H-2714.1  _______________________________________________

                 SECOND SUBSTITUTE HOUSE BILL 1721

          _______________________________________________

State of Washington      55th Legislature     1997 Regular Session

By House Committee on Appropriations (originally sponsored by Representatives McMorris, Koster, Honeyford, Van Luven and Mulliken)

Read first time 03/10/97.

Providing economic opportunities for private enterprise. 

    AN ACT Relating to commercial activity by government agencies; adding a new section to chapter 43.01 RCW; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1.  The legislature finds that private enterprise is essential to the health, welfare, and prosperity of  Washington state citizens.  When government engages in commercial activities and provides goods and services to private citizens,  private businesses are unable to compete with the prices offered by government because the true costs of the goods and services are not reflected in the price.

NEW SECTION. Sec. 2.  A new section is added to chapter 43.01 RCW to read as follows:

    (1) By December 1, 1997, the office of financial management shall develop a methodology for reflecting the fully allocated costs of goods and services provided by a state agency or institution of higher education that are customarily available from the private sector.  The methodology shall include, but is not limited to:  Employee salaries and benefits; capital outlays, including supplies and equipment; administrative and overhead expenditures; contract administration and evaluation; and taxes that would be received by state and local governments from private providers of goods, services, and facilities.

    (2) By January 1, 1998, each state agency or institution of higher education must determine the fully allocated costs of commercial activities that it conducts in which it sells or rents goods, services, or facilities to the general public.  An agency must use the methodology developed by the office of financial management under subsection (1) of this section, or may develop its own methodology.  Copies of the breakdown of fully allocated costs for commercial activities, as well as the methodology used, shall be available for public inspection and copying.

    (3) The office of financial management shall prepare a report by July 1, 1998, on the implementation of this section by state agencies, institutions of higher education, and related boards.  The report shall be submitted to the members of the government administration committee and the appropriations committee of the house of representatives, and to the members of the government operations committee and the ways and means committee of the senate.

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