Legislature(2023 - 2024)SENATE FINANCE 532
04/23/2024 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB131 | |
| HB89 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 131 | TELECONFERENCED | |
| + | HB 89 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
April 23, 2024
9:04 a.m.
9:04:45 AM
CALL TO ORDER
Co-Chair Olson called the Senate Finance Committee meeting
to order at 9:04 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Donny Olson, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Jesse Kiehl
Senator Kelly Merrick
Senator David Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Representative Zack Fields; Representative Genevieve Mina;
Senator Elvi Gray-Jackson, Sponsor; Luma Diaz, Staff to
Senator Gray-Jackson; Shayne Nuesca, Interim State
Director, Make Us Visible Alaska; Lucy Hansen, CEO,
Polynesian Association of Alaska; Rebecca Carrillo, Self,
Juneau; Kaye Roldan, Self, Juneau; Representative Julie
Coulombe, Sponsor; Edra Morledge, Staff to Representative
Coulombe; Chad Hutchison, Director of State Relations,
University of Alaska; Leah Van Kirk, Health Care Policy
Advisor, Department of Health.
PRESENT VIA TELECONFERENCE
Kelly Manning, Deputy Director, Division of Innovation and
Education Excellence, Department of Education and Early
Development; Lee Montoya, Self, Anchorage; Tafilisaoa
Toleafeoa, Executive Director, Pacific Community of Alaska,
Anchorage; Nick Moe, Public Policy Manager, Thread Alaska;
Jen Griffis, Vice President of Policy and Advocacy, Alaska
Children's Trust; Michael Williams, Acting Deputy Director,
Tax Division, Department of Revenue.
SUMMARY
SB 131 ASIAN AMERICAN/PACIFIC ISLANDER PROGRAM
SB 131 was heard and HELD in Committee for
further consideration.
CSHB 89(FIN)
CHILD CARE: TAX CREDITS/ASSISTANCE/GRANTS
CSHB 89(FIN) was heard and HELD in Committee for
further consideration.
Co-Chair Olson discussed the agenda.
REPRESENTATIVE ZACK FIELDS,
REPRESENTATIVE GENEVIEVE MINA,
SENATE BILL NO. 131
"An Act requiring education in the history and
contributions of Asian Americans and Pacific
Islanders."
9:05:48 AM
SENATOR ELVI GRAY-JACKSON, SPONSOR, offered a brief history
of the bill. She recounted that a few years previously, the
consulate for Korea visited Anchorage. The consulate had
requested that the legislature work to provide education on
the history and contributions of Asian Americans and
Pacific Islanders.
Senator Gray-Jackson read from a Sponsor Statement (copy on
file):
Senate Bill 131 requires schools in the State of
Alaska to educate students on the history and
contributions of Asian Americans and Pacific
Islanders.
This curriculum will be established and provided by
each school district for students in kindergarten
through grade 12. The contributions of Asian Americans
and Pacific Islanders are aplenty and need to be
taught in schools. In addition to teaching about the
contributions of the two communities, schools will
also educate students on the cultural and economic
diversity of the communities. May is Asian Pacific
American History Month and was established as a way to
commemorate the immigration of the first Japanese
individuals to the US in 1843. There are numerous
sister cities between Japan and Alaska. Closest one to
Juneau is Nemuro, Japan. It is an ocean facing fishing
port. As early as 1788 there were Filipino seamen
contacting Alaskan Natives. As Alaska developed our
natural resource industries, there was a steady stream
of Filipino immigrant workers. May is also the
anniversary of the Transcontinental railroad
completion where most of the workers were Chinese
Immigrants.
Although we are recognizing Asian Americans and
Pacific Islanders as a group, they are very different
and have their individual traditions, culture, and
ways of life. It is important to teach our youth the
differences within these cultures and their
significance to our country.
9:08:49 AM
LUMA DIAZ, STAFF TO SENATOR GRAY-JACKSON, discussed a
Sectional Analysis (copy on file):
Section 1: AS 14.30 is amended by adding a new section
to article 10 which will require schools to teach
students about the history and contributions of Asian
Americans and Pacific Islanders. Each school will
establish a program that is specific to the history,
contributions, culture and economic diversity of Asian
Americans and Pacific Islanders in the United States.
