Doing business in Montana : final report of the Economic Affairs Interim Committee

2009·1.2 MB·English

by  Geiger, Andrew

HJR 39 Study of Academic Research and
Commercialization and
HJR 28 Study of Business Infrastructure
and Economic Development
Final Report of the
Economic Affairs Interim Committee
Legislative Services Division Prepared by Andrew Geiger and
P.O. Box 201706 Staff
Helena, IVIT 59620-1706 Office of Research and Policy Analysis
PHONE: [phone] March 2009
FAX: [phone]
http://leg.mt.gov
332.0415
.E281
2009
MonlanaSlateLibrary
3 0864 1005 8721 4
Economic Affairs Interim Committee
Members
Representative Scott Mendenhall, Presiding Senator Roy Brown
Officer P.O. Box 22273
214 Solomon Mountain Rd. Billings, MT 59104-2273
Clancy, MT 59634-9213
Senator Ken 'Kim' Hansen, Vice Presiding
Representative Mike Milburn Officer
276 Chestnut Valley Rd. P.O. Box 686
Cascade, MT 59421-8204 Harlem, MT 59526-0686
Representative Michele Reinhart Senator Frank Smith
P.O. Box 5945 P.O. Box 729
Missoula, MT 59806-5945 Poplar, MT 59255-0729
Representative Bill Thomas Senator Donald Steinbeisser
1200 Adobe Dr. 11918 County Rd. 348
Great Falls, MT 59404-3732 Sidney, MT 59270-9620
Staff
Andrew Geiger, Lead Staff through August 22, 2008
Bart Campbell, Attorney
Pat Murdo, Research Analyst and Staff for HJR 48 and SJR 13
Claudia 'CJ' Johnson, Secretary
Digitized by the Internet Archive
in 2011 with funding from
IVIontana State Library
http://www.archive.org/details/doingbusinessinm2009geig
Table of Contents
Executive Summary
I. . 1
HJR 39: Economic Impact of University Research 4
II.
Research Positions for Students 4
Commercialization of Research 5
MUS Research-Related Jobs by Industry 6
Funding Sources 7
MUS Research and Development Expenditures 8
Research and Development Expenditures 9
Research and Development Expenditures Per Capita 10
Out-Migration of Montana Graduates 10
Summary/Conclusions 11
III. HJR 28: Study Business Infrastructure 12
Montana's Gross Domestic Product 12
GDP
State in Actual Dollars 14
GDP
Billings Total in Millions of Dollars 15
GDP
Great Falls Total in Millions of Dollars 16
GDP
Missoula Total in Million of Dollars 17
Local Businesses by the Numbers 17
National Perspective 23
Transportation and Energy 24
Airplane Passengers 25
Energy 25
U.S. Energy Use by Type 27
Geographical Location of Energy SourcesA/aiue-Added Sites 28
Coal Production in the United States 29
Coal Production in Montana 30
Summary/Conclusions 30
IV. Economic Affairs Interim Committee Meeting Summaries 32
Appendix A: Summary of Chamber of Commerce Survey on Business Infrastructure in
Montana and Impediments to, or Needs of, Business
Figures and Tables
Figure 1: Montana University System (MUS) Research and Technology Transfer Report 6
. .
Figure 2: MUS Research-Related Jobs by Industry 6
Figure 3: MUS Research and Development Expenditures 8
Figure 4: Research and Development Expenditures Per Capita 9
Figure 5: Research and Development Expenditures Per Capita in the Region 10
Figure 6: Percent Changes in Real GDP by State 2006-2007 13
Figure 7: Per Capita Real GDP by State, 2007 14
I
Figure 8: State GDP in Actual Dollars 14
Figure 9: Billings GDP by Metro Area 15
Figure 10: Great Falls GDP by Metro Area 16
Figure 1 1: Missoula GDP by Metro Area 17
Figure 12: Montana Nonemployer Statistics (2006) 20
Figure 13: U.S. Energy Use by Type 27
Figure 14: Geographical Location of Energy SourcesA/alue-Added Sites 28
Figure 15: Coal Production in the U.S 29
Figure 16: Coal Production in Montana 30
Table 1 : Montana Businesses by Number of Employees 19
Table 2: Average Wage Per Job (in Dollars) by Montana Counties 21
Table 3: Comparison of Montana and Nation 23
Table 4: Airplane Passengers 25
)
Summary
Executive
I.
At the organizational meeting of the legislator" with an outside career, typically
Economic Affairs Interim Committee mean that a committee will meet for no
(EAIC), Representative Scott Mendenhall more than 10 total days during the entire
and Senator Ken Hansen were chosen as 18-month interim. The EAIC was able to
presiding officers. The Committee chose utilize conference calls in order to
to hold as many meetings outside of address specific decisionmaking needs,
Helena as possible for the purpose of and while nothing can replace face-to-
outreach to local communities. During this face interactions between committee
discussion, Committee members cited the members and the public, the EAIC
long distances Montanans travel during recommends the use of this tool in a
the legislative session to participate in the limited capacity to expand the
public process and the desire to attempt effectiveness of future interim
to repay this dedication and effort by committees.
ensuring that local concerns are given a
full vetting in Helena. This travel goal was
achieved, and these meetings were well The Committee chose to hold as many
attended. It is the opinion of the full meetings outside ofHelena as possible
membership of the 2007/2008 EAIC that for the purpose ofoutreach to local
efforts should be continued to bring the communities.
legislative process to the people of
Montana when feasible and consistent
with statutory responsibilities. The full The statutory requirements placed upon
membership of the EAIC would like to the EAIC are found in 5-5-223, MCA, and
thank all of those who participated in and read as follows:
attended these hearings.
5-5-223, Economic affairs interim
Interim committees are unique unto committee. The economic affairs interim
themselves in the legislative environment committee has administrative rule review,
and differ from state to state in those that draft legislation review, program
have part-time legislatures. Interim evaluation, and monitoring functions for
committees, typically through those they the following executive branch agencies
choose as presiding officers, have and the entities attached to agencies for
discretion for how they choose to best administrative purposes:
spend their time. Budgetary constraints, (1 department of agriculture;
plus the nature of being a "citizen (2) department of commerce;
,
(3) department of labor and industry; makeup of its membership but also by the
(4) department of livestock; study bills assigned to the committee.
