Legislature(1995 - 1996)
03/14/1995 09:10 AM House ECD
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT
March 14, 1995
9:10 a.m.
MEMBERS PRESENT
Representative Jerry Sanders, Chairman
Representative Vic Kohring
Representative Pete Kelly
Representative Ed Willis
MEMBERS ABSENT
Representative Carl E. Moses
Representative Eileen MacLean
Representative Norman Rokeberg
COMMITTEE CALENDAR
Overview on Pacific NorthWest Economic Region
WITNESS REGISTER
SENATOR ALAN BLUECHEL, President
Pacific NorthWest Economic Region
999 Third Avenue, Suite 1080
Seattle, Washington 98104
Telephone: (206)464-7298 Fax: (206)464-6859
POSITION STATEMENT: Overview on Pacific NorthWest Economic
Region
ROGER BULL, Executive Director
Pacific NorthWest Economic Region
999 Third Avenue, Suite 1080
Seattle, Washington 98104
Telephone: (206)464-7298 Fax: (206)464-6859
POSITION STATEMENT: Overview on working groups relating to
Pacific NorthWest Economic Region
PAM NEAL, President
State Chamber of Commerce
217 2nd
Juneau, Alaska 99801
Telephone: 586-2323
POSITION STATEMENT: Supported Pacific NorthWest Economic Region
ACTION NARRATIVE
TAPE 95-4, SIDE A
Number 000
CHAIRMAN JERRY SANDERS called the House Special Committee on
Economic Development to order at 9:10 a.m. Representatives
Sanders, Kohring, and Kelly were present. Chairman Sanders
stated, for the record, that Representative Willis is attending
another committee meeting and will join us as soon possible.
Representatives Moses and MacLean were absent.
CHAIRMAN SANDERS stated that the Pacific NorthWest Economic
Region was established l989. Chairman Sanders noted that there
are two representatives from Pacific NorthWest Economic Region
who have very distinguished backgrounds. Senator Alan Bluechel
who after 28 years with the Washington State Legislature retired
recently. The second is Roger Bull who has a very distinguished
career in the Canadian Foreign Service. Chairman Sanders stated
that he found these men very impressive during the four hours he
met with them. He stated that this will be a very informal
meeting. He said after the presentation if there are any
questions, the audience will ask first then the committee.
Number 048
SENATOR ALAN BLUECHEL, President, Pacific NorthWest Economic
Region, gave an overview of Pacific NorthWest Economic Region's
background. He stated that since l989, the world has probably
changed more in this five or six years than it has in the last
thousand years, and this change is accelerating throughout the
whole world. In that type of change there are both threats and
opportunities. He said Pacific NorthWest Economic Region regards
this as an opportunity because when you look at the global
economy, certain regions of the world have an opportunity to
become the major players in their regions. Mr. Bluechel asked
how do we, as individual states and provinces, deal with this
sort of thing. He stated that it so happens that the Pacific
Northwest, which includes Alaska down to Oregon and east to
Montana and Alberta, is really in a global sense one of the
favored areas of the whole world, we sit in the middle between
the European community and the Pacific Rim. Mr. Bluechel noted
that in the Pacific rim 70 percent of the money of the world is
now circulating and being generated in the economy.
MR. BLUECHEL asked how do we as individual states and provinces
deal with something like this because each one of us individually
are quite small and we do not cast a large shadow on a global
picture. He stated that when you take this region of Washington,
Oregon, Idaho, Montana, British Columbia, Alberta and Alaska and
you add the population together, you get about sixteen plus
million people. He noted in their research they found that in
order to obtain a critical mass to be able to play in the global
economy, you need at least 12 million people and preferable you
need 15 million people, but more importantly is when you take the
gross domestic product of the region it, ends up as the tenth
largest economic entity in the world. That means there are only
eight countries that have a greater gross domestic product. He
explained they have a gross combined product of 254 billion
annually.
MR. BLUECHEL noted he was pro tem of the Washington Senate in
l989. At that time he passed a resolution through both houses,
inviting the leadership of the legislatures throughout this five
state two province region to come to Seattle to see if they had
anything in common. He said five of the seven speakers and four
of the five majority leaders were at the meeting. He stated the
most interesting part of the meeting was they had every variety
of philosophy there. There were socialist from British Columbia,
extreme conservatives from Idaho and Alberta, and everything in
between.