Senator Gray-Jackson emphasized that there had been massive
support for the legislation and listed organizations that
had expressed support:
Make Us Visible Alaska, Polynesian Association of
Alaska, Mana, People of Oceania Association, Pacific
Community of Alaska, Filipino American National
Historical Society, Filipino Community of Anchorage,
AAPI Student Club University of Alaska Southeast,
Consular Outreach Mission Alaska, Filipino Community
of Juneau, Native Movement, UTOPIA Alaska, Korean
American Community of Anchorage, Ketchikan Wellness
Coalition, Sealaska Heritage Institute, Elder Della
Cheney, Mat-Su Kabayan, Asian Alaskan Cultural Center.
9:10:37 AM
SHAYNE NUESCA, INTERIM STATE DIRECTOR, MAKE US VISIBLE
ALASKA, spoke in support of the bill. She offered a brief
history of her emigration to the Unites States at 6 years
old. She discussed her work collecting and documenting the
oral histories of Filipinos in Alaska. She cited that
Asian-Americans and Pacific Islanders were the fasted
growing group in the state. She noted that Anchorage was
one of the most diverse cities in the country but that
was not reflected in the History curriculum in schools. She
listed notable contributions made by Filipino Americans in
Alaska. She relayed stories of being bullied in her youth
for being Filipino and hoped that passage of the
legislation would lead to a better informed, more
inclusive, and empathetic society.
9:14:19 AM
LUCY HANSEN, CEO, POLYNESIAN ASSOCIATION OF ALASKA, spoke
in support of the bill. She stressed the importance of the
bill to herself and young students so they would know their
history. She emphasized the importance of history and
instilling knowledge in youth. She said that she had
provided Asian and Pacific Islander historical knowledge
and information during Asian and Pacific Islander Heritage
Month for over 20 years. She believed that the legislation
would instill history and truth of the Asian and Pacific
Islander experience in the youth of Alaska.
9:17:11 AM
Senator Bishop was not certain how the curriculum would be
developed and how it would be taught. He requested that
some history of navigation skills be included.
Ms. Hansen thought other testifiers could speak to the
curriculum.
Co-Chair Olson expressed amazement at the history and
amazing achievement of navigation.
Ms. Hansen agreed.
9:18:55 AM
Co-Chair Olson OPENED public testimony.
9:19:14 AM
REBECCA CARRILLO, SELF, JUNEAU, testified in support of the
bill. She asserted that Asian Americans and Pacific
Islanders were an integral part of America and were
comprised of over 50 ethnic groups, speaking over 100
languages, with connections to Chinese, Indian, Japanese,
Filipino, Vietnamese, Samoan, Tongan, and others. She added
that it was crucial to add to the curriculum to K-12
education in the state. She asserted that adding the
material to K-12 curriculum would help for understanding
the struggles, sacrifices, and contributions of Asian
Americans and Pacific Islanders in the building of America.
She added that the added curriculum would enrich the
experiences of Asian American and Pacific Islander youth,
foster understanding, encourage tolerance, bring friendship
across cultures, and bring hope and peace to an
increasingly divided nation.
9:22:17 AM
Co-Chair Olson asked how the bill would impact the work of
the schools.
KELLY MANNING, DEPUTY DIRECTOR, DIVISION OF INNOVATION AND
EDUCATION EXCELLENCE, DEPARTMENT OF EDUCATION AND EARLY
DEVELOPMENT (via teleconference), was not able to speak to
the district's possible response to passage of the bill.
She shared that updates to Social Studies standards were
already being done. She said that, should the bill pass, a
rubric would be identified to evaluate curriculum and
support districts in incorporating the curriculum.
Co-Chair Olson asked Ms. Manning to address the fiscal
note.
Ms. Manning discussed FN 1 from the Department of Education
and Early Development. She cited that the note included
costs for gathering educators to evaluate standards and
creating a rubric for curriculum evaluation. She said that
the note included a stipend for 20 educators to help with
the process and $35,000 for a facilitator to help with the
review. She said that the legal cost for updating
regulation had also been included in the note.
