Montana bill would pool small licensing boards to cover rare, costly legal cases

Representative Jodie Echart opened testimony on House Bill 227, proposing a Contingent Litigation Fund for small occupational licensing boards. The fund would pool licensees so rare but expensive legal defense costs do not force tiny boards either to shut down or sharply raise fees for all licensees.

Echart said the fund would initially cover about 29 small boards and roughly 30,900 licensees. Under the bill, assessments would be uniform across participating license types and would be imposed only in years when the fund balance falls below $300,000; sponsors estimate an assessment of roughly $5 per licensee in current volumes and the bill caps any assessment at $25 per licensee per year. "This is an insurance policy, a very cheap one," Echart said in opening remarks.

Sarah Swanson, commissioner of the Department of Labor and Industry, told the committee the department administers nearly 200 occupational license types and litigated complaints can produce unpredictable costs that get passed back to licensees. Quinlan O’Connor, chief legal counsel for the department, said the agency reviewed recent fiscal years and found very few cases that would have drawn on a pooled fund, arguing the measure is a low‑cost protection for rare events.

Representatives of affected professions — including the Montana Chiropractic Association and the Montana Athletic Trainers Association — supported the bill as a practical way to avoid dramatic fee swings for many licensees caused by a single expensive case. Supporters emphasized the statutory limits in the draft: the fund would be statutorily capped at $300,000 and would sunset on June 30, 2031 unless reauthorized.

No opponents appeared in the room or online during the hearing and committee members posed no substantive objections; the hearing concluded without a formal vote.

The bill will move through committee for further consideration and potential amendment.