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Call to Order: By CHAIRMAN CHUCK SWYSGOOD, on April 6, 1999 at

8:00 A.M., in Room 108 Capitol.


Members Present:

Sen. Chuck Swysgood, Chairman (R) Sen. Tom Keating, Vice Chairman (R) Sen. Tom A. Beck (R) Sen. Chris Christiaens (D) Sen. William Crismore (R) Sen. Eve Franklin (D) Sen. Greg Jergeson (D) Sen. Bob Keenan (R) Sen. J.D. Lynch (D) Sen. Dale Mahlum (R) Sen. Ken Mesaros (R) Sen. Ken Miller (R) Sen. Arnie Mohl (R) Sen. Linda Nelson (D) Sen. Debbie Shea (D) Sen. Mike Taylor (R) Sen. Daryl Toews (R) Sen. Mignon Waterman (D) Members Excused: None.

Members Absent: None.

Staff Present: Shannon Gleason, Committee Secretary Pam Joehler, Legislative Branch Taryn Purdy, Legislative Branch Please Note: These are summary minutes. Testimony and discussion are paraphrased and condensed.

Committee Business Summary:

Hearing(s) & Date(s) Posted: HB 252, HB 14, HB 608, HB 7, HB 15, HB 127, HB 420, HB 92, HB 9, 4/3/1999 990406FCS_Sm1.wpd


April 6, 1999 PAGE 2 of 25 Executive Action: HB 9, HB 7, AND PARTIAL HB 14 HEARING ON HB 252 Sponsor: REP. DOUG MOOD, HD 58, MISSOULA Proponents: Peter Blouke, Department of Commerce Ralph Peck, Department of Agriculture Gene Vuckovich, Montana Rural Development Port Ralph Khoser, Department of Commerce, Small Business Development Counsel(SBDC) Shirley Beck, Sapphire Gallery Dick Crofts, Commissioner of Higher Education Jim Davidson, Montana Economic Development Association (MEDA) Jim Smitham, Montana Ambassadors Bob Taylor, Montana Manufacturing Extension Center John Youngberg, Montana Farm Bureau Montana Stockgrowers Association Montana Grain Growers Ken Maki, Montana Farmers Union George Dennison, University of Montana Connie Daniels, Headwaters RC&D Randy Hanson, Montana Rural Development Tim Ryan, Executive Director Hig

–  –  –

Opening Statement by Sponsor:

REP. MOOD advised this bill was a result of the Jobs and Income Committee and originally appropriated $7,200,000.00. There is currently only $2,000,000.00 appropriated in the bill. REP. MOOD explained the Jobs and Income Commission in addition to o section seven had been amended out of the bill. The rest of the appropriations have been cut in half. Rep. Mood stated the remaining programs were identified and recommended by the 2005 task force and other focus groups as programs needed by the state to further the economic climate.

Proponents' Testimony:

Peter Blouke, Department of Commerce, advised this was a cornerstone to the Jobs and Income Development package proposed by the Governor. Mr. Blouke felt the programs would help Montana move up in the ranking for economic development, help existing businesses, attract new businesses, and provide jobs with livable wages. Mr. Blouke noted this supports small businesses.

Ralph Peck, Department of Agriculture, stated the department worked closely with the 2005 task force to develop a plan for the future of agriculture. Mr. Peck presented an amendment for consideration, EXHIBIT(fcs74a01).

Gene Vuckovich, Montana Rural Development Partners, read EXHIBIT(fcs74a02).

Ralph Khoser, Montana Small Business Development Center, stated the small business program was the nuts and bolts of economic development. Mr. Khoser advised the program was a Federal Program with centers located regionally within the state. Mr. Khoser was concerned because the federal match was in jeopardy as there was insufficient state money to match. Mr. Khoser felt there was a return on investment for the money provided by the state and passed out EXHIBIT(fcs74a03) and EXHIBIT(fcs74a04) and reviewed the numbers for the committee.{Tape : 1; Side : A; Approx. Time Counter : 8:20} Shirley Beck, The Sapphire Gallery, read EXHIBIT(fcs74a05).

Dick Crofts, Commissioner of Higher Education, rose in support of the bill and felt it was a reasonable proposal for economic development.