9:25:34 AM
Co-Chair Olson asked how to implement the bill so that it
would not be viewed as an unfunded mandate.
Ms. Manning thought it would be dependent on the existing
Social Studies curriculum. If there was not already
curriculum, curriculum would need to be purchased.
9:26:31 AM
Senator Wilson wondered whether the sponsor had heard from
any school districts about any anticipated cost.
Senator Gray-Jackson relayed that she had not heard
comments from any school districts.
9:27:18 AM
KAYE ROLDAN, SELF, JUNEAU, spoke in support of the bill.
She relayed that she had moved to Alaska at the age of 1
year. She discussed finding community and belonging at the
Filipino Community Hall in Juneau. She mentioned a showcase
of Filipino History in Alaska at the city museum. Ms.
Roldan stressed the importance of representation in
history. She quoted the late Dr. Walter Soboleff, Once you
know yourself you dont harm yourself. She said that
education about who you are and where you come from was
critical for building confidence and keeping culture alive.
9:30:51 AM
LEE MONTOYA, SELF, ANCHORAGE (via teleconference), spoke in
support of the bill. He relayed that he was a retired high
school counselor from the Anchorage School District. He had
found that Alaska and especially Anchorage was one of the
most diverse places in the United States. He recounted that
he had worked with families from all over the world. There
was a large Hmong population in Anchorage. Mr. Montoya
stressed that there was a huge need for the education
proposed in the bill. He encouraged passage of the
legislation.
9:33:17 AM
TAFILISAOA TOLEAFEOA, EXECUTIVE DIRECTOR, PACIFIC COMMUNITY
OF ALASKA, ANCHORAGE (via teleconference), testified in
support of the bill. She relayed that the Pacific Community
of Alaska was an organization that worked in Anchorage,
Juneau, Barrow, and Fairbanks. She was a mother of two and
mentioned the importance of representation. She felt that
the bill would elevate the voices of Asian and Pacific
Islanders. She spoke of the Hokule'a voyage to Juneau. She
noted that both Pacific Islanders and Indigenous Alaskans
were a part of that original history.
9:36:13 AM
Co-Chair Olson CLOSED public testimony.
Senator Gray-Jackson corrected that there was a letter of
support from the Anchorage School District in members
packets.
Ms. Diaz stressed that the importance of the bill was to
make the curriculum mandatory and not optional.
SB 131 was heard and HELD in Committee for further
consideration.
CS FOR HOUSE BILL NO. 89(FIN)
"An Act relating to education tax credits for certain
payments and contributions for child care and child
care facilities; relating to the insurance tax
education credit, the income tax education credit, the
oil or gas producer education credit, the property tax
education credit, the mining business education
credit, the fisheries business education credit, and
the fisheries resource landing tax education credit;
renaming the day care assistance program the child
care assistance program; relating to the child care
assistance program and the child care grant program;
providing for an effective date by amending the
effective date of secs. 1, 2, and 21, ch. 61, SLA
2014; and providing for an effective date."
9:37:39 AM
Co-Chair Olson relayed that it was the first hearing for HB
89.
9:37:55 AM
REPRESENTATIVE JULIE COULOMBE, SPONSOR, recounted that the
previous year she had been appointed to serve on the
Governor's Task Force on Childcare and work toward making
childcare more affordable to Alaskan families. She asserted
that childcare was a work force issue. She said that lack
of high-quality affordable care cost employers $152 million
per year. She had talked with private businesses and
childcare providers while crafting the legislation. She
related that the legislation addressed concerns raised by
the taskforce. She contended that it was not the job of the
government to provide childcare, but an environment could
be created to make it easier for those who wanted to start
a childcare business. Representative Coulombe pointed out
that women are over 60 percent of the state's workforce,
and housing and energy prices continued to increase forcing
women to work to support their families.
9:41:26 AM
Senator Bishop thanked the bill sponsor.
