employees, or agents as long as a requisite notice of appearance has been entered by an attorney or a power of attorney form designating representation has been submitted by the party of record.
3. Written notice of the initial conference shall be given at least 10 days prior to the date of the initial conference unless the parties waive notice. deleted:  The initial conference may be conducted by telephone, in person, or by other means agreeable to the parties., end deletedinserted:   The initial conference may be conducted by telephone or video conference, or in person at the discretion of the ALJ., end inserted
4. At the initial conference, thedeleted:  hearing examiner, end deleted inserted: ALJ , end insertedwill discuss the options for proceedingdeleted: with an, end deleted inserted: on , end insertedappeal before the ODRdeleted: .  The options generally entail proceeding to a decision based on a hearing, proceeding to a decision based on the record, and/or participating in mediation.  The hearing examiner shall set a time and date for the mediation or hearing that is as mutually satisfactory as possible to all concerned., end deletedinserted: which may include:, end inserted
   1. inserted: scheduling a hearing;, end inserted
   2. inserted: setting a briefing schedule;, end inserted
   3. inserted: discussing the potential for mediation;, end inserted
   4. inserted: bypassing the ODR review under a 15-1-211(2)(c), MCA, election; and/or, end inserted
   5. inserted: staying the appeal to afford the parties an opportunity to resolve the dispute informally., end inserted
5. Once a hearing or inserted: a , end insertedmediation has been scheduled, thedeleted: hearing examiner, end deleted inserted: ALJ , end insertedwill coordinate with the parties to schedule other deadlines as needed, such as:
   1. discovery and exhibit exchanges;
   2. motion deadlines; and
   3. other documentation or briefing submission deadlines.
6. deleted: (6) If the parties and the hearing examiner agree, mediation may occur during the initial conference as set forth in ARM 42.2.618., end deleted 
7. deleted: (7), end deletedinserted: (6), end inserted A party may request a continuance of a scheduled matter.  The party seeking the continuance shall indicate whether the request is opposed. If the request for continuance isdeleted:  contested, end deleted inserted: opposed, end inserted, the requesting party shall provide the basis for the request.
8. deleted: (8), end deletedinserted: (7), end inserted Specific facts and substantive matters discussed during the initial conference are considered confidential. Procedural matters discussed are not considered confidential.  Any matters raised do not constitute admissions against interest of any party participating in the conference.
9. deleted: (9), end deletedinserted: (8), end inserted Thedeleted: hearing examiner, end deleted inserted: ALJ , end insertedassigned to the matter shall preside over any hearing and issue the written determination adjudicating the matter.
10. deleted: (10), end deletedinserted: (9), end inserted Nothing in this rule may be construed as limiting a party's right to a hearing.

Authorizing statute(s): 15-1-201, 15-1-211, MCA

Implementing statute(s): 15-1-211, MCA

Reasonable Necessity Statement

The department proposes to amend ARM 42.2.617 consistent with the department's general statement of reasonable necessity.

42.2.618 Mediation Procedures

1. The resolution of any matter in connection with a dispute may be pursued through mediation with the agreement of all parties.
2. Mediation may be requested and scheduled at the initial conference or at any time during the proceeding at the agreement of both parties. deleted: Alternatively, if the parties and the hearing examiner agree, mediation may also occur during the initial conference with the understanding that if a resolution is not reached, the case shall be reassigned to a different hearing examiner., end deleted 
3. The mediator may either bedeleted:  a hearing examiner, end deleted inserted: an ALJ , end insertedfrom the ODR or a mediator from outside the department and shall be selected with the consent of both parties.
4. If an outside mediator is selected, the cost of the mediator shall be paiddeleted: for, end deleted by the party requesting the outside mediator, unless the parties have agreed to some other cost-sharing provision.
5. The mediator does not have authority to enter any decision on the merits of the issues in dispute or to impose a settlement upon the parties.  The parties control the identification of the issues submitted and the type of resolution to be agreed upon.
6. At the mediation, each party shall have the appropriate representative or access to the appropriate representative who has full settlement authority.
7. Mediation sessions are confidential settlement negotiations.  All written and oral communications, negotiations, and statements made in the course of the mediation are made without compromising any party's legal position, are not discoverable, and shall be inadmissible for any purpose at any legal proceeding.
8. If mediation resolves the dispute,deleted:  a written agreement documenting the resolution shall be prepared by the parties with the assistance of the mediator, if necessary.  A written agreement signed by all parties to the agreement is not confidential and may be admissible as evidence, as set forth in 26-1-813, MCA, end deleted inserted: the mediator shall prepare a mediation report memorializing that the parties have resolved the matter.  If mediation does not resolve the dispute, the mediator shall prepare a mediation report and include any stipulations identifying the issues resolved and any issues that remain in dispute.  The parties may continue on appeal and request a hearing on the outstanding issues in dispute, end inserted.
9. deleted: If mediation does not resolve all issues in a dispute, the parties shall prepare a stipulation that identifies the issues resolved and those that still remain in dispute.  For the issues remaining unresolved, the matter may proceed before a different hearing examiner unless the parties have agreed to move the remaining issues to the next level of appeal.  , end deletedinserted: If the parties have resolved the dispute through mediation, the parties shall execute a legally binding settlement agreement outside the purview of the ODR.  Written agreements signed by all parties are not confidential and may be admissible as evidence, as set forth in 26-1-813, MCA., end inserted 

