Child Care Stabilization & Affordability Act.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 1066

Short Title: Child Care Stabilization & Affordability Act. (Public)
Sponsors: Representatives Helfrich, Lofton, Prather, and von Haefen (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Rules, Calendar, and Operations of the House
April 29, 2026
*H1066-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO PERMIT OPP ORTUNITY SCHOLARSHIP FUNDS TO BE AWARDED FOR 2
PREKINDERGARTEN; TO MAKE PERMANENT THE T RI-SHARE CHILD CARE 3
PILOT PROGRAM; TO RE ENACT THE CHILD CARE TAX CREDIT; TO EXPA ND 4
THE EARLY CHILDHOOD EDUCATION WORKFORCE; TO STREAMLINE 5
ADMINISTRATIVE REQUIREMENTS FOR CHILD CARE PROVIDERS; TO UTILIZE 6
PUBLIC FACILITIES FOR CHILD CARE; TO CLA RIFY REGULATORY GUIDANCE 7
FOR RELIGIOUS CHILD CARE PROGRAMS; TO ST ABILIZE CHILD CARE 8
FUNDING AND BENEFITS IN NORTH CAROLINA; AND TO ENHANCE C HILD 9
CARE WORKFORCE COMPENSATION AND BENEFITS. 10
Whereas, affordable and accessible child care is essential to workforce participation, 11
small business stability, and economic growth across the State; and 12
Whereas, North Carolina faces significant shortages in licensed child care capacity 13
due to workforce constraints, regulatory bottlenecks, and rising operating costs; and 14
Whereas, early childhood educators are often paid wages insufficient to sustain the 15
workforce needed to meet statewide demand; and 16
Whereas, expanding training pathways, including apprenticeships and community 17
college programs, can strengthen the child care workforce pipeline; and 18
Whereas, the lack of coordinated administrative systems requires child care providers 19
to interact with multiple agencies and funding streams; and 20
Whereas, the General Assembly has a compelling interest in expanding safe, 21
high-quality child care while ensuring regulatory clarity, workforce development, and economic 22
participation; Now, therefore, 23
The General Assembly of North Carolina enacts: 24
25
PART I. REVISE ELIGI BILITY REQUIREMENTS AND REDUCE FUNDS FOR THE 26
OPPORTUNITY SCHOLARSHIP PROGRAM 27
SECTION 1.1.(a) G.S. 115C-562.1(3a) reads as rewritten: 28
"(3a) Eligible student. – A student residing in North Carolina who has not yet 29
received a high school diploma and who meets all of the following 30
requirements: 31
a. Is eligible to attend a North Carolina public school pursuant to Article 32
25 of this Chapter. A child who is the age of 4 on or before April 16 is 33
eligible to attend the fol lowing school year if the principal, or 34
equivalent, of the school in which the child seeks to enroll finds that 35
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Page 2 House Bill 1066-First Edition
the student meets the requirements established by the Authority 1
pursuant to G.S. 115C-562.2(d) and those findings are submitted to the 2
Authority. 3
b. Has not been enrolled in a postsecondary institution as a full -time 4
student taking at least 12 hours of academic credit. 5
c. Has not been placed in a nonpublic school or facility by a public 6
agency at public expense. 7
d. Resides in a household with an i ncome level not in excess of two 8
hundred percent (200%) of the amount required for the student to 9
qualify for the federal free or reduced-price lunch program." 10
SECTION 1.1.(b) G.S. 115C-562.2 reads as rewritten: 11
"§ 115C-562.2. Scholarship grants. 12
(a) The Authority shall make available no later than February 1 annually applications to 13
eligible students for the award of scholarship grants to attend any nonpublic school on a full - or 14
part-time basis. Information about scholarship grants and the application p rocess shall be made 15
available on the Authority's website. Beginning March 15, the Authority shall begin awarding 16
scholarship grants to students who have applied by March 1 in the following order: 17
(1) Eligible students who received a scholarship grant for the school year prior to 18
the school year for which the students are applying. 19
(2) Eligible students qualifying for a scholarship grant in the amount provided 20
under subdivision (1) of subsection (b2) of this section. 21
(3) Eligible students qualifying for a s cholarship grant in the amount provided 22
under subdivision (2) of subsection (b2) of this section. 23
(4) Eligible students qualifying for a scholarship grant in the amount provided 24
under subdivision (3) of subsection (b2) of this section. 25
(5) All other students. 26
… 27
(b2) Scholarship grants shall be awarded to eligible students as follows: 28
(1) For students residing in households with an income level not in excess of the 29
amount required for the student to qualify for the federal free or reduced-price 30
lunch program, per year per eligible student, an amount of up to one hundred 31