9:41:38 AM
EDRA MORLEDGE, STAFF TO REPRESENTATIVE COULOMBE, discussed
a presentation entitled "CHILDCARE: TAX CREDITS/
ASSISTANCE/GRANTS" (copy on file). She showed slide 2,
"Overview":
1. How the Childcare Assistance Program Works
Currently
2. HB 89 New Provisions
3. How the Childcare Tax Credits Work
4. Wrap-up
9:42:01 AM
Ms. Morledge turned to slide 3, "CURRENT PROGRAM":
• Provides a monthly subsidy to help with childcare
expenses based on a sliding fee scale for eligible
low-moderate income families up to 9%.
• The family benefit is based on geographic location,
type of care, age of child(ren), unit of care
authorized, and attendance at the childcare
facility.
• Parents must be participating in an eligible
activity of working, attending school or a job
training program, and meet non-financial and
financial criteria set by the department.
• The income limit is 85% of adjusted median income
for Alaska.
• Children between infancy and 12 years old are
eligible.
• Provides a $50 grant per child to childcare
facilities.
9:42:55 AM
Ms. Morledge reviewed slide 4, "HB 89 ~ PROVISIONS &
SECTIONS":
• Provides for the childcare tax credit, increases
education and childcare tax credits to $3 million
annually, and extends the tax credit sunset to
January 1,2028. (Secs. 1-21)
• Changes terminology throughout statute from "day
care" to "childcare." (Secs. 22-27, 29-32, and 36)
• Increases the income eligibility to 105% of the
State Median Income. (Sec. 24)
• Caps the family contribution at 7% (currently 9%).
(Sec. 28)
• Requires facilities to be designated as "high
quality" to receive childcare assistance funds.
(Sec. 31)
• Requires the prioritization of low-income children
for the childcare assistance program. (Sec. 34)
• Prohibits a childcare facility from denying a child
for acceptance at a facility based on disability or
socioeconomic status. (Sec. 34)
• Definition of "childcare facility" (Sec. 35)
• Eliminate the $50 per child grants to childcare
facilities. (Secs. 37 & 40)
• Effective Dates Tax credits sunset 1/1/2028 (Sec.
37); the Act takes effect 1/1/2026 (Sec. 39 & 41);
All other sections effective immediately (Sec. 42)
9:44:42 AM
Ms. Morledge addressed slide 5, "Childcare Tax Credits":
• Insurance Tax Credit Authorized Insurers in the
state (Sec. 1-3)
• Income Tax (Sec. 4-6)
• Oil & Gas Production Tax (Sec. 7-9)
• Oil & Gas Exploration, Production, and Pipeline
Property Tax (Sec. 10-12)
• Mining Business Tax (Sec. 13-15)
• Fisheries Tax (Sec. 16-18)
• Floating Fisheries Business Tax (Sec. 19-21)
o Raises the maximum tax credit (in
combination with the education tax credit)
to $3 million annually.
o Provides an inflation increase every 5 years
beginning in 2030.
o Includes contributions of cash or equipment
to a childcare facility, expenditures made
to a childcare facility for the taxpayer's
employees, or payments made to an employee
by the taxpayer to offset childcare costs.
o Education and Childcare Tax Credits sunset
January 1, 2028
9:45:33 AM
Ms. Morledge referenced slide 6, "IN WRAP-UP, - HB 89
WILL?":
• Incentivize the private sector to contribute to
childcare for their employees
• It does this by increasing the maximum contribution.
• Extends the sunset date to 2028
• Broaden access to the program for families, helping
parents return or enter the workforce, thus
increasing the number of children attending
childcare facilities, growing the industry and
increasing the seats available
• Lower the amount of the maximum contribution for
families to 7% of income
• Increase the eligibility threshold to 105% of the
State Median Income
Co-Chair Olson asked about the effective date of January 1,
2026.
Representative Coulombe relayed that the department had
requested the date because of the approval process on the
federal level.
9:46:54 AM
NICK MOE, PUBLIC POLICY MANAGER, THREAD ALASKA (via
teleconference), offered invited testimony in support of
the bill. He explained that Thread Alaska worked to provide
access to quality early education with a focus on
childcare. He relayed that the organization served more
than 10,000 families, 2,000 early educators and teachers,
and 400 early education programs. He mentioned a letter
with over 300 signatures in support of the legislation
(copy on file).
