SB 95-CHILD CARE: ASSISTANCE/GRANTS    4:39:39 PM  CHAIR DUNBAR announced the consideration of SENATE BILL NO. 95 "An Act relating to the child care assistance program and the child care grant program; and providing for an effective date." 4:40:26 PM SONJA KAWASAKI, Senate Majority Legal Council, Alaska State Legislature, Juneau, Alaska, presented an overview of SB 95 and offered advice. She stated that the legislation would reenact certain provisions of Senate Bill 189 (2024) related to child care assistance, providing a procedural fix to ensure the program remains in effect regardless of a pending lawsuit. The lawsuit challenges Senate Bill 189 under Alaska's single-subject rule, art. II, sec. 13, Constitution of the State of Alaska, but reenacting the provisions would give the child care assistance program a separate statutory existence and could render the lawsuit moot. The case is currently in motion, with the plaintiff having filed for summary judgment and the court awaiting a response. CHAIR DUNBAR asked if the committee passes SB 95 without amendments, will it strengthen the case for mootness, and would amending it weaken that effort. 4:42:55 PM MS. KAWASAKI replied that enacting SB 95 in the same form as the relevant parts of Senate Bill 189 would allow the lawsuit parties to present clear arguments and enable the court to more efficiently determine mootness. 4:43:22 PM SENATOR HUGHES asked whether alternating between "child care" and "day care" in SB 95 creates any issues or affect the lawsuit. 4:43:45 PM MS. KAWAKSAI deferred the question to Mr. Anderson. 4:43:54 PM EVAN ANDERSON, Staff, Representative Zack Fields, Alaska State Legislature, Juneau, Alaska, answered questions and provided a sectional analysis for SB 95. He replied that the bill intentionally reenacts former statutes, alternating between "day care" and "child care," as a repeated mechanism to implement the legislative changes. 4:44:35 PM SENATOR HUGHES asked if the definition of child care in SB 95, Section 28, is narrow enough. 4:45:15 PM SENATOR TOBIN stated that a previously released legal memo helped clarify the definition of child care, though it may not be included in the current bill packet. 4:45:38 PM SENATOR HUGHES asked if the definition was adequate. 4:45:44 PM SENATOR TOBIN replied in the affirmation. 4:46:05 PM MR. ANDERSON paraphrased the sectional analysis for SB 95: [Original punctuation provided.] Section 1. Amends AS 47.05.030(a). This is a conforming change. Section 2. Amends AS 47.05.030(a). Corrects the terminology in existing statute from "day care" to "child care." Section 3. Amends AS 47.05.085(a). This is a conforming change. Section 4. Amends AS 47.05.085(a). Corrects the terminology in existing statute from "day care" to "child care." Section 5. Amends AS 47.25.001(a). This is a conforming change. Section 6. Amends AS 47.25.001(a). Changes the maximum monthly household income for eligibility to 105 percent of the Alaska Median Income, adjusted for family size. Also replaces "day care" with "child care." Section 7. Amends AS 47.25.011. This is a conforming change. Section 8. Amends AS 47.25.011. Corrects the terminology in existing statute from "day care" to "child care." Section 9. Amends AS 47.25.021. This is a conforming change. Section 10. Amends AS 47.25.021. Corrects the terminology in existing statute from "day care" to "child care." Section 11. Amends AS 47.25.031. This is a conforming change. Section 12. Amends AS 47.25.031. Corrects the terminology in existing statute from "day care" to "child care." Section 13. Amends AS 47.25.041. This is a conforming change. 4:47:04 PM MR. ANDERSON continued with the sectional analysis for SB 95: Section 14. Amends AS 47.25.041. Establishes that the parent or guardian contribution rate for child care shall not exceed 7 percent of the family monthly income. Section 15. Amends AS 47.25.051(a). This is a conforming change. Section 16. Amends AS 47.25.051(b). Corrects the terminology in existing statute from "day care" to "child care." Section 17. Amends AS 47.25.071(b). This is a conforming change. Section 18. Amends AS 47.25.071(b). Corrects the terminology in existing statute from "day care" to "child care." Section 19. Amends AS 47.25.051. Requires the Department to procure a cost-of-care study to set subsidy rates. Section 20. Amends AS 47.25.071(b). This is a conforming change. Section 21. Amends AS 47.25.071(b). Sets a designation as a "quality child care facility" as the minimum standard for the Department to issue grants. Also corrects the terminology in existing statute from "day care" to "child care." Section 22. Amends AS 47.25.071(g). This is a conforming change Section 23. Amends AS 47.25.071(g). Requires prioritization of children from low-income families when filling available spaces in the facility. Section 24. Amends AS 47.25.071(h). This is a conforming change Section 25. Amends AS 47.25.071(h). Directs the department to promulgate regulations for criteria used to designate a facility as "quality." 