05/09/2025 08:00 AM House EDUCATION

           HB 190-CHILD CARE ASSISTANCE; TAX CREDITS                                                                        
                                                                                                                                
9:00:00 AM                                                                                                                    
                                                                                                                                
CO-CHAIR STORY announced  that the final order  of business would                                                               
be HOUSE  BILL NO.  190, "An  Act relating  to the  insurance tax                                                               
education credit;  relating to the  income tax  education credit;                                                               
relating to  the oil or  gas producer education  credit; relating                                                               
to  the property  tax education  credit; relating  to the  mining                                                               
business  education credit;  relating to  the fisheries  business                                                               
education credit; relating to 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;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
9:00:46 AM                                                                                                                    
                                                                                                                                
}AIMEE BUSHNELL,  Legislative Liaison, Department of  Revenue, On                                                               
behalf of House Rules by  request of the governor, prime sponsor,                                                               
presented  HB 190  to the  committee.  She read  from a  prepared                                                               
statement [not included  in the committee packet],  which read as                                                               
follows [original punctuation provided]:                                                                                        
                                                                                                                                
        Good morning, Madam co-chairs and members of the                                                                        
     House Education Committee.                                                                                                 
     Thank  you for  hearing House  Bill 190  and having  us                                                                    
     before you today.                                                                                                          
     My  name  is  Aimee  Bushnell,  I  am  the  Legislative                                                                    
     Liaison for the Department of Revenue.                                                                                     
     Good  morning, for  the  record, my  name  is Leah  Van                                                                    
     Kirk, Health Care Policy Advisor  for the Department of                                                                    
     Health.                                                                                                                    
                                                                                                                                
     Starting off, I would like  to provide a quick recap of                                                                    
     why House Bill 190 is before you today.                                                                                    
     Last Legislative  Session, Senate  Bill 189  passed the                                                                    
     Legislature  and  became  law  without  the  Governor's                                                                    
     signature on  October 9, 2024,  as CH15 SLA 24.  SB 189                                                                    
     was an  omnibus bill  that wrapped several  other bills                                                                    
     into it at  the end of session. The sections  of SB 189                                                                    
     dealing with  the child care  portion of  the education                                                                    
     tax  credit came  from then  House Bill  89. HB  89 had                                                                    
     multiple  hearings,  passed  the   House  and  made  it                                                                    
     through   the  Senate   Health   and  Social   Services                                                                    
     committee   and  eventually   to  the   Senate  Finance                                                                    
     committee,  but  ultimately  did  not make  it  to  the                                                                    
     Senate floor.                                                                                                              
                                                                                                                                
     SB  189   is  currently   the  subject  of   a  lawsuit                                                                    
     challenging  the "single-subject"  of  the bill,  which                                                                    
     would void the changes made last year.                                                                                     
     Because  of that,  the Governor  has  put forward  this                                                                    
     bill.                                                                                                                      
                                                                                                                                
     To avoid the statutes from  being reverted in the event                                                                    
     the  State loses  the challenge  to the  single-subject                                                                    
     rule  in court,  this  bill repeals  and replaces  with                                                                    
     portions  of HB  89 that  were  added to  SB 189.  This                                                                    
     includes the  expansion of the education  tax credit to                                                                    
     include  donations  made   to  child  care  facilities,                                                                    
     operated  by  the  employer or  a  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 child care costs.                                                                                
                                                                                                                                
     There  is  one  additional  tax change  in  this  bill,                                                                    
     raising the education tax credit  cap from $3M to $10M.                                                                    
     Previously, SB 189 raised the  education tax credit cap                                                                    
     from $1M to $3M.                                                                                                           
                                                                                                                                
9:02:52 AM                                                                                                                    
                                                                                                                                
LEAH VAN KIRK,  Health Care Policy Advisor,  Department of Health                                                               
& Social  Services, on behalf  of House  Rules by request  of the                                                               
governor, prime sponsor,  presented HB 190 to  the committee. She                                                               
read from  a prepared  statement [not  included in  the committee                                                               
packet], which read as follows [original punctuation provided]:                                                                 
                                                                                                                                