Authorizing statute(s): 15-1-201, 15-1-211, MCA

Implementing statute(s): 15-1-211, MCA

Reasonable Necessity Statement

In addition to the department's general statement of reasonable necessity, the department proposes to amend ARM 42.2.618 to remove the second sentence of (2) because it is largely redundant to the preceding sentence and may cause unnecessary confusion about initiating mediation of a dispute while at the ODR.

The department also proposes amendments to (8) and (9) in response to the department’s review of the stated mediation process. The department contends the description of mediation outcomes can be combined and the procedural clarity can be improved to align with the ODR’s practices and the continuation of any appeal.

42.2.619 Hearing Procedures

1. Except as provided in this rule, hearingsdeleted:  shall, end deleted inserted: may , end insertedbe conducted inserted: by telephone or video conference.  A party may request an in-person hearing to be conducted , end insertedin Helena, Montana.  Upon a showing of compelling circumstancesdeleted: by either party, the hearing examiner, end deletedinserted: , an ALJ , end insertedmay order a hearing to be conducted at a location elsewhere in Montana.
2. The location for hearings pertaining todeleted: liquor, end deleted inserted: alcohol , end insertedmatters is determined according to ARM 42.11.305 and 42.12.108deleted: , and is not subject to (1), end deleted.
3. deleted: (3) Upon agreement of the parties, hearings may be conducted by telephone or video conference.  If the hearing examiner determines that telephonic or video conference participation may unfairly prejudice the rights of any party, the hearing will be conducted in person.  If, however, telephonic or video conference participation is approved, the hearing examiner will place the call at the designated time to the numbers provided by the parties., end deleted 
4. deleted: (4), end deletedinserted: (3), end inserted Notice of the time and place for a hearing shall be given to the partiesdeleted: concerned,, end deleted or their representativesdeleted:  if legal authorization is on file,, end deleted not less than 14 days prior to thedeleted:  day fixed for such proceedings, end deleted inserted: hearing, end inserted.
5. deleted: (5), end deletedinserted: (4), end inserted A party may request a continuance of a scheduled matter.  The party seeking the continuance shall indicate whether the request is opposed.  If the request for continuance isdeleted:  contested, end deletedinserted: opposed, end inserted, the requesting party shall provide the basis for the request.
6. deleted: (6) A party may be represented by legal counsel at the hearing at any stage of adjudication.  Legal counsel must enter a notice of appearance with the department to represent a person or other entity before the hearing examiner. , end deleted
7. deleted: (7) Failure to obtain legal representation may not be cited as grounds for complaint at a later stage in the adjudicative process or for relief on appeal from an adverse decision. , end deleted
8. deleted: (8) If a person or other entity chooses to be represented by someone other than legal counsel at the hearing or adjudication stage, the person or other entity must first submit a signed power of attorney form to the department authorizing the representative to act on the party's behalf., end deleted 
9. deleted: (9) If a party is represented by legal counsel or another representative, all documents and information pertaining to the dispute will be directed to the representative.  The information may be transmitted by fax, e-mail, or other electronic means, provided such transmission meets the department's confidentiality requirements.  Otherwise, documents will be mailed to the representative's address as shown in the original filing. , end deleted
10. deleted: (10), end deletedinserted: (5), end inserted Hearinginserted: s, end inserted deleted: proceedings , end deletedshall be conducted at all times withdeleted:  due, end deleted regard for the confidentiality requirements imposed by law.
11. deleted: (11), end deletedinserted: (6), end inserted Testimony at hearings shall be given under oath.

Authorizing statute(s): 15-1-201, 15-1-211, MCA

Implementing statute(s): 15-1-211, 15-30-2618, 15-31-511, MCA

Reasonable Necessity Statement

In addition to the department's general statement of reasonable necessity, the department proposes to amend ARM 42.2.619 to: remove current (3) which is unnecessarily verbose as the most critical substance has been added to (1); transfer current (6) through (9) to ARM 42.2.616, as described in the statement of reasonable necessity for that rule; and renumber rule sections, where noted, based on the proposed removal and reorganization of content.

