HUNTSVILLE, Ala. (WHNT) — Alabama has a low unemployment rate, one of the best in the country. And the state has a low workforce participation rate, among the country’s worst.

Some Alabama lawmakers point to the lack of widely available quality and affordable childcare options as a key reason for Alabama’s poor employment participation rate.

A bill sponsored by House Minority Leader Anthony Daniels aiming to address the problem has passed in the House, and is now moving to the Senate. The bill provides tax credits and grants to childcare providers and tax credits for companies that provide or assist with childcare costs for their employees.

Daniels tells News 19 that for many lower-wage workers, their paycheck isn’t enough to cover childcare costs and justify continuing to work.

The bill ties in with recommendations by Lt. Gov. Will Ainsworth’s Commission on 21^st Century Workforce, which acknowledges that for many working families childcare costs are a major burden and a barrier to work.

Something the bill focuses on is helping small and rural daycare operators. The bill was reviewed and approved by the Alabama House Ways and Means Education Committee.

Attorney Susan Kennedy of Levitate Legal addressed the committee today. She pointed to highlights in the bill, including the availability of tax credits for small providers.

“The big ones aren’t going to get it all,” she said. “But the small ones that maybe are just making it on the margins, they will be able to use that capital to hire another person, to improve the quality of their facilities and to offer more childcare slots.”

The committee approved the bill Wednesday and was passed in the full House Thursday.

“This is a huge win for everyone in Alabama, especially workers, employers, and families. Not only will this have a positive impact on our state’s labor force participation rate, but it will also help employers attract and retain their workers,” Daniels stated. “Too many working parents have struggled with the issue of child care and this is a big step in the right direction. This will also have the added benefit of improving educational achievement and outcomes for children throughout Alabama.”

The bill proposes to start in the 2025 tax year offering $15 million in tax credits, with that figure rising to $20 million by 2027. It calls for 25 percent of the credits to be reserved for rural providers and tax credits would increase based on quality ratings of providers. A one-star rating would be worth $1,000 in credits, up to $2,000 for five stars.

A portion of the text of the bill spells out its aim: “It is the intent of the Legislature, by the passage of this legislation, to encourage more Alabamians to enter the workforce and gain employment by improving the quality and availability of childcare options for working parents.”