HOUSE BILL REPORT

2SHB 1516

BYHouse Committee on Ways & Means/Appropriations (originally sponsored by Representatives Basich, Doty, Vekich, Holm, Rasmussen, Sayan, Hargrove, Jones, Bristow, Pruitt, Wineberry, Locke, Kremen, Nutley, Grimm, Beck, Amondson, McLean, Schoon, Grant, Jacobsen, Winsley, P. King, Unsoeld and Rayburn)

Authorizing local marketplace programs.

House Committe on Trade & Economic Development

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (14)

      Signed by Representatives Vekich, Chair; Amondson, Beck, Braddock, Cantwell, Doty, Fox, Grant, Hargrove, Heavey, Holm, Kremen, McLean and Williams.

House Staff:Stephen Hodes (786-7092)

Rereferred House Committee on Ways & Means/Appropriations

Majority Report:  The second substitute bill be substituted therefor and the second substitute bill do pass.  (19)

      Signed by Representatives Locke, Chair; Braddock, Bristow, Butterfield, Ebersole, Fuhrman, Grant, Grimm, Hine, McLean, Nealey, Peery, Sayan, Silver, H. Sommers, Spanel, Sprenkle, Wang and B. Williams.

House Staff:      Susan Kavanaugh (786-7136)

AS PASSED HOUSE FEBRUARY 13, 1988

BACKGROUND:

In recent years, new state and local economic development programs have been developed which build on the capacity of healthy economies to replace or substitute imports with locally produced goods.  This capacity, known as import replacement, often results in former supply firms ultimately exporting those goods they have successfully learned to produce in a local economy. Programs of this type are known as marketplace programs, one of the most successful of which is operated in Oregon. Marketplace programs establish a network of local groups that match local manufacturers with local suppliers.

Such networks consist of local offices that contact local businesses to identify which goods and services they are not purchasing locally. Marketplace programs act as brokers to identify local suppliers of these goods and services and to connect them with possible buyers.  Purchasing firms only utilize those goods or services they are interested in.  The local offices of marketplace programs are operated by local non-profit groups, such as associate development organizations.

Marketplace programs have found that the matching of local suppliers with local purchasers can result in savings in direct costs, in freight and storage charges and in delivery delays.  As local suppliers gain new contracts, funds are retained in local economies rather than being used to purchase inputs imported from other areas.  This has resulted in an increase in secondary employment.  Such programs are designed to increase the health of local supply firms in a sustainable manner, increasing their scale of production, and assisting them in the export of new goods.

SUMMARY:

The Washington Marketplace program is created in the Business Assistance Center in the Department of Trade and Economic Development.  The department is directed to contract with two local non-profit organizations located in distressed areas of the state, to implement the program at the local level. The non-profit organizations are to consist of local organizations with an economic development or community development focus, with preference given to organizations representing a broad spectrum of community support.

The local contractors are to inventory local businesses to identify goods and services currently purchased from out-of-state firms which they would be willing to consider purchasing on competitive terms within the state.  The contractors are to advertise these market opportunities and receive bids from local suppliers, which will be forwarded to prospective purchasing businesses. The contractors are permitted to charge fees for businesses that profit as a result of participation in the program, to offset a portion of the costs of the program.

The Department of Trade & Economic Development is to provide coordination, outreach, and management and technical assistance to the local contractors, and shall assist local communities interested in developing import replacement programs.  The Business Assistance Center may contract with no more than two nonprofit organizations located in non-distressed areas operating import replacement programs to provide assistance to non-profit organizations in distressed areas establishing local marketplace programs.  The program shall expire June 30, 1991.

Fiscal Note:      Available.

House Committee ‑ Testified For:    (Trade & Economic Development)  Bill Lotto, Economic Development Executives of Washington;  Pat Dunn, Washington Jobs Coalition & Seattle-King County Economic Development Council; Ryan Petty, Tacoma-Pierce County Economic Development Board.

(Ways & Means/Appropriations)  Representative Bob Basich; Barbara Kuhn, Economic Development Board, Tacoma.

House Committee - Testified Against:      (Trade & Economic Development)  None Presented.

(Ways & Means/Appropriations)  None Presented.

House Committee - Testimony For:    (Trade & Economic Development)  Oregon program works well. Increases awareness of buyers and sellers of new market opportunities.  Program brings local economic development organizations closer to local firms.  Program is voluntary.

(Ways & Means/Appropriations)  This is a proven type of program.  It has been successful in King and Pierce counties and in Oregon.  Distressed areas need this assistance.

House Committee - Testimony Against:      (Trade & Economic Development)  None Presented.

(Ways & Means/Appropriations)  None Presented.