HOUSE BILL NO. 761
INTRODUCED BY NOONAN, GALLUS, MATTHEWS, TESTER, WANZENRIED
AN ACT CREATING AN ACCOUNT IN THE STATE TREASURY FROM WHICH PREMIUMS PAID FOR GROUP LIFE INSURANCE BY MEMBERS OF THE MONTANA NATIONAL GUARD AND RESERVE WHO ARE ON ACTIVE DUTY FOR A CONTINGENCY OPERATION MAY BE REIMBURSED; REQUIRING THE DEPARTMENT OF MILITARY AFFAIRS TO ADOPT RULES TO DETERMINE SERVICE MEMBERS' ELIGIBILITY FOR REIMBURSEMENT FOR GROUP LIFE INSURANCE PREMIUMS PAID AND IMPLEMENT THE REIMBURSEMENT PROGRAM; EXEMPTING FROM STATE INCOME TAXATION THE AMOUNT RECEIVED BY A SERVICE MEMBER AS REIMBURSEMENT FOR GROUP LIFE INSURANCE PREMIUMS PAID; APPROPRIATING FUNDS TO REIMBURSE SERVICE MEMBERS WHO ARE ON ACTIVE DUTY FOR A CONTINGENCY OPERATION FOR THE PREMIUMS PAID BY MEMBERS FOR GROUP LIFE INSURANCE; AMENDING SECTION 15-30-116, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE, AN APPLICABILITY DATE, AND A TERMINATION DATE; AND PROVIDING A TERMINATION DATE.
AN ACT CREATING AN ACCOUNT IN THE STATE TREASURY FROM WHICH PREMIUMS PAID FOR GROUP LIFE INSURANCE BY MEMBERS OF THE MONTANA NATIONAL GUARD AND RESERVE WHO ARE ON ACTIVE DUTY FOR A CONTINGENCY OPERATION MAY BE REIMBURSED; REQUIRING THE DEPARTMENT OF MILITARY AFFAIRS TO ADOPT RULES TO DETERMINE SERVICE MEMBERS' ELIGIBILITY FOR REIMBURSEMENT FOR GROUP LIFE INSURANCE PREMIUMS PAID AND IMPLEMENT THE REIMBURSEMENT PROGRAM; EXEMPTING FROM STATE INCOME TAXATION THE AMOUNT RECEIVED BY A SERVICE MEMBER AS REIMBURSEMENT FOR GROUP LIFE INSURANCE PREMIUMS PAID; APPROPRIATING FUNDS TO REIMBURSE SERVICE MEMBERS WHO ARE ON ACTIVE DUTY FOR A CONTINGENCY OPERATION FOR THE PREMIUMS PAID BY MEMBERS FOR GROUP LIFE INSURANCE; AMENDING SECTION 15-30-116, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE, AN APPLICABILITY DATE, AND A TERMINATION DATE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Legislative findings -- purpose. (1) The legislature finds that:
(a) the Montana national guard and reserve have a proud tradition of military service with thousands of Montanans having answered the call of the nation and having served in the national guard and reserve;
(b) there have been instances in which the dependents of members of the Montana national guard and reserve have been left without adequate financial resources when a national guard or reserve member has been killed while on active duty;
(c) members of the Montana national guard and reserve are now being asked to serve extended periods of active duty in combat areas;
(d) members of the Montana national guard and reserve are eligible for life insurance policies with limits of up to $250,000 through the federal service members' group life insurance program; and
(e) members of the Montana national guard and reserve provide Montana and its citizens valuable benefits through the members' service inside this state and through the members' recently extended periods of active duty in combat areas outside of Montana, and in exchange for these extended periods of active duty they should receive assistance with the premiums that members pay for the federal service members' group life insurance program.
(2) The purpose of creating and funding the account established in [section 3] is to provide a benefit to members of the Montana national guard and reserve in exchange for and in recognition of the members' assumption of extended periods of active duty in a contingency operation, in addition to the members' increased contributions to the safety and welfare of the citizens of Montana.
Section 2. Definitions. As used in [sections 1 through 4], unless the context requires otherwise, the following definitions apply:
(1) "Active duty" has the meaning provided in 38 U.S.C. 1965(1)(A) and generally means full-time duty in the armed forces, other than active duty for training.
(2) "Contingency operation" means an assignment within the provisions of 10 U.S.C. 101(a)(13).
(3) "National guard" has the meaning provided in 10-1-101.
(4) "Reserve" means a member of a reserve component, as defined in 38 U.S.C. 101, of the United States armed forces.
