Minutes for North Dakota Legislative Workforce Committee in Bismarck

NORTH DAKOTA LEGISLATIVE COUNCIL
Minutes of the
WORKFORCE COMMITTEE
Wednesday, July 29, 2009
Roughrider Room, State Capitol
Bismarck, North Dakota
Senator Tony S. Grindberg, Chairman, called the
meeting to order at 9:00 a.m.
Members present: Senators Tony S. Grindberg,
Tim Flakoll, Karen K. Krebsbach, Dave Nething,
Larry J. Robinson, Mac Schneider, Tom Seymour,
Ryan M. Taylor; Representatives Donald L. Clark,
Eliot Glassheim, Nancy Johnson, Lee Kaldor, Lisa
Meier, Corey Mock, Lee Myxter, Michael R. Nathe,
Ken Svedjan, Clark Williams
Member absent: Senator Ray Holmberg
Others present: See Appendix A
Chairman Grindberg welcomed committee
members and called on committee counsel to review
the Supplementary Rules of Operation and Procedure
of the North Dakota Legislative Management.
TECHNOLOGY STUDIES
Chairman Grindberg distributed a document
(Appendix B) prepared by the State Science and
Technology Institute which addresses technologybased
economic development.
Chairman Grindberg called on committee counsel
to present two background memorandums entitled
Technology-Based Entrepreneurship and Economic
Development Best Practices - Background
Memorandum and Certified Technology Parks Study -
Background Memorandum.
Chairman Grindberg called on Mr. Robert E.
Olson, Regional Director, Economic Development
Administration, United States Department of
Commerce, Denver, Colorado, to make a presentation
regarding research and technology best practices. He
made a computer presentation and distributed a
printed copy of the presentation (Appendix C). He
reviewed the role of the Economic Development
Administration as it relates to support for technologybased
economic development, reviewed trends in
technology-based development, and reviewed
examples of best practices being implemented by
other states.
In response to a question from Representative
Glassheim, Mr. Olson said in looking at North
Dakota's unique strengths North Dakota has a very
healthy, diverse economy, which tends to strengthen
the economic development dynamic. He said this is a
great time for North Dakota to take initiatives because
due to North Dakota's relative economic development
health, North Dakota may be able to leap ahead of
other states that are having budgetary problems.
In response to a question from Representative
Kaldor, Mr. Olson said one step universities can take
to help with research and technology is to make sure
they continue to provide technical assistance outside
their walls. He said it is important for institutions of
higher education to work with the private sector and to
encourage their staffs to act in entrepreneurial ways.
In response to a question from Representative
Nathe, Mr. Olson said it may not be necessary to take
legislative or policy actions in order to attract federal
research in the state; however, it may be helpful to
look across the federal research realm to see where
there are expanding opportunities, to consider what
has worked well for other states, and to consider the
unique assets of North Dakota.
In response to a question from Senator Nething,
Mr. Olson said he is not familiar with the United States
Department of Energy's Experimental Program to
Stimulate Competitive Research (EPSCoR).
In response to Senator Nething's question,
Mr. Mark Hoffmann, University of North Dakota, stated
EPSCoR funding is typically used for infrastructure
improvement for research and development.
Chairman Grindberg said it might be helpful to
have a presentation regarding the EPSCoR program
at a future meeting.
Chairman Grindberg called on Mr. Delore
Zimmerman, Red River Valley Research Corridor,
Grand Forks, for comments regarding the status of the
Red River Valley Research Corridor. He distributed a
brochure entitled 2010 Red River Valley Research
Corridor - A Plan to Build a More Vibrant Technology-
Based Economy For the Region, copies of which are
on file in the Legislative Council office.
