BOISE, Idaho (AP) — House lawmakers have killed legislation allowing FBI background checks on some state employees despite warnings from the bill's sponsor that doing so will cause the state to lose critical federal funding.

The proposal would have allowed the Department of Labor to conduct FBI fingerprint-based background checks on employees, applicants, contractors, interns and other. The federal government requires the checks for any employee who handles confidential taxpayer information.

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The Spokesman-Review reports that lawmakers like Rep. Heather Scott, a Republican from Blanchard, argued that the bill was "federal bullying" while debating against the bill on Monday. The bill died 27-43.

Georgia Smith, spokeswoman for the state Department of Labor, says the agency is currently reviewing its options.

Failure to comply with the background-check requirement could put the state at risk of losing millions of federal dollars that help administer Idaho's unemployment benefit program. Last year, Idaho received $13.8 million.

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