Mr. Moe emphasized that he was not using hyperbole when he
stated that there was a childcare crisis in the state. He
relayed that Thread anticipated more childcare programs
closing without stable and meaningful support from the
state.
Mr. Moe stressed that the state's economic infrastructure
struggled when there was not appropriate childcare
available. He stated that data showed that businesses were
impacted by families struggling to find childcare.
9:51:26 AM
Mr. Moe cited that lack of childcare impacted parents'
ability to be employed. He lauded the legislation and the
removal of the childcare grant program. He encouraged the
committee to support the legislation and budget items
related to childcare in the state.
9:53:55 AM
JEN GRIFFIS, VICE PRESIDENT OF POLICY AND ADVOCACY, ALASKA
CHILDREN'S TRUST (via teleconference), offered invited
testimony in support of the bill. She provided some
background to the work done by the Alaska Children's Trust
(ACT). She relayed that currently Alaskans spend 15 percent
to 35 percent of their income on childcare. She shared that
th
Alaska ranked 44 in the nation for economic wellbeing and
34 percent of Alaskan children had parents that lacked
secure employment. She said that parents that were able to
access the childcare they need reported reduced stress and
increased economic stability, which were important societal
factors for decreasing child abuse and neglect. She
believed that the bill was an important step in
revitalizing the childcare system in the state.
9:56:13 AM
CHAD HUTCHISON, DIRECTOR OF STATE RELATIONS, UNIVERSITY OF
ALASKA, offered invited testimony in support of the bill.
He discussed the education tax credit program, the three-
year extension, and the $2 million cap. He provided
examples of qualifying education tax credit contributions.
He names several companies that had contributed to the
past, such as Alaska Airlines and Glacier Fish Company. He
said that the credits varied over the years due to the
fluctuating economy from $2.1 million to $8.4 million.
9:59:26 AM
Senator Kiehl mentioned bill provisions related to
childcare quality. He mentioned training of childcare
workers. He asked for information regarding what UA
programs were available at various campuses.
Mr. Hutchison agreed to provide the information.
10:00:47 AM
LEAH VAN KIRK, HEALTH CARE POLICY ADVISOR, DEPARTMENT OF
HEALTH, addressed FN 2 from the Department of Health, OMB
Component number 1897. She cited that the amount of the
note was approximately $6.1 million. The largest portion of
the fiscal note was the grants and benefits line that
reflected the increased eligibility criteria; subsidies
would be provided to families above 85 percent of the state
median income and up to 105 percent. She said there were
18,000 additional children that met the criteria. A series
of assumptions had been developed to calculate the
projections and the calculations were broken down in 5
percent increments. The total, based on a 7 percent
utilization rate by 18,000 children, resulted in a total of
$5.6 million.
Ms. Van Kirk continued that additional staffing would be
required to administer the additional subsidies proposed in
the bill. Additional grant funding would be needed to
administer the program. She noted that all the positions
were eligible to be funded through 50/50 federal funds and
General Fund match.
10:03:45 AM
Senator Kiehl asked whether Ms. Van Kirk could discuss the
50/50 split in relation to the incentives for private
sector employers.
Ms. Van Kirk explained that the Childcare Development Block
Grant supported quality and subsidy initiatives at a 50/50
match, specific to the positions. Federal funds could be
used to support incentives for employers for developing
onsite or near site childcare centers.
10:04:58 AM
Co-Chair Olson requested that the Department of Revenue
comment on FN 3.
10:05:21 AM
MICHAEL WILLIAMS, ACTING DEPUTY DIRECTOR, TAX DIVISION,
DEPARTMENT OF REVENUE (via teleconference), spoke to FN 3
from the Department of Revenue, OMB Component 2476. He read
from the analysis on page 2 of the fiscal note:
This bill would expand the education tax credit to
include donations made to childcare facilities
(employer run or nonprofit) for the children of the
taxpayer's employees, or for payments made to an
employee of the taxpayer for the purpose of offsetting
the employee's childcare costs. The new provisions
would take effect 90 days from being signed into law
(est. July 1, 2024). This bill also would increase the
credit limit from $1 million to $3 million annually
per taxpayer. The bill extends the sunset provisions
to January 1, 2028.
