The Alabama House of Representatives on Tuesday gave final approval to a proposal aimed at increasing workforce participation statewide through new tax credits for working Alabama families, employers and certain child care facilities.

HB358 The bill was introduced in the House of Representatives by State Representative Anthony Daniels and carried in the Senate by State Senator Garlan Gujer.

The tax credit, currently awaiting Gov. Kay Ivey's signature, would provide credits to businesses that offset child care costs and provide assistance through allowances, on-site equipment and reserved seating in licensed centers; child care providers that participate in quality improvement programs to encourage higher standards and enroll more children; and nonprofit providers that expand capacity and improve quality.

“This bill gives working mothers, in particular, a chance to get back to work,” Sen. Gudger (R-Cullman) said on the Senate floor. “I travel around the state meeting with businesses large and small, and the biggest issue facing our state in every district is a worker shortage.”

RELATED: Working for Alabama: Lawmakers advance bill to benefit state's workforce, economy

Final passage of the child care tax credit is part of a seven-bill package for Alabama from Gov. Kay Ivey and lawmakers aimed at increasing the state's workforce participation rate.

“Unfortunately, many Alabamians have to choose between raising children and working, and this must change if our state is to continue to grow,” Alabama House Speaker Nathaniel Leadbetter said when the bill passed the state House last month.

“The Child Care Tax Credit bill has the power to give parents choice and a better life for their children. Alabama is not only the most business-friendly state in the nation, it is also the most family-friendly state,” said Rep. Leadbetter (R-Rainsville).

Advocacy and business groups praised lawmakers for pushing the bill, as they did in their legislative efforts to make it a top agenda item during the 2024 Alabama Legislative Session, which is set to end this week.

The Alabama Women's Foundation's 2022 “Clearing the Path” research report found that an estimated 85,000 Alabama families need quality, affordable child care but don't have easy access to it because the cost is too high or child care services are unavailable.

RELATED: State Sen. Gudger: Child care is a lifeline of Alabama's economy, now is the time to invest in it

Melanie Bridgeforth is president and CEO of the Alabama Women's Foundation.

“Alabama is second to last in the American South in female labor force participation,” Chancellor Bridgeforth said. “Increasing female labor force participation is one of the most remarkable economic developments of the past and this century, and a key step in our state is permanently eliminating structural barriers to work, such as child care.”

During the 2024 session, lawmakers were tasked with improving a major weakness in the state's economy: Alabama has one of the lowest labor force participation rates in the country.

As of Wednesday, all seven components of the “Working for Alabama” legislative package were awaiting Governor Ivey's signature, which is expected to be signed collectively at a celebratory event on Friday.

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