percent (100%) of the average State per pupil allocation for average daily 32
membership in the prior fiscal year. 33
(2) For students residing in households with an income level between the amount 34
required for the student to qualify for the federal free or reduced -price lunch 35
program and not in excess of two hundred percent (200%) of that amount, per 36
year per eligible student, an amount of up to ninety percent (90%) of the 37
average State per pu pil allocation for average daily membership in the prior 38
fiscal year. 39
(3) For students residing in households with an income level of between two 40
hundred percent (200%) of the amount required for the student to qualify for 41
the federal free or reduced -price lunch program and not in excess of four 42
hundred fifty percent (450%) of that amount, per year per eligible student, an 43
amount of up to sixty percent (60%) of the average State per pupil allocation 44
for average daily membership in the prior fiscal year. 45
(4) For all students, per year per eligible student, an amount of up to forty -five 46
percent (45%) of the average State per pupil allocation for average daily 47
membership in the prior fiscal year, unless the student qualifies for a higher 48
amount under this subsection. 49
…." 50
SECTION 1.1.(c) G.S. 115C-562.8 reads as rewritten: 51
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House Bill 1066-First Edition Page 3
"§ 115C-562.8. The Opportunity Scholarship Grant Fund Reserve. 1
… 2
(b) The General Assembly finds that, due to the critical need in this State to provide 3
opportunity for school choice for North Carolina students, it is imperative that the State provide 4
an increase of funds for 15 years to the Opportunity Scholarship Grant Fund Reserve. Therefore, 5
there There is appropriated from the General Fund to the Reserve the following amounts for each 6
fiscal year to be used for the purposes set forth in this section: 7
Fiscal Year Appropriation 8
… 9
2027-2028 $700,000,000$460,000,000 10
2028-2029 $725,000,000$485,000,000 11
2029-2030 $750,000,000$510,000,000 12
2030-2031 $775,000,000$535,000,000 13
2031-2032 $800,000,000$560,000,000 14
For the 2032-2033 fiscal year and each fiscal year thereafter, there is appropriated from the 15
General Fund to the Reserve the sum of eight hundred twenty-five million dollars ($825,000,000) 16
five hundred eighty-five million dollars ($585,000,00 0) to be used for the purposes set forth in 17
this section. When developing the base budget, as defined by G.S. 143C-1-1, for each fiscal year 18
specified in this subsection, the Director of the Budget shall include the appropriated amount 19
specified in this subsection for that fiscal year. 20
…." 21
SECTION 1.1.(d) Notwithstanding any other provision of law to the contrary, funds 22
appropriated to the Opportunity Scholarship Grant Fund Reserve for the award of opportunity 23
scholarship grants pursuant to Part 2A of Article 39 of Chapter 115C of the General Statutes are 24
reduced as follows: 25
(1) By the sum of one hundred fifty million dollars ($150,000,000) in 26
nonrecurring funds appropriated in the 2025-2026 fiscal year for the award of 27
scholarship grants in the 2026-2027 fiscal year. 28
(2) By the sum of two hundred forty million dollars ($240,000,000) in recurring 29
funds appropriated in the 2026 -2027 fiscal year for the award of scholarship 30
grants in the 2027-2028 fiscal year. 31
SECTION 1.1.(e) This section becomes effective July 1, 2026, and applies to 32
applications for the award of scholarship funds beginning in the 2027-2028 school year. 33
34
CHILD CARE SUBSIDY FUNDS FROM REDUCTIONS IN OPPORTUNITY 35
SCHOLARSHIP FUNDS 36
SECTION 1.2. There is appropriated from the General Fund to the Department of 37
Health and Human Services, Division of Child Development and Early Education, the sum of 38
one hundred fifty million dollars ($150,000,000) in nonrecurring funds for the 2026-2027 fiscal 39
year and the sum of two hundred forty million dollars ($240,000,000) in recurring funds 40
beginning in the 2026-2027 fiscal year, as a result of the reductions made under Section 1.1 of 41
this Part, to be used to assist in reducing the waitlist for subsidized child care in this State. 42
43
PART II. TRI-SHARE CHILD CARE PROGRAM PERMANENCY/FUNDS 44
SECTION 2.1.(a) Part 10B of Article 3 of Chapter 143B of the General Statutes is 45
amended by adding a new section to read: 46
"§ 143B-168.17. Tri-Share Child Care Program. 47
(a) There is established the Tri -Share Child Care Program (Program), a program that 48
creates a public/private partnership to share the cost of child care equally between employers, 49
eligible employees, and the State to: 50
(1) Make high-quality child care affordable and accessible for working families. 51
