Economic Affairs Interim Committee Acts on Meat Processing, Liquor Auction Concerns

Committee: Economic Affairs Interim Committee
Author: Pat Murdo
Posted on February 15, 2018

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The Legislature’s Economic Affairs Interim Committee at its Feb. 7 meeting responded to diverse discussions--one on meat processing inspections and the other on liquor auctions--by voting to send letters voicing concerns about each activity. The committee also met as a subcommittee on Feb. 8 to discuss the future of Montana State Fund, the state’s largest supplier of workers’ compensation coverage.

On the meat inspection issue, the committee asked that the U.S. Department of Agriculture’s inspector general act on a request by Montana’s congressional delegation for an external investigation. The committee referenced a newspaper report on some federal meat inspectors’ activities that appeared to target certain meat processors. The committee’s letter asked for an apology, at a minimum, if wrongdoing is found.

The letter to the Department of Revenue expressed concern that the new liquor license auction process began before the public could comment on proposed rules. The committee asked that the department not issue auctioned licenses until after adopting rules. The committee also voted to revisit Senate Bill 5 from the November 2017 special session to address auctioned license transfers and gambling restrictions via a committee bill in 2019.

The committee also heard:

• From tribal resource officers and those involved with employment on tribal reservations about efforts to increase hiring in areas where jobs are not plentiful, transportation is difficult, and training is sometimes not specific to local jobs. The committee asked for data from the tribes regarding unemployment on the reservations, job potential, and deficiencies that complicate access to jobs.
• From the Commissioner of Banking and Financial Institutions that bank consolidations continue in Montana. A projected 43 state-chartered banks will exist in Montana by the end of February, compared with 45 in December 2017. Commissioner Melanie Hall also noted that Montana is the only state that allows credit unions to use private share, rather than federal share, insurance.
• About two proposals for large-format meat processing plants. One would be near Great Falls; the other is a Montana Stockgrowers Association (MSGA) plan in conjunction with JD.com, with proposed Bank of China financing. Mike Honeycutt of the Department of Livestock described the Great Falls proposal’s proponents as seeing job-related benefits if ranchers can process cattle, swine, and poultry locally instead of out of state. Opponents, he said, were concerned about waste disposal and water availability. The MSGA plan remains in the early stages.  

Unrelated to the letter to the inspector general was a presentation about the federal government’s responsibility to determine that state meat inspections are equal to or stricter than federal inspections. Ron Eckel said his federal investigations and audit office found deficiencies during an on-site review of Montana’s state meat inspectors last year; the office plans to review revised processes, which included staff training, in late May or June. Although not the focus of the review, the state’s jerky processors experienced collateral damage by having to temporarily suspend operations because the deficiencies were found during jerky plant inspections. The incident led to Board of Livestock members and meat processors meeting to improve appeals processes and communication.

For the Senate Joint Resolution 27 study, the committee heard about potential impacts from privatization or dissolution of Montana State Fund on state government, state pension funds, state employees, and Montana State Fund itself. The committee also heard about litigation involving Montana State Fund and court decisions in states that had turned state funds into insurers owned by policyholders or sold their state fund to an insurer.

The committee also heard from Department of Labor and Industry staff on:

• the importance of understanding areas of similarity and difference related to a workers’ compensation comparative study issued every two years by Oregon state officials; and
• Montana’s high fatality rate (7.9 fatalities for every 100,000 full-time workers compared to the 3.6 national average). Transportation-related incidents accounted for 50% of Montana’s work-related fatalities between 2004 and 2016.

The committee will meet next on April 26, with a subcommittee meeting on Montana State Fund on April 27.

For information about the Economic Affairs Interim Committee, visit the committee website or contact Pat Murdo, committee staff.

Committee Website:  leg.mt.gov/eaic
Committee Staff: pmurdo@mt.gov or 406-444-3594