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." SENATE BILL NO. 96 "An Act relating to education tax credits for certain payments and contributions for child care and child care facilities; relating to the insurance tax education credit, the income tax education credit, the oil or gas producer education credit, the property tax education credit, the mining business education credit, the fisheries business education credit, and the fisheries resource landing tax education credit; providing for an effective date by amending the effective date of secs. 1, 2, and 21, ch. 61, SLA 2014; and providing for an effective date." SENATE BILL NO. 97 "An Act establishing a big game guide concession area permit program on land in the state; relating to the duties of the Big Game Commercial Services Board, the Board of Game, the Department of Fish and Game, and the Department of Natural Resources; requiring the Board of Game to establish an initial big game guide concession area; and providing for an effective date." 9:05:01 AM MEGAN WALLACE, CHIEF COUNSEL, LEGISLATIVE LEGAL SERVICES (via teleconference), affirmed that the three bills on the agenda were related to the passage of SB 189, which had passed the previous session and was enacted into law. She continued that the three bills together, in addition to the contents of SB 80, were contained in SB 189 last session. Ms. Wallace informed that an issue had arisen under Article 2 Section 13, which required bills to be combined to a single subject. She said that SB 189 has been challenged under the single subject rule. She referenced a lawsuit filed in the Juneau Superior Court (copy on file) regarding an alleged constitutional violation, that SB 189 violated the single-subject clause because there was no single subject to describe the contents of the bill after the various components had been added at the end of last session. Ms. Wallace relayed that the status of the pending litigation was that the plaintiff, former Representative David Eastman, had filed a motion for summary judgement asking the court to invalidate the passage of SB 189. In response the state had filed a motion for a stay of proceedings until the end of session to allow the legislature to pass curative legislation. The motion asked that the court give the legislature time to hear the alleged defects. The plaintiff had opposed the motion and requested oral argument on the motion to stay. There had not been a ruling on the motion to stay. 9:08:31 AM Ms. Wallace explained that the passage of the bills, irrespective of pending litigation, would ensure that if the litigation was successful, once the bills were passed there would be no impact to the law previously passed by the legislature. If the curative legislation was not passed, there was some risk that if the court struck down the passage of SB 189, all provisions of the bill would be struck down and the legislature would have to bring the impacted items back to the table. 9:09:55 AM Senator Kiehl expressed an appreciation for the briefing. He relayed that his work in committee would reflect the merits of the legislation and not the reason that the items were back before the committee. SENATE BILL NO. 96 "An Act relating to education tax credits for certain payments and contributions for child care and child care facilities; relating to the insurance tax education credit, the income tax education credit, the oil or gas producer education credit, the property tax education credit, the mining business education credit, the fisheries business education credit, and the fisheries resource landing tax education credit; providing for an effective date by amending the effective date of secs. 1, 2, and 21, ch. 61, SLA 2014; and providing for an effective date." 9:59:42 AM Co-Chair Hoffman announced that this was the first hearing on the legislation. 10:00:01 AM Ms. Kawasaki relayed that supporters of SB 96 described the bill as a workforce bill that strengthened Alaskas childcare system. The bill would incentivize the private sector to offer childcare benefits to their employees to fill jobs essential for economic growth. The bill would expand childcare tax credits that would create a tax credit for employers. The credits would be available to seven categories to be claimed against taxes to the state, which included: insurance premium tax, title insurance premium tax, oil and gas production tax, oil and gas property tax, mining license tax, fisheries business tax, and fisheries resource landing tax. The bill encouraged employers to look at childcare as an employee benefit and encouraged businesses to open childcare services. 