(5) "Service member" means a member of the national guard or reserve.
Section 3. Account for service members' life insurance. (1) There is an account in the state treasury that is composed of statutory deposits to the account and includes any gifts, grants, donations, or bequests to the account and earnings from investing the money in the account.
(2) Money in the account must be used as provided in [section 4] to reimburse service members serving on active duty in a contingency operation for the premiums paid, if any, for service members' group life insurance.
Section 4. Military service members' life insurance -- reimbursement -- eligibility. (1) (a) Subject to subsections (1)(b) and (1)(c), the department shall reimburse eligible service members for premiums paid for benefits under the service members' group life insurance program pursuant to 38 U.S.C. 1965 through 1980.
(b) A service member is eligible for reimbursement of group life insurance premiums only if the service member paid premiums for service members' life insurance available under 38 U.S.C. 1965 through 1980 after [the effective date of this act] and the service member served on active duty in a contingency operation after [the effective date of this act].
(c) The maximum amount of premium to be reimbursed may not exceed $16.25 a month for each month during which the member was on active duty in a contingency operation and purchased service members' group life insurance pursuant to 38 U.S.C. 1965 through 1980.
(2) The amount received by a service member as reimbursement for group life insurance premiums paid is considered to be a bonus for the purposes of taxation.
(3) The department shall adopt rules necessary to determine eligibility for reimbursement from the service members' life insurance reimbursement account and to implement the reimbursement program.
(4) This section does not alter, amend, or change the eligibility or applicability of the service members' group life insurance program pursuant to 38 U.S.C. 1965 through 1980 or any rights, responsibilities, or benefits under the program.
Section 5. Section 15-30-116, MCA, is amended to read:
"15-30-116. Veterans' bonus or military salary -- exemptions. (1) All payments made under the World War I bonus law, Korean bonus law, and the veterans' bonus law are hereby exempt from taxation under the income tax laws of the state of Montana, and any this chapter. Any income tax which that has been or may hereafter be paid on income received from this source shall be the World War I bonus law, Korean bonus law, and the veterans' bonus law is considered an overpayment and shall must be refunded upon the filing of an amended return and a verified claim for refund on forms prescribed by the department in the same manner as other income tax refund claims are paid.
(2) The salary received from the armed forces by residents of Montana who are serving on active duty in the regular armed forces and who entered into active duty from Montana is exempt from state income tax.
(3) The amount received pursuant to [section 4] or from the federal government by a service member, as defined in [section 2], as reimbursement for group life insurance premiums paid is considered to be a bonus and is exempt from taxation under this chapter."
Section 6. Appropriation -- periodic transfer -- reversion. (1) There is transferred from the general fund to the account established in [section 3] to reimburse the premiums for service members' life insurance $60,000 for fiscal year 2005, $300,000 for fiscal year 2006, and $300,000 for fiscal year 2007. The amount transferred is appropriated to the department of military affairs to be used as provided in [sections 1 through 4].
(2) Subject to subsection (1), the director of the department of military affairs shall, as necessary to administer the program for reimbursing service members for premiums paid for group life insurance under [sections 1 through 4], request the state treasurer to transfer sufficient funds from the general fund to the account established in [section 3]. The state treasurer shall comply with the request.
(3) Any unexpended or unencumbered balance remaining in the account at the end of a fiscal year reverts to the general fund.
Section 7. Codification instruction. [Sections 1 through 4] are intended to be codified as an integral part of Title 10, and the provisions of Title 10 apply to [sections 1 through 4].
Section 8. Effective date -- applicability. [This act] is effective on passage and approval and applies to premiums paid after [the effective date of this act] for service members' life insurance by a service member serving on active duty in a contingency operation after [the effective date of this act].
Section 9. Termination. (1) [This act] terminates on the last day of the first month in which:
(a) the amount of the death gratuity provided for in 10 U.S.C. 1478 for a service member is at least $250,000;
(b) the United States government directly pays for the premiums under the service members' group life insurance program provided for in 38 U.S.C. 1965 through 1980 for at least $250,000 of coverage for the death of a service member; or
(c) the amount of the death gratuity provided for in 10 U.S.C. 1478 plus the amount of coverage for which the United States government directly pays for the premiums under the service members' group life insurance program provided for in 38 U.S.C. 1965 through 1980 for a service member totals at least $250,000.
(2) A service member, as defined in [section 2], who is on active duty in a contingency operation after [the effective date of this act] is considered a service member for the purposes of this section.
(3) For the purposes of this section, the definitions for "active duty" and "contingency operation" provided in [section 2] apply.
- END -
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