Mr. Zimmerman reviewed the Red River Valley
Research Corridor's priority goals for 2010:
1. Expand federal funding for research, training,
and manufacturing contracts;
2. Attract venture capital from outside the region;
3. Create new jobs by building homegrown hightech
companies and technologies in the
region;
4. Commercialize intellectual property developed
in the corridor;
5. Facilitate vigorous networking of researchers,
business, entrepreneurs, advanced service
providers, and investors; and
6. Create regional connections to the corridor
within and outside of the state.
Workforce 2 July 29, 2009
In response to a question from Senator Schneider
regarding steps the state could take to address North
Dakota's lack of venture capital, Mr. Zimmerman said
tax credits for angel capital would be helpful. He said
venture capital is a unique beast, and it is likely that in
North Dakota it would be most helpful to focus on
investment capital.
Chairman Grindberg called on Mr. Paul Lucy,
Director, Division of Economic Development and
Finance, Department of Commerce, for comments
regarding the two technology studies. He said during
times of recession there is typically increased
entrepreneurialism. He said if North Dakota
experiences an increase in entrepreneurialism the
state will be in a favorable position to do well and
capitalize.
Mr. Lucy said one of the primary priorities for the
state should be leveraging assets of higher education
as they relate to technology and entrepreneurial
development. He said one thing that could help the
state is aggressive marketing of North Dakota's
capabilities and programs.
Mr. Lucy said programs existing in North Dakota
that will help further technology and entrepreneurial
development include Innovate ND, North Dakota
Ambassadors Program, Experience North Dakota,
investment tax credits, programs to link
entrepreneurial and existing enterprises, assistance in
identifying markets that might exist for entrepreneurs,
and Bank of North Dakota programs.
Mr. Lucy said upcoming programs that may assist
technology and entrepreneurial development include
using North Dakota Development Fund money for
entrepreneurial centers, technology-based
entrepreneurial development, upgrading the
Innovate ND program, and progressively promoting
entrepreneurship programs.
Mr. Lucy said two of the most important elements
in assisting entrepreneurship are:
1. Supporting incubators that can provide broad
levels of support; and
2. Providing upfront capital such as investment
tax credits for angel investment, seed capital
investment, and agricultural business
investment.
In response to a question from Senator Flakoll,
Mr. Lucy said the Department of Commerce has
recognized there are some industries that are
experiencing a lack of new graduates to fill workforce
needs, whereas others have not been hindered by the
number of graduates. For example, he said, in some
areas of the aerospace sector new graduate needs
are being met whereas in other areas of the
aerospace sector there are needs for increasing
graduate rates. He said at this point and time the
Department of Commerce has been more focused on
what the North Dakota institutions of higher education
can offer versus focusing on areas of shortage.
In response to a question from Senator Seymour,
Mr. Lucy said that one definition of technology-based
entrepreneurship is business opportunity that uses
new technology or innovations or new uses for
technology.
Senator Grindberg said at a future meeting the
committee will plan on receiving a formal list of the
Department of Commerce programs which includes
an evaluation of these programs and also addresses
whether there may be gaps in some programs.
Chairman Grindberg called on Ms. Jolynne
Tschetter, Department of Commerce, for comments
regarding the committee's two technology studies.
She said her work at the Department of Commerce
includes working with interested parties to link higher
education with economic development. She said she
seeks to build long-term relationships that link higher
education with businesses, including research
relationships, consulting relationships, and
relationships resulting in or resulting from centers of
excellence.
Ms. Tschetter said gaps in education can in part be
addressed by educating students as to career
opportunities.
Chairman Grindberg called on Mr. Justin Dever,
Department of Commerce, for comments regarding
the committee's two technology studies. His
testimony focused on the centers of excellence
economic development program, Innovate ND, and
the new technology-based entrepreneurial grant
program. He provided a program overview
(Appendix D) of the North Dakota centers of
excellence program and written testimony
(Appendix E).
Chairman Grindberg called on Ms. Elaine J.
Fremling, Chairman, North Dakota Economic
Development Foundation, for comments regarding the
committee's study of the foundation's effectiveness.