MR. BLUECHEL said when they started discussing the global
picture, the first thing they found was all their differences in
philosophy simply fell off the table because it did not matter
when you are dealing on a world scale. He said from that start
they proceeded to put together Pacific NorthWest Economic Region.
Mr. Bluechel stated it took a couple of years to develop the
articles of ratification. He explained in l991, they submitted
the articles to all the l991 legislatures and they all passed
during that winter session. Six of the articles passed through
the regular routine of the House and Senate.
MR. BLUECHEL stated that Alaska adopted a resolution, by the
Legislative Council, joining Pacific NorthWest Economic Region.
At that
time a dues structure was set up. Mr. Bluechel explained the
dues structure as follows: The four larger states and provinces,
Oregon, Washington, British Columbia and Alberta pay $25,000 a
year to Pacific NorthWest Economic Region. The three smaller
ones, Alaska, Idaho and Montana pay $15,000 a year. This was
matched by the private sector through associates in the private
sector.
Number 180
MR. BLUECHEL explained that Pacific NorthWest Economic Region is
designed to do something neither Canada nor the United States
really does, that is to create a really working public-private
partnership. It is designed for a working public-private
partnership where the private sector sets the course for the
issues in the subjects to be taken up. It is not meant to be a
bureaucratic type of operation, it is meant to work, it is meant
to have very few rules and regulations. He noted there are only
two rules right now, one is when they take up a working group,
they must have at least three states and provinces agree to the
working group. They must not conflict with anyone else. The
second rule is they do not get involved in each others politics
because this is a totally bipartisan effort.
MR. BLUECHEL said all 703 legislators currently in the region
belong to Pacific NorthWest Economic Region. Each legislative
body in the American states selects one of their members, usually
it is a leadership member of each caucus, to sit on the Delegate
Council. The Delegate Council then selects one of their members
to be on the Executive Committee. So there are seven members on
the Executive Committee from the legislative body, one from each
state and province. Then the Executive Committee chooses a
president and a vice president, which must be from different
countries.
Number 210
MR. BLUECHEL explained the way they work is through working
groups. He explained that there are series of working groups.
The working groups have one co-chairman from the private sector
and one from the public sector. Mr. Bluechel said the
legislatures are very volatile so they expect the private sector
to be the repository of historical perspective.
MR. BLUECHEL said in l993, they added the Governors and Premiers
to the Delegate Council, and there is a second piece of statutory
legislation which modifies the original enabling act to add the
Governor to the Delegate Council. He stated so far five of the
seven states and provinces have passed the second piece of
legislation. All have passed the first. Mr. Bluechel noted even
through the Governors are not officially statute in each state
they are recognized as part of the delegate council.
Number 249
MR. BLUECHEL stated in Kananaskis, Alberta, they established
instead of an associate membership for the private sector, a full
Private Sector Council. He explained the private council is a
paid membership from the private sector. They elect four members
from each state and province to the Board of Directors of the
Private Sector Council, and the Private Sector Council elects a
chairman and a vice chairman to the Executive Committee. Mr.
Bluechel stated they are ex-officio, they are both a 501C3 and
501C6 organization, so all the funds paid to Pacific NorthWest
Economic Region from Canada and the United States are tax exempt.
MR. BLUECHEL stated at the last meeting, Alberta established a
new working group of government procurement. Under GATT all
government procurement above the range of $250,000 is non
restricted but cannot be restricted in any of the 117 GATT
countries.
MR. BLUECHEL mentioned another type of a working group is the
timber working group, which Alaska plays a major role. He said
this region composed of Washington, Oregon, Alaska, British
Columbia and Alberta is the largest soft wood producing entity in
the world. The second largest is Scandinavia, and it does not
sell two by fours and raw logs. He stated that Alaska and the
rest sell two by fours of raw logs, in effect, they are selling
raw and natural resources. Mr. Bluechel stated they are not out
to change that, what they are doing is adding a dimension of
value added wood products. He said the intent and purpose of the
timber working group is to take a lot of the displaced timber
workers and find a manufactory or value adding type of production
to timber.