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(2) Help employers retain and attract employees. 1
(3) Help stabilize child care businesses across the State. 2
(b) The North Carolina Partnership, in collaboration with the Department, shall facilitate 3
the Program. Up to three local partnerships shall serve as regional facilitator hubs to implement 4
and administer the Program and act as regional intermediaries between employers, families, child 5
care providers, and the State. Local partnerships serving as regional facilitator hubs shall be 6
selected from geographically diverse areas across the State, with one selected from a tier one 7
county. For purposes of this subsection, a tier one county shall have the same designation as that 8
established by the most current version of the North Carolina Department of Commerce's County 9
Tier Designations. 10
(c) The North Carolina Partnership shall be accountable for the programmatic and fiscal 11
integrity of the Program and services and shall implement standardized procedures to ensure the 12
Program is operated c onsistently among all regional facilitator hubs to include, at a minimum, 13
each of the following: 14
(1) Design of the Program. 15
(2) Establishment of the Program infrastructure. 16
(3) Recruitment of participating child care providers and employers. 17
(d) The North Carolina Partnership may contract with a third-party administrator to assist 18
with centralized enrollment, payment processing, and other financial transactions associated with 19
the Program. The North Carolina Partnership shall conduct financial and compliance monitoring 20
of the regional facilitator hubs and the third-party administrator, if applicable. 21
(e) The North Carolina Partnership and local partnerships serving as regional facilitator 22
hubs shall determine Program eligibility based on standardized criteria. For purposes of this 23
Program, an employee is eligible to participate in the Program if the employee (i) is employed 24
by a participating employer, (ii) has a household income between one hundred eighty-five percent 25
(185%) and three hundred percent (300%) of the federal poverty level, and (iii) is not otherwise 26
eligible for subsidized child care in this State. An eligible employee may reside outside of the 27
designated region for the respective facilitator hub. Other criteria the North Carolina Partnership 28
and regional facilitator hubs shall implement for the Program include, at a minimum, each of the 29
following: 30
(1) Ensuring payment for the cost of child care is divided equally between an 31
employer, an eligible employee, and the State. 32
(2) Soliciting participating employers. 33
(3) Ensuring participating employers agree to (i) identify and recruit eligible 34
employees, (ii) provide the employer portion of each participating employee's 35
child care costs, and (iii) maintain communication with the regional facilitator 36
hub regarding each eligible employee's continued employment and eligibility. 37
(4) Verifying that child care providers seeking to participate in the Program are 38
licensed in this State. 39
(5) Upon determining an employee 's eligibility, ensuring payment by the 40
employee of the employee's portion of the cost of child care. 41
(6) Coordinating payments between employers and licensed child care providers. 42
(f) For purposes of this section, child care includes part -time and full-time care, before 43
and after school care, and summer day camps. 44
(g) The North Carolina Partnership shall collaborate with the Department of Commerce 45
to prioritize businesses in sectors experiencing persistent labor shortages. 46
(h) Funds provided for the Program pursuant to this section shall be divided evenly in 47
each fiscal year among the regional facilitator hubs administering the Program. These funds shall 48
not revert but shall remain available for costs associated with the Program. A regional facilitator 49
hub may use up to nine percent (9%) of its allocation for administrative costs. 50
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(i) The North Caro lina Partnership shall include in its annual report required by 1
G.S. 143B-168.12(d), at a minimum, each of the following regarding the Program: 2
(1) The number of children served, by age and county. 3
(2) The list of employers participating in the Program. 4
(3) Total Program costs, including any administrative costs." 5
SECTION 2.1.(b) G.S. 143B-168.12(d) is amended by adding a new subdivision to 6
read: 7
"(6a) A descripti on of the information required to be reported for the Tri -Share 8
Child Care Program under G.S. 143B-168.17." 9
SECTION 2.1.(c) Employees deemed eligible to participate in the Tri -Share Child 10
Care pilot program pursuant to Section 9D.9 of S.L. 2023-134, as amended by Section 15 of S.L. 11