4:48:19 PM MR. ANDERSON continued with the sectional analysis for SB 95: Section 26. Amends AS 47.25.071. Allows the Department to provide grants to the highest-performing and highest-quality child care facilities in the state, and prohibits a child care facility receiving state grants from denying a child acceptance based on disability or socioeconomic status. Section 27. Amends AS 47.25.095(2). This is a conforming change. Section 28. Amends AS 47.25.095(2). Adds a definition of "child care." Section 29. Amends AS 47.25.095(3). Updates the definition of "child care facility" to include "day care. Section 30. Amends AS 47.25.095(3). Updates the definition of "child care facility" to include establishments recognized by the federal government for the care of children. Section 31. Amends AS 47.25.095. This is a conforming change. Section 32. Repeals Section 31. This is a conforming change Section 33. This is a conforming change. Section 34. Repeals uncodified law associated with the passage of SB 189 from the 33rd Session. This is a conforming change. Section 35. Codifies that the Department shall receive federal approval for the state plan for the child care assistance program. Section 36. Sets a retroactive effective date to July 23, 2024. Section 37. Sets an effective date for Section 6 as January 1, 2026, pending approval by the U.S. Department of Health and Human Services. Section 39. All other sections of the bill take effect immediately. 4:49:31 PM STEPHANIE BERGLUND, Chief Executive Officer (CEO), Thread, Anchorage, Alaska, testified by invitation on SB 95 and read the following: [Original punctuation provided.] Thank you Mr. Chair and members of the committee for hearing SB 95. My name is Stephanie Berglund, CEO of Thread- Alaska's Child Care Resource and Referral organization. Thread is a 39-year-old nonprofit, providing services statewide to strengthen access to affordable and high- quality early childhood education, with focus on child care. We serve more than 10,000 families, 2,000 early educators, and over 400 early childhood education programs each year. 4:49:57 PM MS. BERGLUND continued with her testimony of SB 95: Today I am testifying on behalf of Thread but want to share that we are also proud members of the Alaska Early Childhood Advocacy Group in support of SB 95. The Alaska Early Childhood Advocacy Group is a group of nine non-profits from across the state that have joined together to advocate for increased investment and improved policies to support Alaska's children and families. The child care sector is fragile. It's long been a sector with institutional deficiencies- for decades but has seen increased challenges over the last five years. Since 2020, we have seen over 25 percent of the licensed child care programs close across the state and of those that are open, they are not able to serve all the children they would like due to staff shortages. Thread anticipates more child care programs closing if we do not see sustainable and meaningful investment from the state for child care. The child care workforce is struggling due to low wages and few benefits at the same time when there is high competition for qualified workers in Alaska. Currently, fewer families can access affordable and quality child care services than ever before. When we don't have a strong child care sector, we see our economic infrastructure struggle. Businesses are not able to recruit and retain quality employees and families are not able to participate in the workforce as they want. Our most recent research and data conducted in partnership with the Alaska Chamber and the Mckinley Group has shown that businesses are greatly impacted by families struggling with child care- including poor attendance and loss in productivity. Child care challenges for working families resulting in absences and employee turnover cost businesses an estimated $152M/annually. When Alaskans can't work, they don't have the financial security to support their families, they aren't able to achieve their self-sufficiency goals and aren't able to contribute to the economy. This not only stifles the quality of life for families, but this also stalls Alaska's growth. 4:51:51 PM MS. BERGLUND continued with her testimony of SB 95: SB95 adds needed support for child care and strengthens the child care assistance and subsidy programs. While there are many areas of the child care system that need support, SB95 aims to strengthen child care assistance by allowing more families (earning up to the 105 percent of median household income) to participate in the program and creating flexibility in child care resources with aim to support child care programs with the targeted supports they need. Changes in child care assistance are needed. Currently, too few families participate in the program as they don't qualify or can't access resources under the current structure. Families utilizing child care assistance pay a co-pay for services in addition to the cost differential of tuition fees. These and other barriers are impacting family's ability to participate in the workforce. Just over half of families (51 percent) report that household members' ability to be employed or work more hours was impacted by quality, availability, or cost of child care. This is a large change from the same survey conducted