Revenue Impact
The change in revenues reflected in this fiscal note
only include those eligible tax programs administered
by the Department. The bill's fiscal impacts can be
divided into three categories: (1) expansion of the
education tax credit to childcare facilities and
employer costs, (2) increase to the annual tax credit
limit, and (3) extending the credit repeal date.
(1) The revenue impact of the expansion of the credit
to childcare facilities and costs cannot be determined
because the Department of Revenue does not have
Alaska-specific data to estimate how many taxpayers
will claim the expansion of the credit, how many
taxpayers currently pay their employees' child care
costs or make donations to child care facilities for
the children of their employees, or how many taxpayers
will start paying their employees' child care costs or
making donations to child care facilities for the
children of their employees.
(2) The revenue impact of the increase in the credit
limit is estimated by applying historical information
at higher credit limits and interpolating the impact
of the $3 million annual credit limit. See the table
below. (3) The revenue impact of the increase in the
extension of the repeal date is estimated by using the
average of the last three years of actual credits
claimed as a basis going forward. See the table
below.
Mr. Williams said that the department could implement the
fiscal note using current resources.
10:08:15 AM
Senator Kiehl asked about the language in the proposed new
credits. He spoke of the payment to employee credit and
wondered whether the department had scrutinized the
language to be sure it covered payments to support only
childcare expenses. He feared that some businesses could
get tax breaks for wage hikes through creative wording of
the credit.
Mr. Williams relayed that the department had looked at the
language. He had a minor concern with the corporate income
tax statue language. He noted that the current wording of
the statute prevented double dipping. He said that he
could follow with specific language.
Senator Kiehl relayed that he would appreciate a follow up.
10:11:03 AM
Co-Chair Olson asked about tax credits pertaining to
childcare centers.
Mr. Williams noted that the statute would allow any
contribution for childcare to be claimed as a tax credit.
10:12:06 AM
Senator Kiehl mentioned his earlier question about
childcare quality and observed that there was a provision
that facilities be designated as "high quality." He asked
for discussion of the factors involved in the designation.
Representative Coulombe relayed that the task force had
discussed quality in depth. She said that the quality in
the bill was related to licensure. She said that all
childcare facility standards in Anchorage were equal to
Head Start programs. She explained that Head Start was a
federally subsidized program that could afford to meet
higher standards and other programs struggled to afford to
meet the standards. She stated that Thread had provided
training to ensure quality of centers and the balance
between quality and availability was hard to strike.
Senator Kiehl appreciated the response. He referenced
childcare facility grants and a new provision proposed in
the bill that prioritized children from low-income
families. He agreed that the need was tremendous and
queried compliance checks and auditing for centers. He
wondered if DOH would be auditing facilities' books.
Representative Coulombe relayed that the verbiage was added
in the previous committee of referral through amendment and
thought the department could speak about the matter. She
relayed that she was not sure how the provision would be
implemented.
10:15:59 AM
Senator Wilson agreed that there had been an amendment made
in the Senate Health and Social Services Committee. He said
that the language needed to be reviewed and an amendment
was forthcoming. He spoke on the previous topic of facility
quality and noted that the language had also been added by
amendment and that language still needed to be clarified.
10:16:49 AM
Senator Kiehl looked forward to working with the sponsor
and the HESS committee chair.
10:17:01 AM
Co-Chair Olson referenced page 20 of the bill asked if
there was a definition of quality childcare facility.
Representative Coulombe asked whether Co-Chair Olson was
referencing line 31, on page 20.
Co-Chair Olson answered affirmatively.
Representative Coulombe deferred to the department.
10:17:47 AM
Ms. Van Kirk relayed that there was not an identified
definition of "quality" in statute but thought there was a
road map to develop the definitions. She said that the
department supported grants that had developed a learning
growth system that had 5 different levels, 3 of which had
been launched in the state and integrated early childhood
education programs for quality. She noted that as the
sponsor had mentioned earlier, the initial base quality
rating was that a childcare facility was licensed.
CSHB 89(FIN) was heard and HELD in Committee for further
consideration.
ADJOURNMENT
10:19:42 AM
The meeting was adjourned at 10:19 a.m.