SENATE 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

Rereferred House Committee on Ways & Means/Appropriations

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):February 22, 1988

Senate Staff:Jack Brummel (786-7428)

AS OF FEBRUARY 19, 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.  Import substitution often results in 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 nonprofit groups, such as associate development organizations.

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 nonprofit organizations located in distressed areas of the state.

The local contractors are to inventory local businesses to identify goods and services provided by out-of-state firms which could be supplied by local firms. The contractors act as information brokers, providing information to local suppliers and local buyers on market opportunities and facilitating new in-state sales.  The contractors are permitted to charge fees for businesses that profit as a result of participation in the program to offset program costs.

The Department of Trade and 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 nonprofit organizations located in non-distressed areas operating import replacement programs may be contracted with to provide assistance to nonprofit organizations in distressed areas establishing local marketplace programs.  The program shall expire June 30, 1991.

Appropriation:    none

Revenue:    none

Fiscal Note:      available