HARRY HUGHES, Governor                               2293

will not be available to the taxpayer; limiting the
total amount of the credit with respect to qualified
first-year wages based upon a certain percentage of the
aggregate unemployment insurance wages paid by the
employer during a calendar year; decreasing the amount
of the deduction for wages paid which is taken by the
employer to the extent of the credit taken under this
Act; defining those individuals who are in "targeted
groups" and whose employment this Act is intended to
encourage; limiting the credit that can be taken in any
taxable year relative to the taxpayer's income tax
liability for that year; restricting the credit to
employees who receive more than a certain percent of
their pay as compensation for services rendered for a
trade or business of the employer; providing for the
application of certain provisions of the Internal
Revenue Code where that application would result in the
reasonable administration of this Act; directing
certain officials to apprise employers of the
availability of this credit; and generally relating to
the allowance of an income tax credit for a taxpayer
employing certain persons for a minimum length of time
during a taxable year.

May 29, 1979
Honorable Benjamin I. Cardin
Speaker of the House of Delegates
State House
Annapolis, Maryland 21404

Dear Mr. Speaker:

In accordance with Article II, Section 17 of the
Maryland Constitution, I have today vetoed House Bill 821.

This bill provides that an employer may take a credit
from his Maryland income tax liability based on a percentage
of wages paid during the first two years of employment of
individuals who belong to certain "targeted" groups, as
provided in the Internal Revenue Code.

This State tax credit program would be patterned after
the much more extensive Federal Targeted Program, the major
difference being the amount of the credits. The maximum
savings currently available to an employer under the federal
program is $3,000 in the first year and $1,500 in the
second, whereas the maximum savings under the proposed State
program would be $240 in the first year and $120 in the
second year. I am advised and agree that the availability
of the relatively small additional State credits would not
appear to be a significant incentive for an employer to
participate, if he otherwise would not. In effect, the
proposed State program would provide tax credits designed
only to motivate employers to do that which they would do in
any event. In short, we would be purchasing that which we