04/10/2008 10:00 AM Senate STATE AFFAIRS

           HJR 41-REPEAL OF SEC. 511 OF P.L. 109-222                                                                        
                                                                                                                                
10:27:51 AM                                                                                                                   
CHAIR MCGUIRE  announced the consideration of  HJR 41.[Before the                                                               
committee was CSHJR 41(RLS).]                                                                                                   
                                                                                                                                
DENEEN TUCK, Staff to Representative  Max Gruenberg, Alaska State                                                               
Legislature,  said the  Fairbanks mayor  alerted them  that there                                                               
were  strong implications  to  Section 511  of  the Tax  Increase                                                               
Prevention and  Reconciliation Act.  This provision was  added by                                                               
Congress in  2005. If it remains  in law in 2011,  the state will                                                               
start withholding an  extra 3 percent from vendors to  pay to the                                                               
federal  government for  Alaska communities  that make  more than                                                               
$100 million  on goods and  services. It  would cost the  city of                                                               
Anchorage $250,000  to start  replacing the  system, and  then it                                                               
would cost  them from  $100,000 to $200,000  per year  to operate                                                               
it. Anchorage  would have  to hire another  person. It  will take                                                               
away procurement cards. She provided  a handout estimating a cost                                                               
of $6.2 billion.                                                                                                                
                                                                                                                                
10:30:05 AM                                                                                                                   
KIM  GARNERO,  Director,  Division   of  Finance,  Department  of                                                               
Administration,  said that  figure is  nationwide for  all state,                                                               
federal, and local governments.                                                                                                 
                                                                                                                                
MS. TUCK said it could cost the state quite a bit of money.                                                                     
                                                                                                                                
SENATOR FRENCH asked who might be opposed to this.                                                                              
                                                                                                                                
MS. TUCK said only federal  people. The cities, universities, and                                                               
school districts are in support of it.                                                                                          
                                                                                                                                
SENATOR FRENCH asked if there are any resolutions.                                                                              
                                                                                                                                
MS. TUCK  said she has  emails. The  only resolution was  a draft                                                               
and it came from the Fairbanks mayor.                                                                                           
                                                                                                                                
10:31:51 AM                                                                                                                   
MS. GARNERO said  she is a member of the  National Association of                                                               
State Auditors,  Controllers, and  Treasurers. It  represents all                                                               
50 states and passed a resolution  in 2006 to repeal this federal                                                               
law.                                                                                                                            
                                                                                                                                
SENATOR  GREEN  moved  to  report  HJR  41  from  committee  with                                                               
individual  recommendations and  attached  fiscal note(s).  There                                                               
being no objection, CSHJR 41(RLS) passed out of committee.