(5) office of the state auditor and Study bills start as either House or
insurance commissioner; and Senate Joint Resolutions and must first
(6) office of economic be passed by both chambers. The full
development. roster is then sent to the entire
Legislature for polling so as to determine
In addition, two members of the EAIC are a priority list. The management of the
assigned to the Rail Service Competition Legislative Services Division makes an
Council as provided for in 2-15-251 1 analysis of study requirements relative to
MCA. Senator Ken Hansen and staff time and provides recommendations
Representative Mike Milburn filled this to the Legislative Council for ultimate
role for the 2007/2008 interim. Two approval and assignment to interim
members also serve as liaisons to the committees.
Board of Directors of the State
Compensation Insurance Fund (also
known as the State Fund) as provided for In addition to a n)onitoring role with
in 2-15-1019, MCA, a statutory provision regard to certain state agencies, the
that is designed to create a dialogue EAIC was assigned four study bills
between this unique state agency and the
dealing with health care, value-added
Legislature and keep members abreast of
agriculture, the economic benefit of
activities in the area of workers'
university research, and business
compensation and the State Fund's role
infrastructure needs.
in this insurance market. Representative
Mike Milburn and Representative Bill
Thomas filled this role and briefed the full
Committee at each meeting during the In addition to a monitoring role with
interim. The State Fund is regard to certain state agencies, the
administratively attached to the EAIC was assigned four study bills
Department of Administration, whose dealing with health care, value-added
monitoring functions fail under the State agriculture, the economic benefit of
Administration and Veterans' Affairs university research, and business
Interim Committee (SAVA), yet a infrastructure needs. The latter two
continued agreement between the two studies are included in this committee
committees allowed for this arrangement. report. Separate reports address the
other two studies. This Executive
The course of action of any interim Summary stands as official record of all
committee is determined not only by the other Committee business. The goal of
the Committee for the interim was to the 61^' Legislature. The Committee at its
increase avenues of dialogue between final meeting decided to support as a
the Committee members and maximize Committee bill a citizen-led proposal for a
the amount of information that reaches Health Policy Council. More information
the Committee. Locations for meetings on this proposal is in the HJR 48 report
were chosen so as to serve this goal, on health care reforms. The full
thus value-added agriculture took top membership of the 2007/2008 EAIC
billing in Miles City and Great Falls, while agreed that while the issues and ideas
meetings in Missoula and Bozeman discussed during Committee meetings
ensured a unique opportunity for are greatly important to the policy areas
interactions between legislators and within the Committee's purview, time
research faculty. In addition to homework constraints and the complicated nature of
assignments from the 2007 session, the specific topic areas assigned to the
Committee researched the following Committee resulted in more information
policy areas: workers' compensation than legislation.
insurance, local economic development
programs, Montana State University's The full membership of the 2007/2008
Extension Service, and residential EAIC concurs that information presented
contractors. by experts, stakeholders, and citizens
helped to inform their framing of the
The members of the EAIC initially issues and pursuit of possible subsequent
decided they would forward no committee individual legislation.
bills to their colleagues and successors in
HJR 39: Economic Impact of University
II.
Researcin
The Economic Affairs Interim Committee entertained questions, yet the bulk of
(EAIC) was assigned HJR 39 to analyze Committee time was dedicated to hearing
the competitiveness of the Montana directly from research faculty and those
University System (MUS) in the area of students in their employ and tutelage in
federal funding of high-tech and scientific order to understand both the nature of the
research by faculty and the correlating research being conducted across the
economic benefit due to the state and the funding sources that sustain
commercialization of discoveries found it. Both presiding officers of the EAIC
within this intellectual process. The understood in developing the agenda that
Committee instructed staff to approach while it was impossible to fully understand
this topic by creating a dialogue between the depth and diversity of this cerebral
the Committee and research faculty and enterprise through a tour of laboratories
their graduate and undergraduate and presentations by researchers, it was
students to better understand the work important to visit the campuses in
being done on the ground in this area. Missoula and Bozeman with a full
workday agenda to hear a sample of what
is being done from as many voices as
The EAIC was assigned HJR 39 to possible.
analyze the competitiveness ofthe
Montana University System in the area of Research Positions for Students
federal funding ofhigh-tech and scientific
research by faculty and the correlatJng This plan led to two Committee hearings
economic benefit due to the on each main campus that took the form
commercialization ofdiscoveries found of a tour of facilities and presentations by
research faculty and the undergraduate
within this intellectual process.
and graduate students who do a bulk of
the work generating scientific data used
for analysis. (It should be noted that not
Montana State University President
all facilities were available for a tour due
Geoffrey Gamble, University of Montana
to the security needed to store materials
President George Dennison, and
used in research in the area of national
Commissioner of Higher Education Sheila secuhty.) In many ways, it is the role of
Stearns addressed the Committee and
students that helps to display the nature