Legislature(2011 - 2012)SENATE FINANCE 532

02/06/2012 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 136 INCOME TAX CREDIT FOR EMPLOYING A VETERAN TELECONFERENCED
Heard & Held
+ SB 158 REAL ESTATE SALES LICENSEES TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                     February 6, 2012                                                                                           
                         9:05 a.m.                                                                                              
                                                                                                                                
9:05:03 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stedman called the Senate Finance Committee                                                                            
meeting to order at 9:05 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Dennis Egan                                                                                                             
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Lesil McGuire, Vice-Chair                                                                                               
Senator Johnny Ellis                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Senator Bill Wielechowski; Kendra Kloster, Staff, Senator                                                                       
Bill Wielechowski; Errol Champion, President, South East                                                                        
Alaska Board of Realtors                                                                                                        
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Calista Anderson, President, Veterans Helping Veterans,                                                                         
Anchorage                                                                                                                       
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 136    INCOME TAX CREDIT FOR EMPLOYING A VETERAN                                                                             
                                                                                                                                
          SB 136 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
SB 158    REAL ESTATE SALES LICENSEES                                                                                           
                                                                                                                                
          SB 158 was HEARD and HELD in committee for                                                                            
          further consideration.                                                                                                
                                                                                                                                
                                                                                                                                
SENATE BILL NO. 136                                                                                                           
                                                                                                                                
     "An Act providing a tax  credit for employing an Alaska                                                                    
     veteran that may  be taken against a  liability for the                                                                    
     tax  on  corporation  income;   and  providing  for  an                                                                    
     effective date."                                                                                                           
                                                                                                                                
9:05:49 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  discussed housekeeping, and the  intent of                                                                    
the committee.                                                                                                                  
                                                                                                                                
SENATOR BILL WIELECHOWSKI, explained  SB 136. He referred to                                                                    
the Sponsor  Statement (copy on  file). He stated  that some                                                                    
of Alaska's veterans  were some of the  most highly trained,                                                                    
highly educated, and highly skilled  workers in Alaska. When                                                                    
businesses hire  veterans, they  are getting  proven leaders                                                                    
with solid  work ethics who  can solve  problems efficiently                                                                    
while  staying  focused  and  contributing  to  an  improved                                                                    
bottom  line.  He  remarked   that  despite  many  employers                                                                    
acknowledging  the  advantages  of hiring  someone  who  had                                                                    
served  in Armed  Forces, veterans  continued to  see higher                                                                    
than average  unemployment rates  nationwide. In  June 2011,                                                                    
according  to the  U.  S. Bureau  of  Labor Statistics,  one                                                                    
million U. S. veterans were  unemployed and the jobless rate                                                                    
for  post-9/11 veterans  was 13.3  percent. The  picture was                                                                    
even worse for  young, male veterans between the  ages of 18                                                                    
and  24,  who saw  an  unemployment  rate of  21.9  percent.                                                                    
Senate  Bill  136  would assist  Alaska's  veterans  to  get                                                                    
civilian  jobs  when  they leave  the  service  and  provide                                                                    
direct benefits to Alaska  businesses. The legislation would                                                                    
provide a  $2,000 credit  for each  veteran hired  who would                                                                    
work  at least  1,560  hours within  a  12-month period,  or                                                                    
approximately  30 hours  a  week. The  tax  credit could  be                                                                    
applied in the first year  after 12 months of employment and                                                                    
any credits not  used could be used in a  later tax year. He                                                                    
stressed that  struggling Alaskan  businesses could  get the                                                                    
tax  help   they  need,  while  Alaska's   veterans  had  an                                                                    
increased chance of finding employment.                                                                                         
                                                                                                                                
Senator  Wielechowski  stated  that  the  number  one  issue                                                                    
veterans faced was integrating back  into the job force once                                                                    
they returned from combat.                                                                                                      
                                                                                                                                
9:07:55 AM                                                                                                                    
                                                                                                                                
Co-Chair   Stedman  requested   an  explanation   of  credit                                                                    
availability,  and wondered  who qualified  for the  credit.                                                                    
Senator   Wielechowski  stated   that  the   bill  currently                                                                    
included all  veterans, but would  be willing to  narrow the                                                                    
availability.  He  stated  that there  were  some  different                                                                    
veteran  tax credits  from different  parts of  the country.                                                                    
There  was currently  a  federal tax  credit  of $2,400  for                                                                    
veterans who had been unemployed  for four weeks or more. He                                                                    
stated  that other  states had  tax  credits for  unemployed                                                                    
veterans  who had  a period  of unemployment  for a  certain                                                                    
amount of  time, or for  veterans who had returned  from the                                                                    
Gulf War or later.                                                                                                              
                                                                                                                                
