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Senate committee hears bill to cut unemployment taxes and tighten fraud checks
Summary
Lawmakers and the Department of Labor and Industry presented House Bill 210, which would add a lower UI tax tier to return roughly $12.4M–$25.8M annually to employers and add an automated, vendor-mediated check against Montana driver-license records to reduce fraud. DLI said the measures preserve benefit levels while improving program integrity.
Representative Steve Fitzpatrick introduced House Bill 210, saying the measure would create a new, lower unemployment insurance tax tier and modernize data checks to reduce fraud, producing what DLI estimates as a $12.45 million savings in fiscal 2026 and about $25.8 million in 2027 for Montana employers.
The bill’s sponsor and Department of Labor and Industry Commissioner Sarah Swanson framed the change as an actuarially supported correction. Swanson said the department engaged an external actuary and concluded Montana’s trust fund is robust enough to allow a lower rate column; the proposal would let the state “tick down” to a lower charge when economic indicators permit. “This is a big tax cut to Montanans,” Swanson told the committee.
On fraud prevention, DLI described a technical fix: because both the unemployment system and the Motor Vehicle Division use the same vendor, DLI proposed a double-blind, automated yes/no match that quickly flags mismatches without transferring records. Swanson said the feature returns a simple pass/fail result so staff can focus manual review on questionable claims and reduce the department’s manual fraud workload.
Supporters from the Montana Chamber of Commerce, Montana Contractors Association, Montana AFL-CIO and small-business groups said the bill pairs employer relief with stronger anti-fraud tools and does not cut benefits. The Department of Justice and MVD witnesses described privacy safeguards and agreed the check can be implemented without exchanging personal data between agencies.
Committee questions focused on (1) how many Montanans lack Montana driver’s licenses, (2) how the new tax tier interacts with the statutory rate table, and (3) how DLI would use recoveries from fraud and overpayments. Swanson said the automated match does not catch out-of-state claimants but will reduce the largest volume of manual fraud checks; recoveries and fraud collections would be used to fund division operations and could be carried across fiscal years under the bill’s accounting change, avoiding an accounting shuffle that might otherwise raise employer premiums.
The hearing closed with sponsor and agency support for a due-pass recommendation. Next steps would be committee executive action and floor consideration.