Number 323
ROGER BULL, Executive Director, Pacific NorthWest Economic
Region, gave an overview of some of the working groups. He
talked about the timber working group and stated that focusing on
wood manufacturing does make sense because a lot of small
communities grew because of exploiting the forest. Rather than
see them die like many mining communities when the mine is
depleted, it is our hope that through a value added industry
these towns can stay alive and keep their jobs.
Number 348
MR. BULL mentioned other working groups, one of real interest in
Alaska is the tourism working group. Mr. Bull gave an example of
what the legislators said to the tourism directors of the seven
states and provinces, "why don't you consider working together in
a working group." The director said this is very difficult
because some of us have $20 million a year to spend on tourism
promotion and some of us have $2 million. The director said they
tried it, they had something that was called the two nation
vacation and it did not work. Mr. Bull further explained that
the legislators wanted them to try, and under the circumstances
the functionaries, found they could try. He said they got
together and discovered a lot of things they could do in common.
Each of the states and provinces paid $10,000 to finance the
study. In the end, there was such a range of possibilities, both
among visitors and resources, that a single marketing campaign
did not make sense. He stated that every one of the states and
provinces has improved their marketing as a result of this study.
Number 383
MR. BULL talked about the environment as another working group.
He stated they focus on one issue which the fact is there are
2,600 companies in the Northwest engaged in providing
environmental goods and services. Mr. Bull noted that we are the
second largest concentration of a highly technologically advanced
industry in the world. The largest is Europe with 4,000
companies. He stated what Pacific NorthWest Economic Region did
was to encouraged the different states and provinces to improve
or to create for the first time, associations, and environmental
industries associations. He said one of those associations is
here in Alaska, organized by Rex Lumbkin, and a group in
Anchorage. Mr. Bull said there are associations in every state
and provinces except Idaho where there is a larger association to
which the environmental companies belong. There is an
environmental council for the region which is actively engaged in
working with us to develop export.
Number 408
MR. BULL also gave an overview on a recycling working group.
Recycling is a group which was originated in Alaska, he noted
that Fran Ulmer, who was a member of the Delegate Council, urged
them to get into recycling as an issue. He further discussed
ways in which recycling can be changed from just being the right
thing to do into something economical as well. Part of the
problem is the size at which a recycling center becomes
economical. The recycling work group received an Environmental
Protection Agency (EPA) grant in order to bring recycles from
various parts of the region to discuss how each had solved their
own recycling problems.
Number 454
MR. BULL then discussed the export working group. He stated late
in l993, at a meeting in Idaho, Senator Bluechel came up with a
proposal. He said we have been working on all these different
sectors, when you get down to it, the objective is to create
jobs. The way to create jobs is by selling things to each other.
Ultimately, it is by exporting from region, value added, turn our
resources into products and sell the products to the world.
Number 515
MR. BULL explained the product is catalyst, it originated in the
state of Washington as the Washington market place. He said it
was designed to do something very simple. There are dozens of
sources of business opportunities, magazines, newspapers,
federal, state and private publications, E-mail, bulletin boards
on the internet. The Catalyst Program takes the opportunities
identified from all these sources and classifies them using an
eight digit extended SIC code. The next step is to classify all
of the businesses within the private sector with these same
codes. One company may have as few as 1 code, or as many as 50.
He stated when an opportunity is coded in the computer it is then
sent out by fax machine to all companies that contain a matching
code. This will be done in the evening by fax because although
some companies have access to modems and E-mail the majority of
companies today have fax capability. When a company receives its
faxed list of opportunities it can respond to a particular
opportunity and more detailed information will be faxed the
following night. Mr. Bull stated that a reasonable cost for
Alaska to participate in this program would be $20,000, some of
which could be recuperated through fees on industry
participation. Alaska's Chamber of Commerce already has a fax
network of companies who are used to receiving information over
the fax. These faxes would appear to be coming from Alaska and
all inquiries would be made to local agencies. This would make
follow up assistance more personal and keep freight forwarding
and aspects of business within the state. Mr. Bull stated in the
future, this system would allow smaller businesses to join
together and bid jobs they would not normally be able to handle
individually. This system can also be leased to organizations
who want to contact all the representatives within a specified
industry by using this database of coded companies. Mr. Bull
concluded that at the end of the three years of federal funding,
he would hope the Catalyst Program would be self sufficient.