Co-Chair Stedman wondered  if the tax credit  would enable a                                                                    
company  to "rob"  an existing  veteran employee  from their                                                                    
current  employer.  Senator  Wielechowski replied  that  the                                                                    
current legislation stated  that if you hire  a new veteran,                                                                    
and they  are employed  for 1,560  hours for  12 consecutive                                                                    
months, then  you would be  eligible for the tax  credit. He                                                                    
noted that there was a good  incentive to tailor the bill to                                                                    
newly separated veterans.                                                                                                       
                                                                                                                                
In  response to  a question  from Co-Chair  Stedman, Senator                                                                    
Wielechowski stated that the current  federal tax credit was                                                                    
appropriate. He  also pointed out  that the focus  should be                                                                    
on  veterans that  had been  unemployed for  more than  four                                                                    
weeks.  He  furthered that  there  was  a real  unemployment                                                                    
problem for  veterans who  were returning  from the  wars in                                                                    
Iraq and Afghanistan.                                                                                                           
                                                                                                                                
Senator  Thomas pointed  out the  possible issues  regarding                                                                    
seasonal employment, and wondered  if that was considered in                                                                    
the drafting of the  bill. Senator Wielechowski replied that                                                                    
seasonal employment  was not considered in  the first draft,                                                                    
but suggested a credit of $100 for seasonal employment.                                                                         
                                                                                                                                
9:12:46 AM                                                                                                                    
                                                                                                                                
Senator  Olson  wondered  how   many  other  states  offered                                                                    
similar tax  credits and  how those  credits compared  to SB                                                                    
136.  KENDRA  KLOSTER,  STAFF,  SENATOR  BILL  WIELECHOWSKI,                                                                    
referred  to the  Legislative Research  Report on  State and                                                                    
Federal Tax  Credits for Business  that Hire  Veterans (copy                                                                    
on file).  She remarked that Vermont,  California, Illinois,                                                                    
and  West Virginia  had similar  tax  credits. She  stressed                                                                    
that many  states had different  sideboards, and  noted that                                                                    
California  had a  requirement that  the  veteran have  left                                                                    
military service within 48 months.                                                                                              
                                                                                                                                
Senator Olson  wondered how successful the  programs were in                                                                    
other   states.  Ms.   Kloster   agreed   to  provide   that                                                                    
information.                                                                                                                    
                                                                                                                                
Co-Chair  Stedman noted  the one  previously published  zero                                                                    
fiscal  note from  the Department  of Revenue,  Taxation and                                                                    
Treasury Division.  He felt that  the fiscal note  should be                                                                    
indeterminate, rather than zero.                                                                                                
                                                                                                                                
CALISTA  ANDERSON,  PRESIDENT,  VETERANS  HELPING  VETERANS,                                                                    
ANCHORAGE (via  teleconference), testified in support  of SB                                                                    
136. She felt that the  bill would benefit veterans, and get                                                                    
them to  work. She pointed  out that many veterans  were out                                                                    
of  work,  and  currently  struggled  to  get  and  maintain                                                                    
employment.                                                                                                                     
                                                                                                                                
9:16:39 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:17:05 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Ms. Anderson  continued with her testimony.  She stated that                                                                    
many  veterans  face  difficult times.  She  referred  to  a                                                                    
letter of support (copy on file).                                                                                               
                                                                                                                                
Co-Chair Stedman requested a brief  synopsis of how the bill                                                                    
would  treat  the  wounded  veterans.  Senator  Wielechowski                                                                    
replied that SB 136 would  provide a $2,000 for any veteran-                                                                    
wounded or not wounded.                                                                                                         
                                                                                                                                
SB  136  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
SENATE BILL NO. 158                                                                                                           
                                                                                                                                
     "An Act relating to the Real Estate Commission; and                                                                        
     providing for an effective date."                                                                                          
                                                                                                                                
