Economic development supporters frustrated by bill's demise
Helena - Economic development officials joined State Auditor John Morrison this week in expressing regret and concern that a bill creating the Montana Venture Capital Formation Act was defeated on third reading in the Senate.
The legislation, SB 465, was the product of a nearly year-long cooperative effort to develop legislation that would bring venture capital to Montana. The coalition working on the Venture Capital Act included Lt. Gov. Karl Ohs, David Gibson of the governor's Economic Development Office, the Department of Commerce, the Department of Revenue, the State Auditor's office and economic development and entrepreneurial leaders from across the state.
SB 465 would have created a private, professionally run venture capital fund in which institutional investors could invest. It was modeled after proven, successful programs in other states. After extensive debate on the Senate floor, the bill passed 27-23 on second reading. Two days later the bill died 25-25 on a nearly party line vote on third reading
"There's a lot of rhetoric from Republican legislators claiming to support economic development and Montana business ventures," Morrison said. "But when given the opportunity to support a proven economic development model, they let partisan politics override positive policy."
Morrison said the bill's defeat was particularly disappointing given the support Governor Martz expressed for it in her State of the State Address in January.
"This was the right thing to do for Montana," Morrison said.
Economic development officials from across the state supported the legislation as a valuable tool in attracting business development to Montana.
"I strongly supported the merits of the Venture Capital Formation Act," said Liz Harris, president of Jobs Now Inc., an economic development organization in Kalispell. "The lack of venture funding in Montana places our businesses at a distinct disadvantage and discourages new business formation. Montana has to take some aggressive steps forward or we will continue to fall further and further behind the competition."
Supporters of SB 465 said the legislation would have created an incentive for local entrepreneurs to develop models to compete for the venture capital funds.
"In the economic development world of today, you're either on the bus or under it," said Russ Fletcher of the Montana Associated Technology Roundtables. "Montana has got to get out from under the wheels as the future rolls by."
Supporters have vowed to work together so the 2005 Legislature fully understands the rationale and need for venture capital in Montana.
"Our legislative process too often is based more on politics than good sense at the expense of our economic future," Fletcher said. "I'm afraid our continual slide further and further behind has got to stop sometime, or we might as well just give up and become one large bed and breakfast with a real estate subsidiary."
Supporters of SB 465 included:
· Montana Chamber of Commerce
· D.A. Davidson & Co.
· National Federation of Independent Businesses
· Blue Cross Blue Shield of Montana
· Montana Economic Developers Association
· Montana Associated Technology Roundtables
· Big Sky Economic Development Authority
· Anaconda Local Economic Development Corp.
· Bear Paw Development Corp. of Northern Montana
· Butte Local Development Corp.
· JOBS Now
· Missoula Area Economic Development Corp.
· Glacier Venture Fund
· Richland County Economic Development Inc.
· Kalispell Chamber of Commerce
· Bozeman Chamber of Commerce