Bill Summary – FastDemocracy

State of Alaska
                                                            Fiscal Note
                                                                                                Bill Version:                     CSHB 89(FIN)
 2024 Legislative Session
                                                                                                Fiscal Note Number:               3
                                                                                                (H) Publish Date:                 2/12/2024
 Identifier:        HB089CS(FIN)-DOR-TAX-02-09-24                                 Department:       Department of Revenue
 Title:             DAY CARE ASSIST./CHILD CARE GRANT                             Appropriation: Taxation and Treasury
                    PROGRAM                                                       Allocation:       Tax Division
 Sponsor:           COULOMBE                                                      OMB Component Number:                2476
 Requester: (H) Finance
 Expenditures/Revenues
 Note: Amounts do not include inflation unless otherwise noted below.                                                                   (Thousands of Dollars)
                                                 Included in
                                    FY2025       Governor's
                                Appropriation      FY2025                                              Out-Year Cost Estimates
                                  Requested       Request
 OPERATING EXPENDITURES               FY 2025        FY 2025       FY 2026                        FY 2027             FY 2028           FY 2029       FY 2030
 Personal Services
 Travel
 Services
 Commodities
 Capital Outlay
 Grants & Benefits
 Miscellaneous
 Total Operating                            0.0           0.0          0.0                              0.0                0.0               0.0            0.0
 Fund Source (Operating Only)
 None
 Total                                            0.0              0.0                 0.0              0.0                0.0               0.0            0.0
 Positions
 Full-time
 Part-time
 Temporary
 Change in Revenues
 1004 Gen Fund (UGF)                       (4,800.0)                          (4,800.0)          (4,800.0)            (2,300.0)
 Total                                     (4,800.0)               0.0        (4,800.0)          (4,800.0)            (2,300.0)              0.0            0.0
 Estimated SUPPLEMENTAL (FY2024) cost:                                      0.0              (separate supplemental appropriation required)
 Estimated CAPITAL (FY2025) cost:                                           0.0              (separate capital appropriation required)
 Does the bill create or modify a new fund or account?       No
 (Supplemental/Capital/New Fund - discuss reasons and fund source(s) in analysis section)
 ASSOCIATED REGULATIONS
 Does the bill direct, or will the bill result in, regulation changes adopted by your agency?                   No
 If yes, by what date are the regulations to be adopted, amended or repealed?                                   N/A
 Why this fiscal note differs from previous version/comments:
 Updated from SLA2023 to SLA2024 fiscal note template. Fiscal analysis was updated based on CS (H.FIN) that changed the effective
 date.
 Prepared By:             Michael Williams, Acting Deputy Director                                                      Phone:        (907)269-6632
 Division:                Tax Division                                                                                  Date:         02/09/2024 11:15 AM
 Approved By:             Eric DeMoulin, Administrative Services Director                                               Date:
                                                                                                                                OUT OF02/09/24
 Agency:                  Department of Revenue                                                                       REPORTED
Printed 2/12/2024                                                        Page 1 of 2                                   HFC 02/09/2 024
                                                                                                                                Control Code: dPDgm
                                                                                                             CSHB 89(FIN) - Fiscal Note 3
                                                  FISCAL NOTE ANALYSIS
STATE OF ALASKA                                                                     BILL NO. CSHB 89(FIN)
2024 LEGISLATIVE SESSION
Analysis
   Background
   The education tax credit is a credit for qualifying contributions to Alaska universities and accredited nonprofit Alaska two‐
   or four‐year colleges for facilities, direct instruction, research and educational support purposes; donations to a school
   district or a state‐ or regional‐operated technical and training school for vocational education courses, programs and
   facilities; and donations for Alaska Native cultural or heritage programs for public school staff and students; and a facility in
   the state that qualifies as a coastal ecosystem learning center under the Coastal American Partnership.
   The credit is available to be claimed against insurance premiums tax, title insurance premiums tax, corporate income tax,
   oil and gas production tax, oil and gas property tax, mining license tax, fisheries business tax, and fishery resource landing
   tax. The credit for any one taxpayer cannot exceed $1 million annually across all tax types. The credit is currently
   scheduled to be repealed effective January 1, 2025.
   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 child
   care 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.
   Other sources of uncertainty stem from the high contribution limits and high cost of care in Alaska, as well as the fact that
   the credit is available against multiple tax types in Alaska.
   Implementation Cost
   This legislation would require the Department of Revenue to make minor changes to its Tax Revenue Management System
   ("TRMS"). Resources required to implement this bill would include staff time to updated tax forms, TRMS, and Revenue
   Online, and other miscellaneous costs when applicable. These costs will be absorbed by the Tax Division using existing
   resources.
(Revised 10/31/2023 OMB/LFD)                                                                                           Page 2 of 2
HB089CS(FIN)-DOR-TAX-02-09-24                                    Page 2 of 2                                               Control Code: dPDgm
Statutes affected: 
HB0089A, AM HB 89, introduced 02/27/2023: 47.25.001, 47.25.095, 11.56.210, 47.25.071, 14.17.460
HB0089B, AM CSHB 89(HSS), introduced 05/01/2023: 21.96.070, 21.09.210, 21.66.110, 43.20.014, 43.55.019, 43.56.018, 43.65.018, 43.75.018, 43.77.045, 43.20.145, 37.14.750, 14.16.200, 43.55.011, U.S.C, 47.25.001, 47.25.095, 11.56.210, 47.25.041, 47.25.031, 47.25.071, 47.25.051, 14.17.460
HB0089C, AM CSHB 89(FIN), introduced 02/12/2024: 21.96.070, 21.09.210, 21.66.110, 43.20.014, 43.55.019, 43.56.018, 43.65.018, 43.75.018, 43.77.045, 43.20.145, 37.14.750, 14.16.200, 43.55.011, U.S.C, 47.05.030, 47.25.001, 47.25.095, 47.05.085, 11.56.210, 47.25.011, 47.25.021, 47.25.031, 47.25.041, 47.25.051, 47.25.071
HB0089D, AM SCS CSHB 89(HSS), introduced 04/12/2024: 21.96.070, 21.09.210, 21.66.110, 43.20.014, 43.55.019, 43.56.018, 43.65.018, 43.75.018, 43.77.045, 43.20.145, 37.14.750, 14.16.200, 43.55.011, U.S.C, 47.05.030, 47.25.001, 47.25.095, 47.05.085, 11.56.210, 47.25.011, 47.25.021, 47.25.031, 47.25.041, 47.25.051, 47.25.071