She provided written material (Appendix F).
Senator Grindberg said he participated in the
interim study that resulted in the formation of the
Department of Commerce. He said in the late 1990s
the trend seemed to be privatization of economic
development; therefore, the decision was made to
create a department of commerce that had a private
partnership through the foundation. He said one of
the goals in establishing a foundation was to help
during transitions from one executive administration to
the next.
In response to a question from Representative
Glassheim, Ms. Fremling said although the foundation
membership does not specifically require Native
American representation, one of the new members
coming on the foundation is Native American. She
said since its inception, the foundation has raised
approximately $260,000 from private partners.
Chairman Grindberg called on Mr. Gaylon Baker,
Economic Development Association of North Dakota,
for comments regarding the committee's
two technology studies. He said the Economic
Development Association of North Dakota represents
local developers, who are the final delivery system for
economic development programs and policies
Workforce 3 July 29, 2009
established by the Legislative Assembly and the North
Dakota University System.
Mr. Baker said that as local economic development
relates to technology-based companies, if a company
is not technology-based, the company will be in
trouble due to its inability to survive. Additionally, at
the local level economic developers are active in
making new businesses mentors with the hopes of
helping new entrepreneurs.
In response to a question from Senator Seymour,
Mr. Baker said that as an economic developer if he
becomes aware of a gap within his community, he will
pursue the filling of that gap. He said in the Dickinson
area he is lucky that there is a diverse economy;
however, he is working to improve the biotechnology
sector.
WORKFORCE STUDIES
Chairman Grindberg called on committee counsel
to review a memorandum entitled Workforce Studies -
Background Memorandum.
Representative Glassheim said that at a future
meeting it would be helpful to review which of the
2007-08 interim consultant recommendations have
been met or addressed through legislation.
Chairman Grindberg called on Mr. Larry Anderson,
Department of Commerce, for comments regarding
the committee's two workforce studies. He distributed
written testimony (Appendix G) from Mr. Jim Hirsch,
Director, Division of Workforce Development,
Department of Commerce. He said Mr. Hirsch's
testimony addresses a report on the North Dakota
talent initiative and the federal and state budget
alignment in support of the talent initiative.
Additionally, Mr. Anderson distributed the
registration material (Appendix H) for the 2009
Governor's Workforce Summit, which will be held
October 8-9, 2009, in Fargo, North Dakota. He
extended an invitation to all Workforce Committee
members to attend this meeting. He said the
registration fee will be waived for the committee
members.
In response to a question from Senator Robinson
regarding a list of "hot jobs" received from the
Department of Commerce during the legislative
session and the appearance that these "hot jobs" are
not consistent with the open job listings from Job
Service North Dakota, Mr. Anderson said the
Department of Commerce and Job Service North
Dakota have become aware of this concern and the
issue is being addressed to better synchronize these
two lists of job opportunities.
In response to a question from Senator Schneider,
Mr. Anderson said in 2007 the legislative
appropriation for Operation Intern was $600,000,
which was designed to fund 200 internships. He said
of these 200 internships approximately 25 percent
were in technology-based industries. He said the
appropriation for the 2009-11 biennium has been
increased to $900,000, which is intended to fund
300 internships.
Chairman Grindberg called on Mr. William G.
Goetz, Chancellor, North Dakota University System,
for review of legislation impacting the North Dakota
University System as that legislation relates to
workforce and economic development.
Mr. Goetz reviewed the following Higher Education
Roundtable cornerstones:
1. Economic development connection;
2. Education excellence;
3. Flexible and responsive system;
4. Accessible system;
5. Funding and rewards; and
6. Sustaining the vision.
Mr. Goetz said the first cornerstone of economic
development connection recognizes that technology
plays a major role in education.
Mr. Goetz said during the 2009 legislative session,
strides were made in addressing the issue of
affordability of education. He said of particular
interest the North Dakota University System will be
working on marketing the two-year community
colleges. Additionally, he said, there is ongoing
activity with the centers of excellence program.