in 2019, where only 22 percent of families surveyed reported that child care barriers are impacting their ability to be employed or work as much as they would like. This is a 29 percent increase in families not able to work due to child care. These findings underscore the need for child care change to strengthen our collective workforce and economy. This bill would also create a program to partner with businesses to create incentives and support them with developing onsite or near site child care. 4:53:18 PM MS. BERGLUND continued with her testimony of SB 95: [Original punctuation provided.] One lever of change is through SB95 and increasing Child Care Assistance access and capping copayments required for families. This bill will allow more families to qualify and thus allow more families access to quality child care. Additionally, child care businesses are currently reimbursed at child care assistance program rates set by a market rate survey that is based on the amount child care businesses charge for care, not what it actually costs to provide quality care and education. This creates an unstable foundation for the child care system. Thread encourages policy makers to keep moving toward the true cost of care to be used in conjunction with market rate prices in policy and fiscal planning for child care supports. Considering the true cost of providing child care in our policies will inform a more stable child care system. SB95 is a great and necessary step for supporting family's affordability. Thread is endorsing SB95 as it is a key step toward more affordable access to care for families. Thread encourages legislators to consider and pass this bill this session as it was already passed with strong support last session. This positive change for the child care sector cannot come soon enough. I appreciate the sponsor for bringing this bill forward and thank the chair and committee for considering this bill. Thank you for the opportunity to testify and thank you for your time and support for the young children and families in Alaska. 4:54:58 PM JEN GRIFFIS, Vice President, Policy and Advocacy, Alaska's Children Trust, Anchorage, Alaska, testified by invitation on SB 95. She read the following: [Original punctuation provided.] As the statewide lead organization focused on the prevention of child abuse and neglect, ACT supports policies that increase economic security for families and provide foundational early education support for children. Senate Bill 95 does both by increasing access to quality, affordable child care for Alaska's families. As you know, the policies in SB95 were originally found in HB89, which passed the legislature last May as part of SB189. My task today is to walk the committee through the legislative process of this bill over the past two years. Early childhood advocates, including the nine member organizations of the Alaska Early Childhood Advocacy Group, as well as representatives from the business community and the administration, worked closely with legislators on the development and passage of HB89 during the last legislative session. HB89 was sponsored by Rep. Julie Coulombe and had 15 co-sponsors, including members from both the majority and minority caucuses. It also had the strong support of advocates including Alaska Children's Trust, thread, Alaska Chamber of Commerce and child care and after school providers from across the state. The bill had two hearings in the House Health and Social Services committee in March and April of 2023 and was moved out of committee with unanimous Do Pass recommendations. It received one hearing in House Finance before the end of the session. The sponsor met with the administration and advocates during the interim and information from those meetings was incorporated into an updated version of the legislation which was introduced in House Finance at the beginning of the 2024 session. 4:56:38 PM MS. GRIFFIS continued with her testimony of SB 95: In January and February of 2024 the legislation, the legislation was heard in House Finance where it passed out of committee, where it quickly moved to the House floor and passed the House 35 to 5 on February 28, 2024. After being introduced in the Senate, the legislation was heard in Senate Health and Social Services three times in March and April where it received some amendments before being moved out of committee. The bill was then referred to Senate Finance, where it received one hearing. On the final day of the session May 15 2024 the language from HB89 was amended into SB189 on the floor of the House. This bill passed the House 33 to 7, was transmitted to the Senate and passed the Senate 17 to 3. It was not vetoed by the Governor and became law on October 9, 2024. The funding in the fiscal note was included in the Governor's budget that was released in December 2024. Alaska Children's Trust, along with our partner organizations in the Alaska Early Childhood Advocacy Group, remain supportive of the policies of HB89 which are now represented in SB95. We appreciate the opportunity to share more about this legislation and are happy to answer any questions. 4:58:10 PM CHAIR DUNBAR held SB 95 in committee.