01/26/2012 09:00 AM Senate STATE AFFAIRS

        SB 136-INCOME TAX CREDIT FOR EMPLOYING A VETERAN                                                                    
                                                                                                                                
9:57:12 AM                                                                                                                    
                                                                                                                                
SENATOR  WIELECHOWSKI  announced  the consideration  of  SB  136,                                                               
which would provide a tax credit  to Alaskan employers who hire a                                                               
veteran.                                                                                                                        
                                                                                                                                
KENDRA KLOSTER, staff to Senator  Bill Wielechowski, explained SB
 is an income tax credit  for employing a veteran. She related                                                               
that  veterans  are  some  of the  most  highly  trained,  highly                                                               
educated, and highly skilled workers.  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-911  veterans was                                                               
13.3  percent.  The  picture  was  even  worse  for  young,  male                                                               
veterans  who  saw an  unemployment  rate  of 21.9  percent.  The                                                               
intention of the  bill is a win-win situation;  for businesses to                                                               
receive a $2,000 tax credit  for hiring veterans and for veterans                                                               
to get employment.                                                                                                              
                                                                                                                                
MS.  KLOSTER explained  that the  $2,000 tax  credit is  for each                                                               
veteran hired  who works at  least 1,560 hours within  a 12-month                                                               
period, or approximately  30 hours a week. The tax  credit can be                                                               
applied in the first year after 12-months of employment.                                                                        
                                                                                                                                
SENATOR WIELECHOWSKI moved to adopt Amendment 1:                                                                                
                                                                                                                                
                                               27-LS0983\I.1                                                                    
                                                     Bullock                                                                    
                                                                                                                                
                          AMENDMENT 1                                                                                       
                                                                                                                                
     OFFERED IN THE SENATE              BY SENATOR WIELECHOWSKI                                                                 
     TO: SB 136                                                                                                                 
                                                                                                                                
     Page 1, line 1:                                                                                                            
          Delete "an Alaska"                                                                                                  
          Insert "a"                                                                                                          
                                                                                                                                
     Page 1, lines 6 - 7:                                                                                                       
          Delete "an Alaska veteran and employs the                                                                             
     veteran"                                                                                                                   
          Insert "a veteran and employs the veteran in the                                                                      
     state"                                                                                                                     
                                                                                                                                
     Page 1, line 8:                                                                                                            
          Delete "Alaska"                                                                                                       
                                                                                                                                
     Page 2, line 4:                                                                                                            
          Delete "Alaska"                                                                                                       
                                                                                                                                
     Page 2, line 6:                                                                                                            
          Delete "an Alaska veteran, and the Alaska"                                                                            
          Insert "a veteran, and the veteran"                                                                                   
                                                                                                                                
     Page 2, line 9:                                                                                                            
          Delete "an Alaska"                                                                                                    
          Insert "a"                                                                                                            
                                                                                                                                
     Page 2, line 10:                                                                                                           
          Delete ""Alaska veteran" has the meaning given in                                                                     
     AS 36.30.175"                                                                                                              
          Insert ""veteran" means an individual who served                                                                      
     in the                                                                                                                     
               (1)  armed forces of the United States,                                                                          
      including a reserve unit of the United States armed                                                                       
     forces; or                                                                                                                 
               (2)  Alaska Territorial Guard, the Alaska                                                                        
     Army National Guard, the Alaska Air National Guard, or                                                                     
     the Alaska Naval Militia"                                                                                                  
                                                                                                                                
CHAIR WIELECHOWSKI objected for discussion purposes.                                                                            
                                                                                                                                
MS.  KLOSTER  explained  that  Amendment  1  came  about  through                                                               
conversations with the Tax Division  in the Department of Revenue                                                               
regarding  the wording,  "an Alaska  veteran". The  Department of                                                               
Law also raised  questions about that wording. A  change was made                                                               
to say "a veteran" instead.                                                                                                     
                                                                                                                                
SENATOR   WIELECHOWSKI   withdrew   his  objection.   Seeing   no                                                               
objection, Amendment 1 was adopted.                                                                                             
                                                                                                                                
10:00:42 AM                                                                                                                   
RIC  DAVIDGE,   President,  Chapter  904,  Vietnam   Veterans  of                                                               
America,  testified in  support of  SB  136. He  reported on  the                                                               
recent success  of the Vietnam  Veterans of America in  getting a                                                               
veterans' jobs  bill passed by  Congress. The idea is  to provide                                                               
businesses  and  corporations  with   a  tax  credit  for  hiring                                                               
veterans. The  federal bill sets  up a  start point for  a $2,400                                                               
tax credit. Currently,  48 states are considering  the program or                                                               
are doing it.  He recommended a matching tax credit  in Alaska of                                                               
$2,600,  which  would provide  a  corporate  tax credit  totaling                                                               
$5,000. He described the advantages  of providing a tax credit to                                                               
businesses.  He  said that  Alaska  has  the highest  per  capita                                                               
number  of veterans  in  the U.S.  with  about 1,300-1,400  newly                                                               
retired military  annually. He  urged the  committee to  pass the                                                               
legislation with an increase to $2,600.                                                                                         
                                                                                                                                
10:03:31 AM                                                                                                                   
JOHANNA  BALES,  Deputy  Director, Tax  Division,  Department  of                                                               
Revenue, offered to answer questions about SB 136.                                                                              
                                                                                                                                
SENATOR   WIELECHOWSKI  asked   if   the  fiscal   note  was   an                                                               
indeterminate or zero note.                                                                                                     
                                                                                                                                
MS. BALES explained  that it was indeterminate for  the effect on                                                               
income tax revenues. As the bill  is written, for every $2,000 in                                                               
credit, corporate income  tax would decrease by  that amount. The                                                               
department  is unable  to determine  how many  veterans would  be                                                               
hired  and how  many  corporations would  take  advantage of  the                                                               
credit. She  noted that the  Department of Revenue would  be able                                                               
to absorb any costs of this program with existing resources.                                                                    
                                                                                                                                
SENATOR WIELECHOWSKI closed public testimony.                                                                                   
                                                                                                                                
SENATOR WIELECHOWSKI set SB 136 aside.                                                                                          
                                                                                                                                
SENATOR WIELECHOWSKI  commented that veteran tax  credit programs                                                               
in  other   states  are  done   in  various  ways.   He  welcomed                                                               
suggestions.