Legislature(2025 - 2026)BELTZ 105 (TSBldg)
03/14/2025 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SB89 | |
| SB96 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 89 | TELECONFERENCED | |
| *+ | SB 96 | TELECONFERENCED | |
SB 96-CHILD CARE: TAX CREDITS
2:23:56 PM
CHAIR BJORKMAN reconvened the meeting and announced the
consideration of SENATE BILL NO. 96 "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; 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."
2:24:22 PM
SONJA KAWASAKI, Professional Assistant, Senate Majority Counsel,
Juneau, Alaska, explained legal counsel's position on SB 96 and
stated that in November, a lawsuit was filed challenging Senate
Bill 189, claiming it violated art. II, sec. 15, Constitution of
the State of Alaska, which requires each bill to address a
single subject. This rule helps prevent unrelated issues from
being bundled together in one bill. Senate Bill 189 included
several topics, including a provision for childcare tax credits.
She said to protect that childcare program from being struck
down by the lawsuit, lawmakers are now proposing new legislation
that re-enacts just the childcare tax credit portion. This
ensures the program can continue, even if the court rules
against Senate Bill 189. The lawsuit is still ongoing. The state
responded to the complaint in January, and the plaintiff
recently filed a motion for summary judgment. A court decision
could come based on the legal arguments alone, without a full
trial.
2:26:36 PM
SENATOR DUNBAR asked whether passing the component bills
unamended in the same form as last year strengthens the argument
for mootness.
2:26:57 PM
MS. KAWASAKI answered the strongest approach is for the
legislature to pass new legislation that closely mirrors the
original components. This helps avoid any need for the court or
parties to evaluate whether changes in the new bill are
significant or alter the substance of the original law.
2:27:37 PM
SENATOR DUNBAR agreed with Ms. Kawasaki's analysis of SB 96.
2:28:34 PM
REPRESENTATIVE ZACK FIELDS, District 17, Alaska State
Legislature, Juneau, Alaska, provided a history of SB 96 and
said the current legislation was part of Senate Bill 189 and
part of House Bill 89 of the last legislature. He said the
childcare tax credit is a key tool to help expand and stabilize
childcare in Alaska. Passing SB 96 now would give businesses the
financial and regulatory certainty they need to move forward
with plans to increase childcare availability. Some businesses
are already exploring how to use the childcare credit. He said
while, the legislature could wait for the court to decide on the
lawsuit involving the original bill, acting now ensures the
program moves forward, regardless of the legal outcome. These
childcare provisions were developed over four years and were
thoroughly reviewed. They're based on best practices from across
the country and shaped by input from childcare experts, business
leaders, and hundreds of Alaskans through planning sessions and
the state's childcare task force.
2:31:18 PM
CHAIR BJORKMAN asked for an explanation on how the childcare tax
credit works.
2:31:23 PM
REPRESENTATIVE FIELDS responded that for businesses that pay
state income taxes, SB 96 offers a 50 percent tax credit if that
business provides childcare support, like giving employees a
stipend to help pay for childcare, the business can get half of
that amount back as a tax credit. If a business decides to build
or expand a childcare facility at their workplace, those costs
can also be deducted. He said the credit is flexible, allowing
companies to support childcare in different ways. It's part of
Alaska's existing education tax credit program, which many
businesses already use. He stated that SB 96 doesn't cost the
state much, but it can have a big impact by encouraging more
childcare options across the state.
2:32:47 PM
EVAN ANDERSON, Staff, Representative Zack Fields, Alaska State
Legislature, Juneau, Alaska, provided the sectional analysis for
SB 96:
[Original punctuation provided.]
Sectional Analysis
SB 96,Version A
Sec. 1. AS 21.96.070(a): Adds a child care tax credit
to the insurance business tax statutes, allowing for
deductions for contributions of cash or equipment to
operate a child care facility, and payments to the
employees of a taxpayer for offsetting their child
care costs.
Sec. 2. AS 21.96.070(i): Adds a new subsection
adjusting the dollar limit on tax credits for
inflation, beginning on January 1, 2030, and every 5
years afterwards.
Sec. 3. AS 43.20.014(a): Adds a child care tax credit
to the corporate net income tax statutes, allowing for
deductions for contributions of cash or equipment to
operate a child care facility, and payments to the
employees of a taxpayer for offsetting their child
care costs.
Sec. 4. AS 43.20.014(i): Adds a new subsection
adjusting the dollar limit on tax credits for
inflation, beginning on January 1, 2030, and every 5
years afterwards.
