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