10:01:48 AM Co-Chair Stedman asked Ms. Kawasaki to provide more detail as to how the credits would work, and whether there were any restrictions. Ms. Kawasaki relayed that if one was not in one of the aforementioned tax collection categories incentivization would be based on whoever was currently paying taxes. Co-Chair Stedman thought there were a lot of other employers, outside the categories, that could use motivation to assist with employee childcare. He stressed that childcare assistance was a recurring concern voiced by Alaskans. 10:03:51 AM KATIE CAPOZZI, PRESIDENT AND CHIEF EXECUTIVE OFFICER, ALASKA CHAMBER OF COMMERCE, introduced herself and relayed that the mission of the Alaska Chamber of Commerce. She testified in support of the legislation. She asserted that the state's economy depended upon a strong stable workforce, and the lack of affordable and accessible childcare hindered workforce participation. She mentioned employers struggled to recruit and retain employees due to unaffordability and unavailability of childcare. She spoke of the cost to the state, $165 million per year, due to childcare related absences and employee turnover. Ms. Capozzi referenced a public opinion survey by the chamber the previous month and cited that 24 percent of parents missed work due to lack of access to childcare, and 13 percent chose not to work oat all due to lack of access or affordability. She noted that the average cost of full- time care for an infant was $21,000 per year. SB 96 would add an additional mechanism to the existing education tax credits and would not increase the tax cap. It would allow corporate income tax paying employers the opportunity to provide childcare benefits to their employees, provide direct support to childcare facilities, or use the credit for onsite childcare. Ms. Capozzi referenced Co-Chair Stedman's question related to who could benefit from the credits. She said that if an employer used the credit for an onsite, or near-site, facility it could be used by other community members and increase access to childcare for all. Ms. Capozzi addressed a concern with the sunset provision of 2028. The tax credits were used by the chamber to invest in the University of Alaska and a multitude of workforce development programs. 10:07:36 AM Co-Chair Stedman mentioned the oil and gas severance tax. He asked how the tax worked for support companies that employed truck drivers, construction workers. He asked whether those satellite companies, who supported the work of the oil and gas industry, would qualify for the credit. Ms. Capozzi relayed that if they paid corporate income tax, they would qualify for the credit. Co-Chair Hoffman noted that a representative from the Department of Revenue was available for questions. Co-Chair Stedman wanted to hear from the department. He worried that those support companies might be excluded from the credits. 10:08:54 AM BRANDON SPANOS, DEPUTY DIRECTOR, TAX DIVISION, DEPARTMENT OF REVENUE (via teleconference), addressed whether a trucking company would be subject to the tax credits, and relayed that it would depend on how the company was structured and whether they paid one of the taxes that could claim the credit. Co-Chair Stedman thought most of the support companies would not qualify for the credits because they were not C- Corps. He asked whether the processors and the fishermen would both benefit from the landing tax. Mr. Spanos relayed that the taxes applied to the processers. Co-Chair Stedman asked for further clarification. Mr. Spanos relayed that the Fishing Business Tax was by the fishing processing entity. The Fishing Landing Tax was paid by the exporter. Co-Chair Stedman asked whether fishermen would not qualify. Mr. Spanos relayed that fishermen did not pay the tax. Co-Chair Hoffman relayed that there were other people from the administration available for questions. 10:12:34 AM Co-Chair Hoffman OPENED public testimony. 10:12:52 AM STEPHANIE BERGLUND, CHIEF EXECUTIVE OFFICER, THREAD ALASKA, ANCHORAGE (via teleconference), spoke in support of the bill. 10:16:16 AM Co-Chair Hoffman CLOSED public testimony. 10:16:32 AM Senator Kiehl reviewed three fiscal notes. He addressed FN 1, from Department of Labor and Workforce Development, OMB component 336. The note contained zero fiscal impact. Senator Kiehl addressed FN 2, from the Department of Revenue, OMB component 2476. The note reflected zero cost and indeterminate incr4ease in revenue in FY29 and FY29. Senator Kiehl addressed FN 3, from the Department of Community, Commerce, and Economic Development, OMB component 354. The note reflected zero fiscal impact. Co-Chair Hoffman relayed that the three fiscal notes would be considered by the Conference Committee on the Operating and Capital Budgets. SB 96 was HEARD and HELD in committee for further consideration.