HJR 35-REPEAL ESTATE TAX  HEATH HILYARD, staff for Representative Jeannette James, introduced HJR 35 and read the following into the record: This resolution is similar in wording and intent to HJR 34 introduced by Rep. Coghill in the first session of the twenty first Alaska Legislature. The major reason we've chosen to revisit this issue is that in 2001, President Bush signed into law a tax relief act that included a temporary repeal of the Death tax and that repeal sunsets in 2010. To address some of the technical elements of the new provisions I have included with my sponsor statement a timeline, prepared by Deloitte & Touche LLP, which demonstrates the graduated decline in tax rates and the increasing exemption levels as a result of the 2001 law. Alaska currently has its own Estate tax (AS 43.31) and our rate, and thus the revenue generated, is driven by the federal law. According to Brett Fried, a tax economist with the Alaska Dept. of Revenue, regardless of whether or not the federal repeal becomes permanent, the temporary repeal will cause Alaska's revenue stream from this tax will dry up by FY06. In the same study cited in the sponsor statement, using very sophisticated econometric models, analysts believe that had the tax been repealed in 1996 the nation's economy would have yielded an average of $11 billion in additional output, created an average of 145,000 new jobs, and personal income would have increased by an average of $8 billion over the following nine years. The overall increase in the national economy would have created enough additional revenue to compensate for that which had been generated by the tax. In a statement of support from NFIB Alaska for HJR 35, the NFIB states, "In addition to the tax itself, thousands of small businesses are impacted each year by expensive fees paid to attorneys, accountants, and life insurers necessary to prepare for an eventual death tax debt." Further, an article appearing in Farm Bureau News published by the American Farm Bureau Federation states "many farmers and ranchers feel compelled to spend money for estate planning, an expense that is drain on ongoing farm operations." In addition to the NFIB, efforts to permanently repeal this tax enjoy broad support from the National Black Chamber of Commerce, the National Association of Women Business Owners and the National Congress of American Indians among others. As indicated in the sponsor statement, not only does the death tax disproportionately tax several specific demographic groups, it also does not justify its own existence from a fiscal perspective costing more to collect than the revenue it generates. Finally, I will leave with a quote from President Bush in a speech given this week to the Women's entrepreneurship summit, "We must make the repeal of the death tax permanent. I call upon Congress to do this immediately." CHAIRMAN THERRIAULT asked whether the phone call that was scheduled for the following day from Speaker Hastert was in regard to the national effort to permanently repeal the estate tax. REPRESENTATIVE JEANNETTE JAMES, resolution sponsor, replied it was for that purpose and she had already had one teleconference meeting with the U.S House on the issue. CHAIRMAN THERRIAULT stated that his office received a notice that contained a copy of a suggested resolution for the Legislature to consider. He asked whether HJR 35 contained the suggested language. MR. HILYARD replied that legislative legal had that basic document when they drafted the resolution. CHAIRMAN THERRIAULT noted there was a zero fiscal note. There were no further questions or additional testimony. CHAIRMAN THERRIAULT disclosed his wife is an attorney with a master degree in tax issues. REPRESENTATIVE JAMES announced she changed the name of the resolution to "Repeal Estate Tax" from "Repeal Death Tax." CHAIRMAN THERRIAULT said he appreciated the change. There was no prepared CS and no proposed amendments. He asked for the will of the committee. Senator Davis made a motion to move HJR 35 am and zero fiscal note from committee with individual recommendations. There being no objection, HJR 35 am moved from committee.