2024-34, shall remain eligible to participate in the Tri -Share Child Care Program under 12
G.S. 143B-168.17, as enacted under subsection (a) of this section, upon enactment of this section. 13
SECTION 2.1.(d) There is appropriated from the General Fund to the Department 14
of Health and Human Services, Division of Child Development and Early Education, to be 15
allocated to the North Carolina Partnership for Children, Inc. (NCPC), the sum of nine million 16
dollars ($9,000,000) in recurring funds for the 2026-2027 fiscal year to provide the State portion 17
of funding for continuation of the Tri -Share Child Care Program established in Section 9D.9 of 18
S.L. 2023-134, as amended by Section 15 of S.L. 2024 -34. Funds provided under this section 19
shall be divided evenly in each fiscal year among the regional facilitator hubs, as described in 20
G.S. 143B-168.17, enacted in subsection (a) of this section. 21
22
PART III. REENACT CHILD CARE TAX CREDIT 23
SECTION 3.1.(a) G.S. 105-153.10 is reenacted as it existed immediately before its 24
expiration and reads as rewritten: 25
"§ 105-153.10. Credit for children. 26
(a) Credit. – A taxpayer who is allowed a federal child tax credit under section 24 of the 27
Code for the taxable year is allowed a credit against the tax imposed by this Part for each 28
dependent child for whom the taxpayer is allowed the federal credit. A taxpayer is allowed a 29
credit against the tax imposed by this Part for each qualifying child of the taxpayer. A "qualifying 30
child" is defined by section 152(c) of the Code. The amount of credit allowed under this section 31
for the taxable year is equal to the amount listed in the table below based on the taxpayer's 32
adjusted gross income, as calculated under the Code: 33
Filing Status AGI Credit Amount 34
Married, filing jointly Up to $40,000 $125.00$250.00 35
Over $40,000 36
Up to $100,000 $100.00$125.00 37
Over $100,000 0 38
39
Head of Household Up to $32,000 $125.00$250.00 40
Over $32,000 41
Up to $80,000 $100.00$125.00 42
Over $80,000 0 43
44
Single Up to $20,000 $125.00$250.00 45
Over $20,000 46
Up to $50,000 $100.00$125.00 47
Over $50,000 0 48
49
Married, filing separately Up to $20,000 $125.00$250.00 50
Over $20,000 51
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Up to $50,000 $100.00$125.00 1
Over $50,000 0. 2
3
(b) Limitations. – A nonresident or part -year resident who claims the credit allowed by 4
this section shall reduce the amount of the credit by multiplying it by the fraction calculated under 5
G.S. 105-134.5(b) or (c), as appropriate.The credit allowed under this section may not exceed the 6
amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowed, 7
except payments of tax made by or on behalf of the taxpayer.G.S. 105-153.4. Married individuals 8
qualifying for a credit under this section who file separate returns m ay not collectively claim 9
more than the maximum credit allowed under a joint return. 10
(c) Credit Refundable. – If the credit allowed by this section exceeds the amount of tax 11
imposed by this Part for the taxable year reduced by the sum of all credits allowable, the Secretary 12
must refund the excess to the taxpayer. The refundable excess is governed by the provisions 13
governing a refund of an overpayment by the taxpayer of the tax imposed in this Part . In 14
computing the amount of tax against which multiple credits are allowed, nonrefundable credits 15
are subtracted before refundable credits." 16
SECTION 3.1.(b) This section is effective for taxable years begin ning on or after 17
January 1, 2026. 18
19
PART IV. CHILD CARE WORKFORCE DEVELOPMENT 20
21
EARLY CHILDHOOD APPRENTICESHIPS 22
SECTION 4.1.(a) Part 3 of Article 1 of Chapter 115C of the General Statutes is 23
amended by adding a new section to read: 24
"§ 115C-10.52. Early Childhood Apprenticeship Grant Program. 25
(a) Program Established; Purpose. – There is established the North Carolina Community 26
College Early Childhood Apprenticeship Grant Program (Program) to be administered by the 27
State Board of Community Colleges. The purpose of the Program is to provide additional funds 28
to community colleges to establish or expand registered apprenticeships in early childhood 29
education recognized by Apprenticesh ipNC. The State Board shall adopt rules for the 30
disbursement of the grants pursuant to this section. 31
(b) Program Participation. – Any community college in the State may participat e in the 32
Program by providing notice of intent to participate to the State Board. 33
(c) Grant Fund Usage. – Grant funds awarded pursuant to this section shall only be used 34
for the following purposes: 35
(1) Establish or expand registered apprenticeships recognized by 36
ApprenticeshipNC in early childhood education. 37
(2) Provide tuition assistance, wage supplements, and employer support payments 38