Jim Davidson, MEDA, read EXHIBIT(fcs74a06).

–  –  –

Jim Smitham, Montana Ambassadors, read EXHIBIT(fcs74a07).

Bob Taylor, Montana Manufacturing Extension Center, handed out EXHIBIT(fcs74a08), and reviewed it with the committee. Mr. Taylor advised the program funds had been cut in half and felt the funding needed to be restored as the programs were essential for the state. {Tape : 1; Side : A; Approx. Time Counter : 8:43} John Youngberg, Montana Farm Bureau, urged the committee to support the growth through agriculture program and listed neighboring states and Canada's contribution for their program.

Mr. Youngberg also thought the agriculture program was an investment to the state, not a cost.

Ken Maki, Montana Farmers Union, advised Montana is changing and there were many struggles facing agriculture. Mr. Maki felt the Co-operative Development Center should be reinstated.

George Dennison, University of Montana, rose in support of the bill. Mr. Dennison stated the university campuses were very involved in economic development working with small businesses and the Department of Commerce.

Connie Daniels, Headwaters RC&D, read EXHIBIT(fcs74a09). {Tape :

1; Side : B; Approx. Time Counter : 0} Randy Hansen, Montana Rural Development, advised the committee the programs in the bill were all tools needed to improve Montana. Mr. Hansen felt if one piece of the puzzle was missing the entire program would fall apart and urged the committee to restore full funding of the programs.

Tim Ryan, High Plains Development Authority, thought the Small Business Development Council was a needed resource for all businesses. Mr. Ryan gave examples of businesses that had been assisted.

Richard Krott, Rocky Mountain Trade Corridor (RMTC), stated the mission of the RMTC was to assist developing exporting markets.

Montana resources are not competitive in the market place and Mr.

Krott felt this was a result of the state not investing in the programs like others do.

Evan Barrett, MEDA, urged the committee to restore the original funds. Mr. Barrett felt the original bill was well thought out and designed by the grass roots of Montana, and as it sits the program was incomplete. Mr. Barrett advised the committee there were programs in section 13 eliminated because the entire section

–  –  –

was removed. He urged the committee to replace four programs:

Certified Communities, a state program for local and state efforts to recruit businesses, Local Leadership, and Small Business Innovative Research. Mr. Barrett handed out EXHIBIT(fcs74a10).

Don Allen, Western Environmental Trade Association, felt it was important to have input from people who have succeeded in business. He was disappointed that the commission idea was scrapped. Mr. Allen noted there was no way to measure the effectiveness of the program.

Tom McCoy, Montana State University, supported the bill and asked that the funding be restored to the original level.{Tape : 1;

Side : B; Approx. Time Counter : 8:55} Billie Lee, MEDA Lake County, explained they served a rural community and although they are the fourth fastest growing county, Ms. Lee noted the farming income has been declining since

1992. Ms. Lee felt the increased bureaucracy argument was not valid and the funds should be distributed on a need basis. Ms.

Lee reviewed several jobs and businesses that are running because of the programs.

Ron Ueland stated this was a critical time for agriculture in the state. Mr. Ueland felt there was an agriculture revolution going on and Montana was on the sidelines. Mr. Ueland thought it was time to invest in entrepreneurship.

Gail Jester, Helena Industries, advised there were limited resources in the state to assist in establishing manufacturing facilities that were cost accessible to the people. Ms. Jester noted Helena Industries would not have been able to start their manufacturing facility without the assistance of Montana Manufacturing Services and asked that their funding be restored.

Webb Brown, Montana Chamber of Commerce, stated manufacturing and agriculture were critical to the state and urged the committee to support the bill with restored funding.

John Cadby, Montana Bankers Association, rose in support of the bill.

Gloria Paladicheck, Richland Economic Development, urged the committee to restore part of section 13, as it was essential to Eastern Montana.

–  –  –

Cathy Conover, Montana State University, informed the committee of the number of jobs and increased incomes the Manufacture Extension Centers had generated or saved, and asked the committee to restore the funding for the programs.

SEN. NELSON asked to be listed as a proponent.

Questions from Committee Members and Responses:

SEN. WATERMAN wanted to know when the last Certified Community was established. Andy Poole, Department of Commerce, advised it was in 1995. SEN. WATERMAN asked why that was. Mr. Poole advised it was because of lack of funds and there was not a pool of people within the local communities for support.

