SENATE BILL REPORT

SCR 8404

BYSenators Anderson, Lee and Saling

Creating the joint select fair competition review committee.

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):February 9, 1989; February 24, 1989

Majority Report:     That Substitute Senate Concurrent Resolution No. 8404 be substituted therefor, and the substitute concurrent resolution do pass.

     Signed by Senators Lee, Chairman; Anderson, Vice Chairman; Matson, Saling, Smitherman, West.

Senate Staff:Patrick Woods (786-7430)

                February 27, 1989

AS REPORTED BY COMMITTEE ON ECONOMIC DEVELOPMENT & LABOR, FEBRUARY 24, 1989

BACKGROUND:

The issue of public sector agencies and nonprofit corporations competing with the private sector has received legislative attention during recent years.  In testimony before legislative committees, it has been reported that public sector agencies and nonprofit corporations are "unfairly" competing with private sector businesses in providing goods and services.

During 1988 the issue of nonprofit corporations competing with the private sector was reviewed by a select committee in order to provide the Legislature with a comprehensive review of this issue, upon which public policy decisions could then be made.  The committee was comprised of members of the Senate, nonprofit community, business community and state agencies.  The Select Committee on Nonprofit Competition published a report which recommended that a joint select committee on public sector competition should be established to:  review the existing areas of public sector competition; and develop policies and procedures to mitigate the problems pertaining to competition.

SUMMARY:

There is established a joint select committee on public sector competition.  The committee is authorized to:  identify those functions of government that compete with private businesses; identify cost savings which could be realized if certain services now provided by government agencies were undertaken by private enterprise; identify the problems encountered by private enterprises when competing with government agencies; review cost accounting procedures to determine if government agency activities which could be performed by private enterprise reflect a true and complete cost to the state; identify possible increases in tax revenues to the state and local government if certain government agency activities were shifted to the private sector; and identify other issues related directly to the use of public sector competition.  The committee is comprised of representatives of the Legislature, government employees, business community and nonvoting members representing government agencies. 

EFFECT OF PROPOSED SUBSTITUTE:

The committee's study authority is specifically limited to the areas in which government agencies are competing with the private sector businesses in the provision of goods or services.

The four ex officio nonvoting members representing government agencies are removed from the committee. 

The committee's study activities are modified to include the identification of costs and benefits if competitive services now being provided by the public sector are assumed by the private sector.

Appropriation:  none

Revenue:   none

Fiscal Note:    February 6, 1989

Appointments by Legislature Required: Two Senators appointed by the President of the Senate; two Representatives appointed by the Speaker of the House.

Senate Committee - Testified:   Ben Lindekugel, United Way of King County (pro); Sharon Foster, YMCAs of Washington (pro); Dave Dougherty, BAC (pro); Michael Doctor, Sheltered Workshops (pro); Larry Kenney, State Labor Council; Doug Bohlke, ESTA (pro)