03/08/1995 01:35 PM House FIN

  HOUSE BILL 116                                                               
                                                                               
       "An  Act   exempting  the   Alaska  Seafood   Marketing                 
       Institute from the State Procurement Code."                             
                                                                               
  REPRESENTATIVE  ALAN AUSTERMAN  stated  that  HB  116  would                 
  exempt  the Alaska Seafood  Marketing Institute  (ASMI) from                 
  the State  procurement code  under AS  36.30.850(b) for  all                 
  domestic  marketing  and  board-related  activities.     The                 
  proposed procurement exemption would  allow ASMI to purchase                 
  marketing   services   and  supplies   that   meet  industry                 
  imperatives.                                                                 
                                                                               
  Representative Brown asked  why ASMI should be  removed from                 
  the procurement code.                                                        
                                                                               
  DAVID WILDER,  CHAIRMAN, BOARD  OF DIRECTOR,  ALASKA SEAFOOD                 
  MARKETING INSTITUTE, spoke in support of  HB 116.  He stated                 
  that the request  would allow  for increased efficiency  and                 
  would reduce the  cost of promoting  the consumption of  the                 
  products in the United States.                                               
                                                                               
  Currently,  the  seafood  industry   is  experiencing  heavy                 
  competition from  farmed salmon, foreign  seafood production                 
  and  other   protein   sources.      The   competition   has                 
  significantly  eroded  Alaska's  market  share  and  reduced                 
  prices for Alaskan products which  has directly affected the                 
  incomes of all those dependent upon a healthy industry.                      
                                                                               
  Mr. Wilder  added that the state procurement process was not                 
  designed  to facilitate  market  promotion  services in  the                 
  private  sector,  conducting business  in  a cost  effective                 
  manner  or readily  allow  the board  to participate  in the                 
  decision  making  process.   As  an example,  ASMI currently                 
  cannot  advertise  and  procure  services  valued  over  $25                 
  thousand dollars outside of Alaska.                                          
                                                                               
  Under the state  procurement system, it would  be impossible                 
  for ASMI to contract directly  with such individuals without                 
  an elaborate,  time consuming  and costly  bid process  that                 
  would   not   adequately  consider   unique   knowledge  and                 
  abilities.  Mr.  Wilder added, in addition,  the procurement                 
  requirements  place  extensive  delays and  prohibitions  on                 
  ASMI's  ability to act quickly  and take advantage of unique                 
  promotional opportunities  that often arise  informally, and                 
  or  in  association with  other  marketing activities.   The                 
  delays, restrictions and selection criteria  required by the                 
  state procedures  cripple the  ASMI efforts in  implementing                 
  promotional  activities and then  results in increased costs                 
  to the industry.                                                             
                                                                               
                                4                                              
                                                                               
                                                                               
  DUANE  PEOPLES,  ADMINISTRATIVE   OFFICER,  ALASKA   SEAFOOD                 
  MARKETING    INDUSTRY,    responded   to    questions   from                 
  Representative Martin, stating that federal requirements are                 
  as  strict  as  the  State  requirements.    Currently,  the                 
  expenditures of State and federal monies overseas are exempt                 
  under AS 36.30.180.   The  foreign markets  are all  exempt.                 
  The  federal  government  requires  ASMI  to  follow  decent                 
  procurement procedures.                                                      
                                                                               
  Representative Austerman  emphasized that the  original bill                 
  indicated  that procurement  procedures  with "good  ethics"                 
  should  be  followed.     The   House  Labor  and   Commerce                 
  legislative   version   specified  that   guidelines  should                 
  illustrate the procurement process.                                          
                                                                               
  Mr. Peoples stated that adopting the legislation would allow                 
  ASMI  to eliminate the  need for bureaucratic  paper work as                 
  required by  the Department  of Administration.   Then  ASMI                 
  could keep that authority within  that industry, and then at                 
  that  time  be  responsible  to  the  Executive  Committee's                 
  monthly meetings.                                                            
                                                                               
  ART   SCHEUNEMANN,   EXECUTIVE   DIRECTOR,  ALASKA   SEAFOOD                 
  MARKETING INDUSTRY, spoke to the level  of commitment of the                 
  fishermen.  He noted that the harvest and production side of                 
  the  industry  has  brought  a  tremendous  amount  to  that                 
  industry.  He  applauded the  driving force to  make ASMI  a                 
  public/private corporation.                                                  
                                                                               
  JERRY MCCURE, PRESIDENT, UNITED FISHERMEN ASSOCIATION (UFA),                 
  indicated that UFA  supported the proposed legislation.   He                 
  added, that ASMI  replaced the  last budget cut  with a  one                 
  percent tax  imposed on  the fishermen.   He  felt that  the                 
  fishermen would receive more benefit from the tax  paid with                 
  passage of the legislation.                                                  
                                                                               
  Representative Navarre MOVED  to report CS HB  116 (L&C) out                 
  of Committee  with individual recommendations  and with  the                 
  accompanying fiscal notes.                                                   
                                                                               
  CS  HB  116 (L&C)  was reported  out  of Committee  with "no                 
  recommendations"  and   with  zero   fiscal  notes  by   the                 
  Department  of  Commerce  and  Economic  Development   dated                 
  2/15/95 and the Department of Administration dated 2/15/95.