SEN. NELSON wanted to know where the leadership portion was located. Mr. Vuckovich advised it was in section 13, however that section was amended out.

SEN. KEATING commented that the apprenticeship training was cut and asked if there was an apprenticeship training program being funded in another bill. Mr. Poole advised it was funded in HB 2.

SEN. CHRISTIAENS asked how the department would measure the outcome of the programs. Mr. Poole advised there were charts for specific objects the department was striving to achieve and advised he would provide them for the committee.

SEN. CHRISTIAENS asked Mr. Poole to explain the new oracle licensing system, and why the fees were increasing so much. Mr.

Poole advised there would be a one time only increase in the fees to set everyone up on the system. Once the system was running the fees would be decreased.

SEN. MAHLUM referred to section two and asked if the department already received money to be used for increased trade efforts.

Mr. Poole advised $200,000.00 in bed taxes were used to promote travel and film development in foreign markets.

SEN. MAHLUM, asked if the additional money requested by Ralph Khoser was for programs similar to the Vo-Tech's, Department of Commerce, and some universities were using. Mr. Khoser advised the program was called Next Level and was a practical training being done by some chambers. {Tape : 1; Side : B; Approx. Time Counter : 9:15}

–  –  –

SEN. TOEWS commented the money does not look sufficient to accomplish what it was designed to do. REP. MOOD advised this money was in addition to funding already in place. Mr. Blouke advised there were a number of new proposals included in the bill and the additional funds were to assist programs already established and operating on very limited budgets.

SEN. KEATING asked why section one was in this bill rather than HB 2. Mr. Blouke advised it was in there to send a message that Montana was moving forward.

Closing by Sponsor:

REP. MOOD stated Montana was filled with small businesses and people were dependent on the programs contained in this bill to survive.

Several letters of support are enclosed in the exhibits in the meeting minutes.

–  –  –

Opponents: None

Opening Statement by Sponsor:

REP. JOHNSON passed out and reviewed a list of the projects contained in the bill, EXHIBIT(fcs74a11). REP. JOHNSON advised this was the Governors's bonding bill and included several

–  –  –

deferred maintenance projects. {Tape : 2; Side : A; Approx. Time Counter : 0}

Proponents' Testimony:

{Tape : 2; Side : A; Approx. Time Counter : 9:25} Betty Babcock read EXHIBIT(fcs74a12).

Dick Crofts, Commissioner of Higher Education, urged the committee to support the three university projects: the library at MSU Bozeman, the $2,000,000.00 for campus maintenance, and the Rural Technology Center located at Western.

George Dennison, University of Montana, felt the projects for the universities assisted students and the local communities.

Sheila Stearns, Chancellor at Western Montana College, advised the committee the library expansion project also included deferred maintenance for the library.

Cathy Conover, Montana State University, passed out EXHIBIT(fcs74a13) and reviewed the safety concerns involved with the building.

Ingrid Danielson, Department of Labor and Industry, advised the Job Service building is extremely inadequate and not designed for the technology being used.

Ralph DeCunzo, Department of Military Affairs, stated they had three projects and urged support for them. Mr. Decunzo advised the committee some existing building would be offered to the state for use and the department was consolidating operations to reduce costs. Mr. DeCunzo advised HB 14 finances several projects by utilizing Federal funds.{Tape : 2; Side : A; Approx.

Time Counter : 9:45} Rick Day, Department of Corrections, handed out a fact sheet EXHIBIT(fcs74a14) and reviewed the projects. Mr. Day also handed out and reviewed an amendment, EXHIBIT(fcs74a15), he asked the committee to consider. Mr. Day reminded the committee the corrections budget was $5,500,000.00 below the executive request.

Ben Darrow, U of M Students, rose in support of the improvements on the campuses and explained the students have increased fees and paid for renovation to several university class rooms.

–  –  –

Lois Menzies, Department of Administration, rose in support of the Capitol building renovation.

Jake Ankeny, MSU Students, urged support for the library renovation at Bozeman.

Roger Hagen, Nation Guard, submitted a witness statement, EXHIBIT(fcs74a16).

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