for employers participating in registered apprenticeships recognized by 39
ApprenticeshipNC in early childhood education. 40
(3) Align apprenticeship coursework with credential requirements in Chapter 110 41
of the General Statutes. 42
(4) Prioritize apprenticeship placements in licensed child care facilities serving 43
subsidy-eligible children. 44
(d) Report. – By July 15 of each year, the Community Colleges System Office shall report 45
to the Joint Legislative Oversight Committee on Health and Human Services on the following: 46
(1) Enrollment changes in programs involving apprenticeships in early childhood 47
education compared to the prior year. 48
(2) Completion rates of apprentices compared to the prior year. 49
(3) To the extent information is available, workforce retention rates for 50
apprentices who complete their internship." 51
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SECTION 4.1.(b) There is appropriated from the General Fund to the Community 1
Colleges System Office the sum of five million dollars ($5,000,000) in recurring funds to 2
implement the provisions of this section. 3
4
PART V. STREAMLINED ADMINISTRATIVE SYSTE M FOR CHILD CARE 5
PROVIDERS 6
7
UNIFIED CHILD CARE ADMINISTRATIVE PORTAL 8
SECTION 5.1.(a) The Department of Health and Human Services, Division of Child 9
Development and Early Education (DCDEE), shall develop and implement a unified online 10
portal for child care providers. The port al shall allow child care providers to do each of the 11
following: 12
(1) Submit required applications, licensing documentation, and compliance 13
materials. 14
(2) Apply for State or federally funded programs related to child care. 15
(3) Access reporting requirements for child care subsidy programs and workforce 16
initiatives. 17
(4) Integrate administrative processes from the following agencies: 18
a. DCDEE. 19
b. Department of Public Instruction. 20
c. North Carolina Partnership for Children, Inc. 21
d. North Carolina Community Colleges System. 22
e. Other relevant State or federally administered child care funding 23
programs. 24
SECTION 5.1.(b) DCDEE shall submit an implementation report to the Joint 25
Legislative Oversight Committee on Health and Human Services and the Joint Legislative 26
Oversight Committee on Information Technology within 18 months from the date this act 27
becomes effective. 28
29
PART VI. FACILITIES FOR CHILD CARE 30
31
USE OF PUBLIC FACILITIES FOR CHILD CARE 32
SECTION 6.1.(a) The Department of Public Instruction, in collaboration with the 33
Community Colleges System Office, shall develop a plan to use underutilized classrooms or 34
campus spaces for licensed child care facilities. The plan shall do all of the following: 35
(1) Identify suitable classrooms or campus spaces for use as licensed child care 36
facilities. 37
(2) Prioritize classrooms or campus spaces in counties with limited child care 38
capacity. 39
(3) Allow for partnerships with licensed providers or nonprofit operators of child 40
care. 41
SECTION 6.1.(b) The Department of Public Instruction shall submit a report 42
detailing the plan developed pursuant to subsection (a) of this section to the Joint Legislative 43
Education Oversight Committee, the Joint Legislative Oversight Committee on He alth and 44
Human Services, and the Fiscal Research Division no later than December 15, 2027. 45
SECTION 6.1.(c) There is appropriated from the General Fund to the Department 46
of Public Instruction the sum of one hundred thousand dollars ($100,000) in nonrecurring funds 47
for the 2026-2027 fiscal year to develop the plan required by this section. 48
49
STATE EMPLOYEE CHILD CARE FACILITIES 50
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SECTION 6.2.(a) The Department of Administration (DOA) shall inventory 1
underutilized State-owned buildings suitable for conversion i nto child care facilities that will 2
serve State employees. DOA shall develop recommendations for each of the following: 3
(1) Piloting on-site child care facilities. 4
(2) Public-private partnerships with licensed providers. 5
(3) Leasing or licensing space for child care operations. 6
SECTION 6.2.(b) The Department of Administration shall submit a report of its 7
findings and any recommendations to the Joint Legislative Oversight Committee on General 8
Government within 18 months from the date this act becomes effective. 9
SECTION 6.2.(c) There is appropriated from the General Fund to the Department 10
of Administration the sum of one hundred thousand dollars ($100,000) for the 2026 -2027 fiscal 11
year to develop the recommendations required by this section. 12
13
PART VII. REGULATORY CLARITY FOR RELIGIOUS-SPONSORED CHILD CARE 14
15
GUIDANCE FOR RELIGIOUS-SPONSORED CHILD CARE FACILITIES 16
SECTION 7.1.(a) The Department of Health and Human Services, Division of Child 17
