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Bill would cut employer UI tax rates, add fraud‑detection matching with DMV systems
Summary
Representatives heard House Bill 210 proposing a lower unemployment insurance tax tier for employers, estimated to cut premiums by tens of millions, and a technical fix to match claimant data with the state motor vehicle system to reduce fraud.
Rep. Steve Fitzpatrick and Department of Labor and Industry Commissioner Sarah Swanson presented House Bill 210, which would (1) add a lower unemployment insurance (UI) tax class to reduce employer tax rates when trust and economic indicators allow and (2) add a technical data‑matching step between the UI claimant system and the state motor‑vehicle database to reduce fraud.
The bill’s backers said Montana’s UI trust fund weathered COVID‑era claims without federal borrowing and that actuarial review showed employers have been paying at higher rates than necessary. The department’s actuarial analysis, presented by the sponsor and procurement staff, estimated an annual reduction in employer premiums of roughly $25.8 million in the second year after passage and about $12.45 million in the first fiscal year cited on the fiscal note. Supporters framed the change as a broad tax relief to Main Street employers.
On program integrity, witnesses described the state’s new UI software and the motor‑vehicle system both being developed by the same vendor, Fast Enterprises, which allows a double‑blind “clean room” match to detect whether a claimant’s name and driver’s‑license number match a Montana DMV record. The department said the change is not a data exchange; it returns a simple yes/no verification to reduce manual fraud investigations for claimants who hold Montana licenses. Commissioner Swanson said the approach does not address all fraud (nonresidents and claimants without Montana licenses will still be subject to manual review), but it will reduce the bulk of automated fraudulent filings.
Business groups including the Montana Chamber, Montana Contractors Association, National Federation of Independent Business, and others supported the bill. The Montana AFL‑CIO also testified in favor, saying the changes were negotiated with stakeholders. DLI staff explained a separate accounting change in the bill that would let the agency carry forward fraud overpayment receipts across fiscal years to use them for administration rather than forcing them back into the trust at fiscal year end.
Committee members asked about the level of the trust fund (about $683 million at the time of testimony), modeling that determines which rate tier applies and how the DMV match handles claimants without Montana licenses. Commissioner Swanson said the model is live and can be examined and that the DMV match only short‑circuits manual fraud work for claimants who do have Montana licenses; other claims would continue through current fraud‑detection processes. No formal committee vote was recorded at the hearing.
