HOUSE BILL REPORT

HB 1476

BYRepresentatives Basich, Doty, Spanel, Cantwell, Vekich, Kremen, Hargrove, Schoon, Sayan, Baugher, Inslee, Jesernig, Rasmussen, Rayburn, Walk, Jones, Rector, Raiter, Locke, Moyer, Youngsman, Walker, Winsley, Bowman, Brough, D. Sommers, Silver, Tate, Ferguson, Wineberry, P. King, Pruitt, Ebersole, Sprenkle, Morris and Todd

Establishing the Washington marketplace program.

House Committe on Trade & Economic Development

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (12)

      Signed by Representatives Cantwell, Chair; Wineberry, Vice Chair; Doty, Ranking Republican Member, G. Fisher, Moyer, Rasmussen, Raiter, Rector, Schoon, Tate, Walk and Youngsman.

House Staff:Bill Lynch (786-7092)

Rereferred House Committee on Appropriations

Majority Report:  The second substitute bill be substituted therefor and the second substitute bill do pass.  (27)

      Signed by Representatives Grant, Vice Chair; H. Sommers, Vice Chair; Silver, Ranking Republican Member; Youngsman, Assistant Ranking Republican Member; Appelwick, Belcher, Bowman, Braddock, Brekke, Dorn, Doty, Ebersole, Ferguson, Hine, Holland, May, McLean, Nealey, Padden, Peery, Rust, Sayan, Spanel, Sprenkle, Valle, Wang and Wineberry.

Minority Report:  Do not pass.  (1)

      Signed by Representative Locke, Chair.

House Staff:      Susan Nakagawa (786-7136)

AS REPORTED BY COMMITTEE ON APPROPRIATIONS MARCH 2, 1989

BACKGROUND:

Many businesses lack market information regarding local sources of supplies. Local suppliers are unable to bid on orders which are filled by out-of-state sources because they are unaware of these opportunities to supply local buyers.  Local suppliers often have lower transportation and storage costs and have better service and delivery times.

The Washington Marketplace program was authorized by the legislature in 1988 through an appropriation to the Department of Trade and Economic Development.  The Washington Marketplace program is administered within the Business Assistance Center which contracts with local nonprofit organizations for the operation of the program.  The program is currently focused on distressed areas of the state, but the program is authorized to provide funds to local organizations in non-distressed areas so that they may provide technical assistance to programs in distressed areas.

Marketplace programs identify businesses within their communities which either purchase or plan to purchase supplies from sources outside the state.  Buyers who are interested in participating in the program provide the program with their product specifications. The program, keeping the identity of the buyer confidential, then identifies in-state businesses who either produce the products specified or are capable of producing the products. These suppliers are then notified of the opportunity to bid for the contract. The buyer is presented with the bids and may choose any or none of the bidders.

The Washington Marketplace program will expire at the end of the 1987-88 biennium unless it is reauthorized.

SUMMARY:

SUBSTITUTE BILL:  The Washington Marketplace program is established within the Business Assistance Center.  The program is directed to place special emphasis on strengthening the economies of rural distressed areas.  The Marketplace program will consult with the community revitalization team established in the Department of Community Development.

The Department of Trade and Economic Development is required to contract with four local nonprofit organizations located in distressed areas of the state for implementation of the Washington Marketplace program. The Department may also enter into joint contracts with multiple nonprofit organizations in different locations to promote cooperation between urban and rural areas, but at least one of these nonprofit organizations must be located in a distressed area and no more than one nonprofit organization may be located in an urban area.

Contracts must be awarded on a competitive bid process with preference given to organizations with a broad spectrum of community support. Each location must contribute at least twenty percent local funding. Contracts may include provisions for charging businesses that profit from the program a service fee.

Contracts must be for the performance of the following services:  contacting Washington businesses to identify goods and services purchased from out-of-state sources; identifying locally sold goods and services currently provided by out-of-state sources; determining goods and services which a business is willing to make contract agreements for; advertising market opportunities to in-state suppliers; and receiving bid responses from potential suppliers and sending them to a business for final selection.

The Business Assistance Center is also directed to prepare promotional materials or conduct seminars, provide technical assistance, and develop standardized procedures for operating the local component of the Washington Marketplace program.

The Department is directed to report annually to the Senate Economic Development and Labor Committee and the House Trade and Economic Development Committee on the activities of the program.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  Language concerning the Business Assistance Center's authority to enter into joint contracts with local organizations is clarified.  The Business Assistance Center may enter into joint contracts with local organizations to enhance urban and rural linkages and promote activity between distressed and nondistressed areas.  Any such joint contract must include at least one organization located in a distressed area, and no more than one organization may be located in an urban area. The provision regarding the Business Assistance Center's authority to enter into contracts for technical assistance to be provided by nondistressed programs to distressed programs is deleted.  Other technical changes are made.

CHANGES PROPOSED BY COMMITTEE ON APPROPRIATIONS:  The second substitute bill requires that the Department of Trade and Economic Development contract within at least four economically distressed areas, as opposed to four in total.  The appropriation is deleted.

Fiscal Note:      Available.

House Committee ‑ Testified For:    (Trade & Economic Development) Representatives Basich and Spanel, Sponsors; David Dougherty, Director, Business Assistance Center, Department of Trade and Economic Development; Monica Heilbron, Manager, Washington Marketplace Program, Business Assistance Center, Department of Trade and Economic Development; A. K. Wintzer, Yakima, South Central Washington Marketplace; Leroy Tipton, Grays Harbor, Chamber of Commerce; Sarah McCoy, Puget Sound SANE; Tom Newton, Lewis County Economic Development Council;  and Bob Brodie, Coastal Industries, Tacoma, Washington.

(Appropriations) Representative Basich; Robin Sherman, Economic Development Association, Skagit County; and Bert Langenhorst, Marketing Director, Chinook Enterprises.

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

(Appropriations) None Presented.

House Committee - Testimony For:    (Trade & Economic Development) The four pilot programs have worked well.  The program keeps money in Washington State and helps Washington businesses expand. This program can help distressed area businesses supply businesses in stronger regions of the state.

(Appropriations) The Marketplace pilot program has proven successful and has created jobs in distressed regions.  The program has demonstrated substantial economic benefit for a small appropriation.

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

(Appropriations) None Presented.