Senate committee backs unemployment tax-rate adjustment, hears plan for DMV data match

Majority Leader Steve Fitzpatrick opened House Bill 210 to the Senate Finance and Claims Committee, saying the bill would add a lower tax-rate class to Montana’s unemployment insurance schedule to return excess trust-fund balances to employers. Fitzpatrick asked the committee to consider the bill’s projected reductions in employer tax collections cited in the fiscal note.

Sarah Swanson, commissioner of the Department of Labor and Industry, told the committee Montana’s unemployment trust fund had an ending balance of $643,000,420 as of January and that actuarial review supported a modest rate-path reduction. Swanson said the change would not rework the tax table but would add “one lower rate” so the system can trigger a lower schedule when economic conditions allow; she told senators the change could save employers about $12.5 million in the first year shown on the fiscal note and roughly $25.8 million annually thereafter.

Swanson also described a separate fraud-detection provision in the bill that would perform a limited “pass/fail” match between unemployment claim data and motor vehicle records maintained by the Department of Justice. She said the agencies use compatible systems developed by the same vendor, and that the approach is a clean-room verification — “no data being exchanged” and no repository created — with a one-time motor-vehicle cost of about $18,000. If the automated match fails, claimants would still go through the existing paper-based verification process, Swanson said.

Alex Sterhan, director of external affairs at the Department of Justice, offered parallel support and described the match as an efficiency step that yields a red/green pass/fail output for staff review. Karen Treehorn, an administrative official in the motor vehicle division, stood for fiscal-note questions on DMV operations.

Committee members pressed Swanson on how often the automated match would produce “red” results and on follow-up procedures; Swanson said the division’s fraud team is small (three staff) and the automated flag is intended to reduce manual workload and shorten delays for legitimate claimants. Senators also asked about the accounting change that would allow the department to use overpayments across fiscal years; Swanson said the amount is relatively modest — roughly $18,000 in a fiscal year — and described the requested authority as an accounting convenience to avoid drawing funds back down from the trust to operate the division.

The committee closed the hearing and later moved forward with executive action to concur with the House on the bill.