CSHB 433(L&C): "An Act establishing a tax credit for taxpayers engaged in a trade or business who employ certain persons who are state residents; specifying penalties for fraudulent claim of certain tax credits; and providing for an effective date."
00CS FOR HOUSE BILL NO. 433(L&C) 01 "An Act establishing a tax credit for taxpayers engaged in a trade or business 02 who employ certain persons who are state residents; specifying penalties for 03 fraudulent claim of certain tax credits; and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. LEGISLATIVE FINDINGS. The legislature finds that 06 (1) it is in the best interest of the state to have a steady work force and to have 07 its residents gainfully employed; 08 (2) during 1995, private industry and state and local governments employed 09 more than 78,000 nonresidents; 10 (3) nonresidents made up 22.6 percent of all wage and salary workers in the 11 private sector and in state and local government in 1995; 12 (4) in 1995, nonresidents earned more than $923,000,000, a nearly $9,000,000 13 increase over 1994; 14 (5) more than 27,000 nonresidents were newly hired in the third quarter of
01 1995 alone; 02 (6) nonresident hire is not a new phenomenon in Alaska; since inception of 03 territorial status, seasonal employment, particularly in fishing and forestry, has been common; 04 there is a continual flow of population between Alaska and other states, but, with regard to 05 transient employment, the traffic is virtually "one way"; a small percentage of Alaska residents 06 earn wages in other states, while one in eight dollars of wages paid in Alaska are paid to 07 nonresidents; 08 (7) many residents of Alaska could have filled the positions that went to 09 nonresidents; maximizing the employment of Alaskans not only ensures that maximum benefit 10 accrues to the state from economic development activity, but also reduces demands upon state 11 "safety net" programs, such as unemployment insurance and public assistance; 12 (8) Alaska's jobless rate was 9.4 percent in January 1997; the unemployment 13 figures ranged from a high of 20.4 percent in the Yukon-Kuskokwim census area to 4.6 14 percent in the North Slope area; even in areas of Alaska with large amounts of commercial 15 activity, the unemployment figures varied; Anchorage, the state's largest city, had a January 16 unemployment rate of 6.1 percent, Fairbanks had a rate of 9.4 percent, while Juneau's rate was 17 8.1 percent; the Matanuska-Susitna Borough's unemployment rate for that same time period 18 was 12.8 percent and the Kenai Peninsula Borough's rate was 19 percent; the average for the 19 nation at the same time was 5.9 percent; 20 (9) the seasonally adjusted unemployment rate in January 1997 for Alaska was 21 7.5 percent, while it was 5.4 percent for the United States; 22 (10) more than 29,000 Alaskans were unemployed in January 1997, an increase 23 of 3,000 from December 1996. 24 * Sec. 2. AS 43.20 is amended by adding a new section to read: 25 Sec. 43.20.023. Credit for taxpayer employing state resident. (a) Subject 26 to (b) of this section, a taxpayer engaged in a trade or business is entitled to a credit 27 against the taxpayer's tax liability under this chapter for employing a person who, at 28 the time of the person's employment by the taxpayer, was 29 (1) a resident of the state; 30 (2) a graduate of or had been a student at a qualifying postsecondary 31 educational institution located in the state; and
01 (3) not previously employed by the taxpayer. 02 (b) Subject to (1) of this subsection, the credit claimed by a taxpayer under (a) 03 of this section is $500 for each employee described in (a) of this section. The amount 04 of a credit under this section 05 (1) may be claimed only during the taxpayer's tax year in which the 06 taxpayer first employed the state resident, and the total amount of all credits claimed 07 by a taxpayer under (a) of this section for a tax year may not exceed $75,000; 08 (2) may not 09 (A) be claimed as a credit under another provision of this title; 10 (B) also be allowed as a deduction under 26 U.S.C. 170 against 11 the tax imposed by this chapter; or 12 (C) be claimed by a taxpayer found to have committed civil tax credit fraud under AS 43.05.220(c)(2). 13 (c) In this section, 14 (1) "postsecondary educational institution" has the meaning given in 15 AS 14.48.210; 16 (2) "qualifying postsecondary educational institution" means a 17 postsecondary educational institution that, for educational services rendered during the 18 period the person was a student at the institution, received state funds, grants, or other 19 aid; in this paragraph, "state funds, grants, or other aid" does not include student loans, 20 grants, or scholarships; 21 (3) "resident" means an individual who is physically present in the state 22 with the intent to remain permanently in the state under the requirements of 23 AS 01.10.055 and has been physically present in the state for at least one year at the 24 time of the person's first employment by the taxpayer. 25 * Sec. 3. AS 43.05.220(c) is amended to read: 26 (c) If a tax deficiency or part of a tax deficiency is due to 27 (1) fraud, in addition to penalties determined under (a) or (b) of this 28 section, a civil fraud penalty equal to 50 percent of the tax due or $500, whichever is 29 greater, shall be added to the tax ; 30 (2) a fraudulent claim of credit under AS 43.20.023, [. THIS 31 PENALTY IS] in addition to penalties determined under (a) or (b) of this section , a
01 civil tax credit fraud penalty equal to five times the credit fraudulently claimed 02 under AS 43.20.023 shall be added to the tax . 03 * Sec. 4. This Act takes effect January 1, 1999, and applies to persons employed and 04 expenses incurred after December 31, 1998, for which the credit authorized by sec. 2 of this 05 Act may be claimed.