Number 719
CHAIRMAN SANDERS asked if the audience had any questions.
Number 732
REPRESENTATIVE PETE KELLY asked Senator Bluechel what the voting
structure is if you have several regions of different populations
and economic regions.
SENATOR BLUECHEL replied that it is just one vote per state and
province, however, every vote taken must be unanimous. He
explained that they are geared to provide a structure for
businesses to win. In other words, they open the door as the
legislatures have, for businesses to make the sale. He stated
this is strictly business oriented, it is not concerned with
welfare, environment, etc.
Number 788
REPRESENTATIVE KELLY said Mr. Bluechel mentioned he was
completely out of politics and the timber supply is shrinking and
creating some problems. Representative Kelly asked how do you
separate politics when the timber supplies are shrinking.
Number 795
SENATOR BLUECHEL responded that he was in the timber business and
is fully aware of it. He noted he said the wrong thing and
explained what they are trying to do is bring politics into the
real world of business. He said instead of being an
interference, structure it even in a very focused area to help
rather than hinder. Further, discussing timber, he said one of
the biggest problems with timber is the dispute between Canada
and the United States on what are standards, rules and
regulations. He noted they did not want to touch this at all,
but Glen Clark, who is the number one minister in British
Columbia and Vice President of Pacific NorthWest Economic Region,
said he thinks we should get together as a region and set common
standards, operating procedures and goals. He stated we can do
this as a region, and everybody else in the world is going to
look at us and are not going to try to override us with other
standards.
Number 868
MR. BULL stated they have been asked to participate and were
invited by Governor Symington to come to his state of Arizona to
advise them on organizing a regional group.
Number 915
REPRESENTATIVE VIC KOHRING asked to what extent is Alaska's
involvement so far.
Number 918
MR. BLUECHEL said Alaska has been a charter member along with six
others. He noted Alaska has not paid the last dues of $15,000,
but has been participating as a full member. Mr. Bluechel stated
the main purpose they are here is not only to tell us what
Pacific NorthWest Economic Region is doing, but to encourage
Alaska to continue participation. He also encouraged Alaska to
join the Catalyst Program, because for $20,000, you get $540,000
worth of results. He mentioned it actually would be more than
that because the states of Washington and Oregon, over the past
few years, have invested probably $750,000 to $1 million in
infrastructure. Mr. Bluechel said their goal and the federal
objective is to expand this to 150,000 companies. The $20,000 is
to start classifying the Alaska businesses by their SIC codes and
any Alaskan leads would also by classified. If 500 Alaskan
companies participate and we make 50 matches a year and those
matches each produce $100,000 of business, then for $20,000 you
have produced $5 million. He said realistically someone else has
done all the leg work and put the whole thing together and we
have the operating system and all the federal government is
saying, we would like you to expand it but we want you to pay
your share of it.
Number 955
REPRESENTATIVE KOHRING stated Mr. Bluechel mentioned matching
dollars and asked if he was talking about federal matching
dollars.
Number 957
MR. BLUECHEL explained the federal grant was for $420,000 and if
Alaska pays $20,000 a year to the catalyst system, Alaska will be
a full participant in the full federal grant.
Number 964
MR. BULL stated that right from the start, participation should
be based on population in the state and the number of companies.
REPRESENTATIVE KOHRING asked if they were asking for two
different fees, $20,000 for the Catalyst Program and $15,000 for
the membership.
Number 968
MR. BLUECHEL replied that $15,000 is for the membership and the
$20,000 is the start up cost for entering catalyst. He explained
the catalyst is one part of the export working group and the
export working group is quite complex. This is one single part
of the export working group and it stands aside from the Pacific
NorthWest Economic Region membership because it is operated.
