SB 212 - STATE PROCUREMENTS AND PUBLICATIONS CHRIS GATES, DIRECTOR OF DIVISION OF ECONOMIC DEVELOPMENT, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, discussed the CS for Senate Bill 212(FIN)am relating to procurement notices. He stated this would make Alaskan product preference a more usable process to encourage maximized use of Alaskan products in state contracts and state procurement. He said that previous bills have made the penalties too severe for a contractor who used the process and then did not use the Alaskan product specified. He said the process has been much too complicated and almost impossible to comply with; thus it had not been utilized. He believed CSSB 212(FIN)am would solve this problem and increase use of Alaskan products. He cited numerous innovations in the bill which would accomplish this and encourage local hire through incentives and bonuses. He said the Department of Economic Development had been working hard with Senator Kelly's staff on this bill. TAPE 94-05, SIDE B Number 026 CHAIR MACLEAN said the House Economic Task Force had followed this bill, supported it fully, and considered it one of the priority bills. She had spoken to Speaker Barnes, who will give it as few referrals as possible. Number 050 REPRESENTATIVE WILLIAMS asked about the incentive bonus program, and how long it stayed in effect if a contractor did not use an Alaskan company. MR. GATES said the bonus lasted throughout the contract, and if a contractor switched to an Alaskan supplier in the middle of a contract, the bonus would apply. Number 075 LOREN RASMUSSEN, CHIEF, DESIGN CONSTRUCTION STANDARDS, DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, testified that this bill would not do away with the competitive sealed bidding process, but would allow bonuses for local products and local hire to apply to all contracts, at the end rather than at the beginning of the contract. Regulations could specify what a maximum bonus would be, for example five percent. Number 195 MR. HARDING asked for specific examples as to what percentages would be given for what preferences. MR. RASMUSSEN answered at the beginning there could be a maximum of five percent. Of that five percent, maybe two percent would go for local hire, two percent for local products, and one percent for subcontractors. Number 256 CHAIR MACLEAN asked if the pilot program was successful, would it stop after two years? MR. RASMUSSEN replied that it would stop after two years, and legislative authority would have to be given again. CHAIR MACLEAN stated there are too many different time frames in the bill. MR. GATES said all of the effective dates could be taken care of after the first two years success. Number 310 MR. HARDING asked about fiscal notes. MR. RASMUSSEN said the Department of Transportation's fiscal note is about $5,000 to do the regulations. Department of Administration's fiscal note is more complex and will contain added costs, mainly for printing. Number 360 REPRESENTATIVE JAMES asked how much time would be needed on the pilot program to determine if it is working. She added that historically, the state has not given projects enough time to determine if they work before abandoning them. MR. RASMUSSEN agreed that two years was too short, but that was the way the bill was drafted. REPRESENTATIVE CARL MOSES said the Alaska Seafood Marketing Institute had a potential amendment to the bill. DUANE PEEPLES, ADMINISTRATIVE OFFICER, ALASKA SEAFOOD MARKETING INSTITUTE, expressed the Alaska Seafood Marketing Institute's wish to amend the procurement statutes to make the Institute exempt from these restrictions, in order to maximize their marketing activities. Number 407 CHAIR MACLEAN suggested this amendment be submitted on the Senate side and a meeting be scheduled with SENATOR KELLY, sponsor of the bill, to speed up the process. MR. PEEPLES replied this would be done next week. Number 429