Sec. 5. AS 43.55.019(a): Adds a child care tax credit
to the oil and gas production tax statutes, allowing
for deductions for contributions of cash or equipment
to operate a child care facility, and payments to the
employees of a taxpayer for offsetting their child
care costs.
Sec. 6. AS 43.55.019(j): Adds a new subsection
adjusting the dollar limit on tax credits for
inflation, beginning on January 1, 2030, and every 5
years afterwards.
2:33:46 PM
MR. ANDERSON continued with the section analysis for SB 96:
Sec. 7. AS 43.56.018(a): Adds a child care tax credit
to the oil and gas exploration, production, and
pipeline transportation property tax statutes,
allowing for deductions for contributions of cash or
equipment to operate a child care facility, and
payments to the employees of a taxpayer for offsetting
their child care costs.
Sec. 8. AS 43.56.018(i): Adds a new subsection
adjusting the dollar limit on tax credits for
inflation, beginning on January 1, 2030, and every 5
years afterwards.
Sec. 9. AS 43.65.018(a): Adds a child care tax credit
to the mining business tax statutes, allowing for
deductions for contributions of cash or equipment to
operate a child care facility, and payments to the
employees of a taxpayer for offsetting their child
care costs.
Sec. 10. AS 43.65.018(i): Adds a new subsection
adjusting the dollar limit on tax credits for
inflation, beginning on January 1, 2030, and every 5
years afterwards.
Sec. 11. AS 43.75.018(a): Adds a child care tax credit
to the fisheries tax statutes, allowing for deductions
for contributions of cash or equipment to operate a
child care facility, and payments to the employees of
a taxpayer for offsetting their child care costs.
Created by Rep. Fields office relating to child care
tax credits
Sec. 12. AS 43.75.018(i): Adds a new subsection
adjusting the dollar limit on tax credits for
inflation, beginning on January 1, 2030, and every 5
years afterwards.
Sec. 13. AS 43.77.045(a): Adds a child care tax credit
to the floating fisheries business tax statutes,
allowing for deductions for contributions of cash or
equipment to operate a child care facility, and
payments to the employees of a taxpayer for offsetting
their child care costs.
Sec. 14. AS 43.77.045(i): Adds a new subsection
adjusting the dollar limit on tax credits for
inflation, beginning on January 1, 2030, and every 5
years afterwards.
2:34:53 PM
MR. ANDERSON continued with the section analysis for SB 96:
Sec. 15. Repeals the provisions of HB 189 from the
33rd Session that are identical to the provisions
contained in SB 96.
Sec. 16. Adds new language in uncodified law to set a
retroactive effective date to July 23, 2024.
Sec. 17. Repeals the provisions of HB 189 from the
33rd Session that are identical to the provisions
contained in SB 96.
Sec. 18. This is a conforming change to sunset the
provisions of this bill on January 1, 2028.
Sec. 19. Sets an immediate effective date.
2:35:47 PM
CHAIR BJORKMAN announced invited testimony on SB 96.
2:35:57 PM
KATI CAPOZZI, President, Alaska Chamber of Commerce, Anchorage,
Alaska, testified by invitation on SB 96 and stated that she was
asked to speak about the business community's continued need for
accessible childcare. People often ask why the Alaska Chamber
cares about this issue and the answer is simple: Alaska's
economy depends on a strong, stable workforce. She said a major
barrier to that is the lack of affordable, accessible childcare.
Around 50,000 working-age Alaskans rely on childcare to stay in
the workforce, yet many providers have shut down since 2020, and
staffing shortages continue. One in five licensed providers has
closed. As a result, businesses across the state are struggling
to hire and keep workers because parents can't find or afford
childcare. She stated that when parents can't work, businesses
lose productivity and it's costing Alaska's economy at least
$165 million a year. This especially affects working women, many
of whom have had to cut back hours or leave jobs entirely. She
referenced a survey conducted last year by the chamber, 19
percent of parents missed work, and 12 percent said they chose
not to work, due to childcare challenges. She said childcare in
Alaska is also among the most expensive in the U.S., with infant
care averaging $21,000 a year. That's a huge burden for
families. SB 96 helps by giving tax-paying businesses the option
to support childcare for their employees or even help create new
childcare spaces in their communities. She emphasized this is
one step in a broader solution to improve access and
affordability of childcare for all Alaskans.
2:40:10 PM
CHAIR BJORKMAN held SB 96 in committee.