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.