42.2.621 Final Agency Decision and Appeal

1. The director retains the authority to issue a final agency decision (FAD) on all matters except those identified in (2).
2. The director delegates to the ODR the authority to issue a FAD ondeleted:  liquor, end deleted inserted: alcohol , end insertedlicensing protests, marijuana matters, bad debt matters, tax matters, and collection matters.  The delegation to issue a FAD applies only to matters referred to the ODR.
3. deleted: An , end deletedinserted: A , end insertedFAD ondeleted:  liquor, end deleted inserted: alcohol , end insertedmatters, marijuana matters,deleted:  liquor, end deleted inserted: alcohol , end insertedlicensing protests, and bad debt matters may be appealed to the district court by filing a petition for judicial review within 30 days after service of the FAD.
4. deleted: An , end deletedinserted: A , end insertedFAD on a tax matter or collection matter may be appealed to the Montana Tax Appeal Board as provided in 15-2-302, MCA, by filing an appeal within 30 days following receipt of the FAD.
5. If no decision is rendered by the end of the 180-day period specified in 15-1-211, MCA, the department shall notify the parties that they are entitled to carry their appeal forward by filing a complaint with the appropriate reviewing authority inserted: in (3) or (4) , end insertedwithin 30 days after service of the notice.inserted:   The parties may waive the 180-day period, in writing., end inserted

Authorizing statute(s): 15-1-201, 15-1-211, 15-1-217, 16-1-303, 50-46-344, MCA

Implementing statute(s): 2-4-621, 2-4-623, 2-4-631, 2-15-112, 2-15-1302, 15-1-211, 15-2-302, 16-4-411, 50-46-344, MCA

Reasonable Necessity Statement

The department proposes to amend ARM 42.2.621 consistent with the department's general statement of reasonable necessity for this rulemaking.

Repeal

The rules proposed to be repealed are as follows:

42.2.620 Information Offered in Hearings

1. The hearing examiner shall have the discretion to adopt and apply rules of civil procedure and/or rules of evidence as deemed necessary.
2. Every party at a hearing shall have the right to introduce evidence. The evidence may be oral or written, real or demonstrative, direct or circumstantial.
3. At the discretion of the hearing examiner, or upon stipulation of the parties, the parties may be required to reduce their testimony to writing and to prefile the testimony.
4. Prefiled testimony may be placed in the record without being read into the record at a hearing if the opposing parties have had reasonable access to the testimony before it is presented.
5. If a party intends to question a witness on prefiled testimony, that party must file a notice of intent to do so within a time frame agreed upon by the parties with consideration for affording the opposing party an opportunity to cross-examine.
6. The hearing examiner shall rule on matters concerning the evidentiary and procedural conduct of the hearing.
7. Any party appearing at a hearing may submit a written statement addressing factual or legal issues, including citations of legal authority, if deemed necessary by the hearing examiner for a full and informed consideration of all matters.
8. Liquor matters are conducted pursuant to the Montana Administrative Procedure Act and are not subject to this rule.

Authorizing statute(s): 15-1-201, 15-1-211, MCA

Implementing statute(s): 15-1-211, MCA

Reasonable Necessity Statement

In addition to the department's general statement of reasonable necessity, the department proposes to repeal ARM 42.2.620 because much of the content is either redundant to statute or other rule provisions or has been determined to be obsolete/unused.

For instance, (1) is redundant to ARM 42.2.616(2)(proposed). Other provisions are better suited in other rules and have been reorganized, as noted above.

The sections relating to prefiling testimony were adopted in 1999 and were based on the department’s observations of other Montana state agencies and of neighboring state dispute resolution offices. While prefiled testimony has conceptual merit, the process has not been utilized by any party to an ODR matter. The department contends the logistics to afford all parties due process with prefiled testimony, and the likelihood of receiving technically deficient or inadmissible testimony have made the process undesirable. Accordingly, the department proposes its removal, which is achieved through repeal of the rule.

Small Business Impact

With regard to the small business impact analysis requirements of 2-4-111, MCA, as amended by HB 592 (2025), the department has analyzed the proposed rule amendments and repeal and the groups or class of businesses directly affected by this rulemaking if they meet the definition of a small business under 2-4-102(13), MCA.

The department contends no small business impact is directly related to the proposed rulemaking because the revision or clarification of the rules does not create any new requirements.

Documentation of the small business impact analysis is available upon request.

Bill Sponsor Notification

The bill sponsor contact requirements of 2-4-302, MCA, do not apply.

Interested Persons

The Department of Revenue 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 and e-mail or mailing address of the person to receive notices and specifies that the person wishes to receive notice regarding particular subject matter or matters.  Notices will be sent by e-mail unless a mailing preference is noted in the request.  A written request may be mailed or delivered to the contact person in this notice or may be made by completing a request form at any rules hearing held by the Department of Revenue.

Rule Reviewer

Todd Olson

Approval

Brendan Beatty, Director of Revenue