Once it is in operation, it is a straight fax to the businesses,
once the infrastructure of cataloging and classifying is done
that is what the cost is for. He explained that Oregon will be
charging their users.
Number 986
MR. BULL gave an explanation of how the catalyst database can
generate income and that is by allowing third parties to solicit
from the various groups within the database.
Number 010
SENATOR BLUECHEL said this is part of the export package but
there are other parts to the export package. There are four
areas that are key to a business. First, is finding a bid or a
tender that you can respond to, and the end is shipping the
product and getting paid. The second part is the most concern to
small businesses. He said they have the program in place but it
is somewhat embryonic. He further discussed the third part
which, for most companies, is how to get financed. The last part
which they asked Oregon to become the lead entity on is creating
flexible networks. Mr. Bluechel explained that if you get all
these four parts together, a small company in Juneau can utilize
all of these things to go with the company in Montana or
somewhere else to get a job.
REPRESENTATIVE KOHRING asked if the funding request has been
formally put in to the legislature.
MR. BLUECHEL responded that he did not know.
REPRESENTATIVE KOHRING asked if Alaska has been a dues paying
member for the last several years.
Number 063
MR. BULL replied that Alaska has been paying dues since l991, and
further explained the distinction between the Pacific NorthWest
Economic Region dues and the catalyst start up costs.
Number 078
MR. BLUECHEL explained that the dues can be put into statute, and
read an example taken from the Washington statues.
REPRESENTATIVE KOHRING asked Pam Neal of the State Chamber of
Commerce to comment on her view points, effectiveness of this
program and the benefit to Alaska by participating in this
program.
Number 088
PAM NEAL, President, State Chamber of Commerce, stated that they
are very interested and she was very impressed with the
invitation. She asked if there is any activity in the private
industry, in Alaska, at this time.
MR. BLUECHEL answered yes. In the environmental technology,
Alaska has an association which participates in Pacific NorthWest
Economic Region.
MS. NEAL stated she received many inquiries asking who in Alaska
could provide this type of service. She also stated the Alaska
State Chamber supports this initiative and the chamber would
offer its services in sending out a questionnaire.
Number 102
REPRESENTATIVE KOHRING asked if this would be the Department of
Economic Development's budget.
MS. NEAL responded that she did not know and was wondering about
that herself.
Number 106
REPRESENTATIVE SANDERS mentioned the dues were funded through the
Legislative Council and they have two options of payment of
membership; either to continue to let leg council pay annually,
or to look into introducing a bill to establish payment by
statute. Chairman Sanders asked if the catalyst could come
through the Department of Commerce. He asked if there is a
channel where private industry or the State Chamber could do that
on their own even if the state was not participating as a
government. Chairman Sanders said if they chose not to
participate, he would hope that the catalyst would be available
to the public sector.
Number 116
MR. BULL responded that they would not wish to promote catalyst
with the state when the state is closed.
Number 133
MS. NEAL stated the thing she found most attractive about this
structure is the partnership between government, the public
sector, and the private sector. She said it would be less than
effective if the state and government were not financially
committed.
Number 144
MR. BLUECHEL noted one question he did not answer fully. The way
most states do the dues is put it in their legislative budget,
and most states say the Pacific NorthWest Economic Region dues
shall be paid half by the House and half by the Senate.
Number 156
REPRESENTATIVE KOHRING commented that it is a pretty nominal
amount especially if it is a good program. He said the state is
going to realize some economic benefit from it.
MR. BULL said to get value in the membership, you have to throw
yourself into the organization, you have to be prepared to
involve legislators who are interested in the different working
groups.
CHAIRMAN SANDERS stated, for the record, that Representative Ed
Willis arrived at 10:30 a.m. and asked Representative Willis if
he had any questions.
REPRESENTATIVE ED WILLIS said his staff person is in attendance
taking notes so he will not get into what has already been gone
through.
CHAIRMAN SANDERS introduced Representative Willis to Senator Alan
Bluechel and Mr. Roger Bull. Chairman Sanders stated that if
there are no further questions, they will disburse of the formal
part of the meeting.
ADJOURNMENT
There being no further business to come before the committee,
Chairman Sanders adjourned the meeting at 10:45 a.m.
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