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." 9:11:14 AM Senator Ellis MOVED to ADOPT the proposed committee substitute for SB 136, Work Draft 27-LS0983\R (Bullock, 2/16/12) as a working document. 9:11:19 AM Co-Chair Stedman Objected for the purpose of discussion. DARWIN PETERSON, STAFF, SENATOR BERT STEDMAN, explained that the new CS version R incorporated four changes as follows: · Subsection B on page 1, line 9 was rewritten so that in order for the tax credit to apply, the veteran must have been unemployed for at least four weeks. · Page 1, line 13 now required the tax credit to be applicable for up to ten years for disabled veterans. · On page 2, line 7 the amount of the tax credit was increased to $3,000 for a disabled veteran; the amount remained $2,000 for other veterans. · On page 2, line 9 a $1,000 tax credit was added for seasonal employment; under this section, a veteran must be employed for at least 600 hours for five consecutive months in order to qualify. 9:12:47 AM Co-Chair Stedman WITHDREW his OBJECTION. Seeing NO FURTHER OBJECTION, Work Draft 27-LS0983\R was ADOPTED. Senator Wielechowski introduced SB 136 and stated that the changes in the new CS made the legislation better. The bill was designed assist veterans with the unemployment problem that they were currently experiencing. He stated that there had been concerns raised during a veterans summit in Fairbanks and at a town hall meeting in Anchorage that veterans had a higher than average unemployment rate state- wide, as well as on the national level. Senator Wielechowski explained that the first Section of the bill specified that you could take a tax credit for employing a veteran; the credit could be taken within ten years of service for disabled veterans and within two years for non-disabled veterans. The rationale behind the timeframe was that it was harder for veterans to find jobs during the first months and years after exiting service. Senator Wielechowski stated that sub-Section C on page 2, lines 5 through 8 detailed that in order to qualify for the tax credit, employment had to cover 12 consecutive months and 1,560 work hours; the credit was $3,000 for a disabled veteran and $2,000 for a non-disabled veteran. Senator Wielechowski pointed out that sub-Section 2 on page 2, lines 9 through 13 was added in response to a suggestion from Senator Thomas and that it incorporated a $1,000 tax credit for employing a veteran in a seasonal position. 9:15:26 AM Senator Olson referenced the tax credit increase from $2,000 to $3,000 for disabled veterans and queried how the amount of $2,000 was initially determined. Senator Wielechowski responded that the amount of the credit had been determined by looking at what the other states and the federal government had set their credits at. He noted that he believed the federal government had set their credit at $2,400. He observed that it had been Co-Chair Stedman's idea to increase the credit in SB 136 to $3,000 for disabled veterans and stated that he agreed with the idea. Senator Olson asked how the tax credit compared to that of other states. Senator Wielechowski stated that Legislative Research Services had conducted an analysis about the other state and federal tax credits that were available to veterans (copy on file). He gave examples of other state's veteran tax credits as follows: · Vermont had a $2,000 tax incentive, but it only applied to veterans who had returned from deployment in Afghanistan or Iraq with the last two years. · California's veteran tax credit required that a veteran had left service in the last 48 months. · Illinois had a tax credit that was not to exceed $1,200 annually. · West-Virginia had a tax credit available to an employer of the first $5,000 in wages. Senator Thomas thanked the bill sponsor for the inclusion of seasonal employment in the legislation. Co-Chair Stedman discussed a previously published indeterminate fiscal note: FN1 (DOR). 9:17:50 AM Senator Ellis MOVED to report CSSB 136(FIN) out of committee with individual recommendations and the accompanying fiscal note. There being NO OBJECTION, it was so ordered. 9:18:23 AM CSSB 136(FIN) was REPORTED out of committee with a "do pass" recommendation and with a previously published indeterminate fiscal note: FN1 (DOR). Co-Chair Stedman asked that the record reflect that Senator McGuire had joined the committee and that Senator Cathy Giessel had been present throughout the meeting.