The bill HB358 introduces new tax incentives in Alabama to enhance childcare access and quality, thereby promoting workforce participation. Key provisions include an employer tax credit that allows businesses to claim 75% of eligible childcare-related expenses, with small businesses receiving a 100% credit. Additionally, a childcare provider tax credit is established, which ranges from $1,000 to $2,000 per eligible child based on the facility's quality rating, capped at $5 million annually for all providers. The bill also creates a nonprofit childcare provider grant program, allowing grants of up to $50,000 per provider, with a total cap of $5 million per year. The Department of Revenue is tasked with creating a standardized application process for these credits and grants, and documentation is required to substantiate claims. The legislation emphasizes the importance of high-quality childcare and aims to address barriers to workforce participation, particularly for working parents. It mandates that at least 25% of funds for tax credits and grants be reserved for rural providers and establishes a Childcare Tax Credit Account within the Education Trust Fund to manage refunds. The bill also ensures that the new tax credits do not adversely affect the Alabama Special Mental Health Trust Fund and requires all applications to be submitted using forms adopted by the relevant departments. The act is set to take effect on January 1, 2025, following its passage in both the House and Senate in 2024.