In response to a question from Senator Schneider
regarding whether there has been an increase in the
retention of graduates from institutions of higher
education in North Dakota, Mr. Goetz said the state is
realizing continued increases in the number of North
Dakota higher education graduates retained following
graduation. He said this retention includes non-North
Dakota residents as well as international students.
However, he said, there are areas in which the state
could improve, including retention activities and
improved funding of technical education.
Chairman Grindberg called on Mr. Baker for
comments regarding the committee's two workforce
studies. He said local economic developers are active
in growing communities and in a growing workforce.
He said the workforce needs in the state vary by
community.
Mr. Baker said it is his belief that the state is better
at retaining students from two-year institutions than it
is at retaining students from four-year institutions.
In response to a question from Senator Grindberg
regarding a recent Moody's report indicating North
Dakota may lag behind other states as these other
states come out of the recession, Mr. Baker said
although it is not unreasonable to believe that "when
you don't hit the floor hard, you don't bounce as high,"
he did recognize 2010 looks to be a great year for
North Dakota.
Chairman Grindberg called on Mr. Joe Becker, Tax
Department, for comments regarding the committee's
two workforce studies. He said the Tax Commissioner
was unable to attend the committee meeting;
however, he is very interested in the committee's
activities, and members of the Tax Department are
available to assist the committee as it pursues its
interim studies.
Workforce 4 July 29, 2009
COMMITTEE DISCUSSION
AND INTERIM PLANNING
Senator Nething said he has concerns regarding
workforce issues relating to the public sector.
Specifically, he said, upcoming retirements in the
public sector will result in an experience gap. He said
there may be benefits in retaining some of our public
sector retiring workers; however, this may require
some increased flexibility to deal with issues such as
retirement benefits and health benefits. Additionally,
he said, it may be beneficial to increase the use of
interns in public sector fields such as physical
science, information technology, and engineering.
Senator Robinson said he agrees with Senator
Nething. Additionally, he said, he would support the
idea of the committee meeting in each of the
quadrants of the state and he supports the idea of
holding a joint meeting with the Higher Education
Committee and Education Committee.
Senator Grindberg recognized there are workforce
needs relating to the public sector; however, it is also
important to recognize the Employee Benefits
Programs Committee has been charged with the
receipt of a report from Human Resource
Management Services on the outcome of its study
and evaluation of steps the state could take to recruit
and retain state employees in state government
employment as the state employees reach retirement.
Representative Meier said that as the committee
pursues its workforce studies, it should consider the
specific workforce needs relating to the health care
sector, especially in the rural areas in the state.
Representative Svedjan said he recently came
across material from the National Conference of State
Legislatures regarding student internships. He said
there may be federal money appropriated to the
United States Department of Agriculture which may be
available for student internships. He said if possible
he would encourage the state to use this funding
source for student internships. He said if this federal
money is available, the question may arise whether at
the state level this program would be better managed
by the North Dakota Department of Commerce or by
some other state entity.
Senator Schneider said a recent Council of State
Government's publication reported states such as
Ohio have been leveraging economic development
with the economic development activities of
neighboring states. He said North Dakota may be
able to benefit from a program like this.
Senator Nething said he supports the idea of the
committee attending the Governor's Workforce
Summit.
Chairman Grindberg said it may be possible to
schedule the next meeting to coincide with the
Governor's Workforce Summit. The next meeting is
tentatively scheduled for October 7, 2009, in
Wahpeton. He said he will seek Legislative Council
approval for committee member reimbursement for
expenses as well as per diem for attending the
two-day Governor's Workforce Summit in Fargo. He
said the third committee date will tentatively be set for
December 1, 2009, in Bismarck.
No further business remaining, Chairman
Grindberg adjourned the meeting at 2:20 p.m.
___________________________________________
Jennifer S. N. Clark
Committee Counsel
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