          The second  half of HB  190 focuses on  changes to                                                                    
     the  Child  Care  Assistance,   and  Child  Care  Grant                                                                    
     programs    to    support   the    affordability    and                                                                    
     accessibility of child care for families.                                                                                  
     This bill  makes changes to  the child  care assistance                                                                    
     program by adding  additional rate methodology options,                                                                    
     such  as a  cost of  care  study and  the market  price                                                                    
     survey,  to  establish  subsidy  rates  that  are  more                                                                    
     aligned with  the actual cost  of providing  child care                                                                    
     throughout the state.                                                                                                      
     This bill  also adds  language to allow  for exemptions                                                                    
     from   income  eligibility   requirements  in   certain                                                                    
     instances, following the federal requirements.                                                                             
          An  example of  this may  include waiving  co-pays                                                                    
     for   families   who    meet   certain   criteria,   or                                                                    
     establishing  a subsidy  for  children  of parents  who                                                                    
     work in the child care sector.                                                                                             
     Changes to the Child  Care Grant Program include adding                                                                    
     requirements   for  Child   Care  Grant   providers  to                                                                    
     prioritize  children participating  in  the child  care                                                                    
     assistance  program when  filling available  child care                                                                    
     spaces.                                                                                                                    
     It also  establishes the ability for  the department to                                                                    
     provide grants  to high  quality child  care facilities                                                                    
     in  the state  using quality  recognition measures  and                                                                    
     prohibits  grant-funded  child   care  facilities  from                                                                    
     denying admission based  on disability or socioeconomic                                                                    
     status.                                                                                                                    
     This bill  maintains the technical changes  from SB 189                                                                    
     that include updating  terminology in statute, removing                                                                    
     the  reference  to "day  care"  and  replacing it  with                                                                    
     child  care,  as well  as  amending  the definition  of                                                                    
     "child care facility."                                                                                                     
     Although HB 190 does not  include some elements from SB
,   it  does   not  prevent   the  department   from                                                                    
     addressing them through regulatory changes.                                                                                
     HB 190 does not include  4 elements from SB 189 because                                                                    
     the  department  can  make these  changes  through  the                                                                    
     regulatory process. Sections removed include:                                                                              
          The  expansion of  family  income eligibility  for                                                                    
     the  Child  Care  Assistance Program  to  105%  of  the                                                                    
     state's  median  monthly   household  income,  and  the                                                                    
     establishment of a program  to incentivize employers to                                                                    
     develop  child  care  programs  on  site,  or  near-by.                                                                    
     Funding  for these  two sections  was  included in  the                                                                    
     Governor's proposed budget.                                                                                                
          It  also removes  the requirement  for Child  Care                                                                    
     providers  to be  designated as  a  quality child  care                                                                    
     facility  in order  to receive  the  child care  grant.                                                                    
     This  designation  is  already  built  in  through  the                                                                    
     licensing process  and child care facilities  can reach                                                                    
     levels  in  the  already  established  Learn  and  Grow                                                                    
     system.                                                                                                                    
          And finally, this bill  removes the requirement to                                                                    
     cap family contributions or co-pays  at 7% because this                                                                    
     has  become  a  federal  requirement,  so  a  statutory                                                                    
     change is not needed.                                                                                                      
                                                                                                                                
9:05:50 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  HIMSCHOOT asked  the invited  testifiers  if they  have                                                               
permission  to be  in the  capitol  building and  asked what  the                                                               
"missing" pieces  of the senate  companion bill (SB 189)  were in                                                               
HB 190.                                                                                                                         
                                                                                                                                
MS.  VAN KIRK  confirmed that  she had  permission to  attend the                                                               
current  committee meeting  and explained  that the  exapnsion of                                                               
the  family  income eligibility  to  105%  of the  Alaska  median                                                               
income, incentives  for the establishment  of an  onsite employer                                                               
childcare service,  and a  7% cap on  insurance copay,  which was                                                               
already addressed by federal law.                                                                                               
                                                                                                                                
9:09:17 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  STORY   opened  public  testimony  on   HB  190.  After                                                               
ascertaining that  there was  no one who  wished to  testify, she                                                               
closed public testimony.                                                                                                        
                                                                                                                                
9:09:42 AM                                                                                                                    
                                                                                                                                
CO-CHAIR STORY announced that HB 190 would be held over.                                                                        
                                                                                                                                
9:10:33 AM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Education Standing Committee meeting was adjourned at 9:10 a.m.