Legislature(2023 - 2024)SENATE FINANCE 532

04/23/2024 09:00 AM Senate FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 131 ASIAN AMERICAN/PACIFIC ISLANDER PROGRAM TELECONFERENCED
Heard & Held
-- Invited & Public Testimony --
-- <Time Limit May Be Set> --
+ HB 89 CHILD CARE: TAX CREDITS/ASSISTANCE/GRANTS TELECONFERENCED
Heard & Held
-- Testimony <Invitation Only> --
+ Bills Previously Heard/Scheduled 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.                                                                                         

Document Name Date/Time Subjects
SB 131 Sectional Analysis ver A.pdf SFIN 4/23/2024 9:00:00 AM
SSTA 2/8/2024 3:30:00 PM
SB 131
SB 131 Sponsor Statement ver A.pdf SFIN 4/23/2024 9:00:00 AM
SSTA 2/8/2024 3:30:00 PM
SB 131
SB 131 Letters of Support.pdf SFIN 4/23/2024 9:00:00 AM
SB 131
HB 89 LOS Allmeroth.pdf SFIN 4/23/2024 9:00:00 AM
SHSS 4/11/2024 3:30:00 PM
HB 89
HB 89 Legal Memo to Dunbar.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
HB 89 Legal Memo.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
HB 89 Letter of Support - ACT.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
HB 89 Letter of Support- Fairbanks Chamber.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
HB 89 Letter of Support -Thread.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
HB 89 News Story-ADN Article 2.09.24.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
HB 89 Public Testimony.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
HB 89 Support Amer Heart Assoc.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
HB 89 Support Letter ANDSVA.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
HB 89 Support Letter Rabbi Goodstein.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
HB 89 Support Letter-Recieved as of 2.16.2024.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
HB 89 TFCC-Recommendations.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
HB 89 CSHB89 Summary of Changes ver. R 4.23.24.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
HB 89 SCSHB89(HSS) Sponsor Statement - 4.23.24.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
HB 89 SCS CSHB 89(HSS) Sectional Analysis 4.23.24.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
HB 89 Presentation 4.23.24.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
SB 131 Korean Consulate Testimony.pdf SFIN 4/23/2024 9:00:00 AM
SB 131
HB 89 - Supporting Doc - CU1 Letter 4.22.24.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
SB 131 Support Izard.pdf SFIN 4/23/2024 9:00:00 AM
SB 131
HB 89 Child Care Funding Sign On Letter April 2024.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
HB 89 thread HB89 Testimony- Senate Finance 4.23.24 Final.pdf SFIN 4/23/2024 9:00:00 AM
HB 89
SB 131 AK AAPI SB 131 Letter of Support.pdf SFIN 4/23/2024 9:00:00 AM
SB 131
SB 131 Letter of Support for SB 131 Fillipino Community.pdf SFIN 4/23/2024 9:00:00 AM
SB 131