A major breakthrough has developed for the Legislature's workers' compensation reform bill, with Gov. Brian Schweitzer's administration coming on board as the result of amendments that were agreed to just before a Wednesday hearing on the legislation.

Keith Kelly, commissioner of the Montana Department of Labor, was the first to speak before a Senate panel, stepping to the lectern and announcing that "as of 7 last evening, we're rising in support" of House Bill 334.

Kelly noted that it was "only a short month ago that we opposed this bill" and he told the Senate Business, Labor and Economic Affairs Committee that "this really is very significant legislation you have before you."

Supporters of the bill hailed it as the most sweeping workers' compensation legislation in the state's history, primarily aimed at ending Montana's distinction of having the highest workers' compensation rates in the nation.

The bill is projected to cut work-comp insurance rates for employers by 24 percent as of July 1 this year, saving about $100 million in costs, and an additional 15 percent, or about $40 million, over the next three to five years.

"I don't think you can understate the significance of the citizens' Legislature working together with the executive branch and coming together on a conclusion on a workers' compensation problem that is clearly bipartisan in nature," said the bill's lead sponsor, Rep. Scott Reichner, R-Bigfork.

Negotiations over the amendments have been under way for more than a month, and even as late as Tuesday afternoon, Reichner was uncertain whether agreement could be reached.

After the hearing, Reichner said he is confident the bill will advance quickly, possibly reaching Schweitzer's desk by the end of next week.

"We're confident can get the bill out and the governor says he's going to sign it," Reichner said.

"This is a jobs creator," he said, "and you're going to have businesses that will be able to provide more better paying jobs and able to provide pay increases when they can provide it."

More than 20 people spoke Wednesday in favor of the bill. Supporters represented the insurance industry, hospitals and other medical interests as well as employers from a variety of businesses.

"It benefits all businesses in the state ... this is a great bill," said Joe Unterreiner, executive director of the Kalispell Chamber of Commerce, which has regarded workers' compensation reform as the top priority for this session.

Terry Kramer, speaking for the Kramer Enterprises construction company in Kalispell, described paying hourly workers' compensation rates that far exceed all other payroll deductions.

"To keep Montana competitive, to keep small businesses competitive, to keep the construction industry competitive, we need to have work comp reform now," he said.

People representing trucking, telecommunications, logging and wood products, even banks, offered similar accounts of paying far more than their counterparts in neighboring states for workers' compensation.

Tom Lund of Rocky Mountain Bank in Kalispell said rates are about 50 percent higher for covering tellers and other employees in Montana compared to seven other states where the bank does business.

A central provision in the bill would limit benefits for injured workers to five years from the time of injury, followed by a possible two-year extension.

But one of the most significant compromise amendments would allow injured workers to make successive appeals every two years after the initial five-year period before a panel of three doctors appointed by the Department of Labor.

One of the main reasons for Montana's high rates is that claims that carry on well beyond five years, with injured workers picking and choosing doctors and specialists for treatment.

"We don't have any closure. We keep people in the game. People stay in the system and four years into it they re-up. So we had to look at that," Reichner told the committee. "When the governor talks about bloat in the system, that's where it is."

The bill also changes the system to establish a primary physician empowered make referrals to surgeons or other specialists as needed. Those specialists would be paid 10 percent less in exchange for not having the responsibilities of the primary physicians, who would get 10 percent increases in compensation.

The amendments, which were negotiated with the influence of Sen. Ryan Zinke, R-Whitefish, were regarded as a significant improvement by a number of groups and people who were prepared to testify against the bill.

Zinke testified in support of the legislation, saying the amendments strike a fair balance.

"This is a great bill," he said.

Several people representing the field of physical therapy, for instance, said they now support the bill, provided that the Senate develop a technical amendment that would ensure physical therapists can respond to worker injury cases the way they currently do.

Comments from committee members suggested those changes could be accommodated.

But there also were nearly 20 people - many of them trial lawyers and union representatives - who spoke against the bill.

Several law enforcement officers who had sustained serious injuries in the line of duty testified against the bill. They said that even though they continue to work as officers, they are concerned the bill would jeopardize workers' compensation care they will require for life. One of them suggested an exception for law enforcement officers and firefighters.

Sen. Bruce Tutvedt, R-Kalispell, asked Reichner about partially disabled workers that will justifiably require care well beyond five years.

"They will have an opportunity to continue to receive benefits because they will go through an appeal period every two years," Reichner said, adding that the five-year limit does not apply to workers classified with permanent disabilities.

Representing several union groups, J.D. Lynch said the bill is an affront to workers because it reduces partial disability benefits. Several trial attorneys expressed similar reasons for opposing the bill.

"You might wonder why all the proponents represented businesses and not one of the proponents represented workers," said Lynch, who described the bill as an "employers insurance program."

Reporter Jim Mann may be reached at 758-4407 or by email at jmann@dailyinterlake.com.