9:20:59 AM                                                                                                                    
                                                                                                                                
Senator Egan explained  SB 158, and referred  to the Sponsor                                                                    
Statement (copy on file). He  stated that SB 158 would allow                                                                    
the  real  estate  commission  to  appoint  an  overseer  to                                                                    
temporarily manage  a brokerage  in the  event a  broker was                                                                    
unable  to for  certain  reasons, including  a traumatic  or                                                                    
medical  event,  having  a license  suspended,  or  upon  an                                                                    
investigative  finding that  substantial evidence  points to                                                                    
misappropriation of funds. This  assured that trust accounts                                                                    
and   other   sensitive   business  affairs   were   handled                                                                    
responsibly.  The bill  would also  clarify that  a licensed                                                                    
assistant can only work for  the brokerage in which they are                                                                    
licensed. Ambiguity  in current law has  been interpreted to                                                                    
allow an  assistant licensed in  a brokerage to work  in any                                                                    
other  brokerage or  in multiple  brokerages. The  intent of                                                                    
current law was  to limit an assistant to  one brokerage. He                                                                    
furthered that SB 158 would  also allow a licensee to donate                                                                    
a portion of a commission to  charity. It would also allow a                                                                    
licensee to  advertise that some  of their  commission would                                                                    
be donated to a charity.                                                                                                        
                                                                                                                                
Co-Chair  Stedman called  Mr. Champion  to the  table. ERROL                                                                    
CHAMPION,  PRESIDENT, SOUTHEAST  ALASKA  BOARD OF  REALTORS,                                                                    
spoke  in support  of  SB  158, and  felt  it would  clarify                                                                    
current statute.                                                                                                                
                                                                                                                                
Co-Chair  Stedman   noted  recent  issues   regarding  local                                                                    
brokerage  firms  and  trust funds,  and  wondered  if  that                                                                    
influenced  the legislation.  Mr.  Champion  replied that  a                                                                    
broker was  found to  have misused a  trust fund,  and there                                                                    
was no one  that the Real Estate  Commission could designate                                                                    
to  monitor the  fund. The  person that  was charged  had to                                                                    
execute the close down of the fund.                                                                                             
                                                                                                                                
Co-Chair Stedman wondered  why charitable contributions were                                                                    
included  in SB  158.  Mr. Champion  replied  that the  bill                                                                    
would  change  the statute  to  allow  the designation,  and                                                                    
publicly declare the intention of the licensee.                                                                                 
                                                                                                                                
Senator Egan noted  the zero fiscal note, and  felt the zero                                                                    
fiscal note was merely housekeeping.                                                                                            
                                                                                                                                
Co-Chair  Stedman  mentioned  the one  previously  published                                                                    
zero fiscal note from the  Department of Commerce, Community                                                                    
and Economic Development.                                                                                                       
                                                                                                                                
SB  158  was  HEARD  and   HELD  in  committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair Stedman discussed the following day's agenda.                                                                          
                                                                                                                                
ADJOURNMENT                                                                                                                   
9:27:29 AM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 9:27 AM.                                                                                           
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
Leg Research Vet Tax Credit Updated Report 12 28 11.pdf SFIN 2/6/2012 9:00:00 AM
SB 136
SB136 memo of changes.pdf SFIN 2/6/2012 9:00:00 AM
SB 136
SB136 AK Business Monthly Hiring Military Veterans is Good Business.pdf SFIN 2/6/2012 9:00:00 AM
SB 136
SB136 Sectional Analysis.pdf SFIN 2/6/2012 9:00:00 AM
SB 136
SB136 Sponsor Statement.pdf SFIN 2/6/2012 9:00:00 AM
SB 136
SB136 Support Letter Dixie Banner.pdf SFIN 2/6/2012 9:00:00 AM
SB 136
SB136 Support Letter Vets Helping Vets.pdf SFIN 2/6/2012 9:00:00 AM
SB 136
SB136 Vietnam Veterans of America Support Letter.pdf SFIN 2/6/2012 9:00:00 AM
SB 136
SB 158 lttr supporting Bates 012412.pdf SFIN 2/6/2012 9:00:00 AM
SB 158
SB 158 Lttr supporting, Somers.pdf SFIN 2/6/2012 9:00:00 AM
SB 158
SB 158 Sponsor Statement.pdf SFIN 2/6/2012 9:00:00 AM
SB 158
SB158 lttr supporting AK Assoc of Realtors.pdf SFIN 2/6/2012 9:00:00 AM
SB 158