Development and Early Education, shall develop and publish a clear, reg ulatory guidance 18
document to assist religious-sponsored organizations seeking to provide child care that outlines 19
each of the following: 20
(1) Licensing pathways. 21
(2) Religious exemption eligibility. 22
(3) Health and safety requirements. 23
(4) Application procedures, including, but not limited to, steps in applying for 24
licensure and ways to participate in existing exemptions. 25
SECTION 7.1.(b) The Division of Child Development and Early Education shall 26
conduct outreach to faith‑based organizations regarding these guidelines. 27
28
PART VIII. CHILD CARE FUNDING STABILIZATION 29
30
UPDATES TO CHILD CARE SUBSIDY REIMBURSEMENT RATES 31
SECTION 8.1.(a) Beginning July 1, 2026, the Department of Health and Human 32
Services, Division of Child Development and Early Education, shall increase the child care 33
subsidy market rates to the seventy -fifth percentile as recommended by the most recent Child 34
Care Market Rate Stu dy for children in three -, four-, and five-star-rated child care centers and 35
homes. 36
SECTION 8.1.(b) Beginning July 1, 2026, provisions of payment rates for child care 37
providers in counties that have a county rate below the State rate for center -based and 38
home-based care are as follows: 39
(1) Except as applicable in subdivision (2) of this subsection, payment rates shall 40
be set at the seventy -fifth percentile statewide market rate as recommended 41
by the most recent Child Care Market Rate Study for children birth through 5 42
years of age for licensed three -, four-, and five -star-rated child care centers 43
and homes. 44
(2) If it can be demonstrated that the application of the statewide rate to a county 45
with fewer than 50 children in each age group is lower than the county market 46
rate and would inhibit the ability of the county to purchase child care for 47
low-income children, then the county market rate may be applied. 48
SECTION 8.1.(c) There is appropriated from the General Fund to the Department 49
of Health and Human Services, Division of Child Development and Early Education, the sum of 50
two hundred five million dollars ($205,000,000) in recurring funds for the 2026-2027 fiscal year 51
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to implement the market rate increases and to establish a floor for child care subsidy rates as set 1
forth in subsections (a) and (b) of this section. 2
3
AUTOMATIC SUBSIDIZED CHILD CARE RATE ADJUSTMENT 4
SECTION 8.2. Part 10C of Article 3 of Chapter 143B of the General Statutes is 5
amended by adding a new section to read: 6
"§ 143B-168.28. Automatic rate adjustment for subsidized child care. 7
(a) Effective July 1, 2027, t he Department shall adjust annually the child care subsidy 8
reimbursement rates based on one of the following, whichever is greater: 9
(1) The percentage change in the Consumer Price Index for All Urban Consumers 10
(CPI-U), South Region, or any subsequent similar publication, as published 11
by the United States Bureau of Labor Statistics, for the preceding 12 -month 12
period. 13
(2) The percentage change reflected in the most recent North Carolina Child Care 14
Market Rate Study. 15
(b) If the Child Care Market Rate Study results in higher reimbursement rates than those 16
calculated under subdivision (a)(1) of this section, the Department shall implement the higher 17
rates. 18
(c) Updated reimbursement rates calculated pursuant to this section shall be implemented 19
administratively and shall not require further appropriation or legislative approval, subject to the 20
availability of funds. 21
(d) The Department shall publish updated reimbursement rate schedules by August 1 of 22
each year and report the adjustments to the Joint Legislative Oversight Committee on Health and 23
Human Services and the Fiscal Research Division of the General Assembly." 24
25
PART IX. CHILD CARE WORKFORCE COMPENSATION AND BENEFITS 26
27
EXPANSION OF THE CHILD CARE WAGE$ PROGRAM 28
SECTION 9.1. There is appropriated from the General Fund to the Department of 29
Health and Human Services, Division of Child Development and Early Education (Division), the 30
sum of twenty-two million seven hundred thousand dollars ($22,700,000) in nonrecurring funds 31
for the 2026 -2027 fiscal year and the sum of thirty -six million dollars ($36,000,000) for the 32
2027-2028 fiscal year in recurring funds to expand the Child Care WAGE$ program, which 33
provides salary supplements for early childhood educators. When developing the base budget, as 34
defined by G.S. 143C-1-1, for the 2027-2028 fiscal year, the Director of the Budget shall include 35
the appropriated amount specified in this section for that fiscal year. 36
37
CHILD CARE EMPLOYER HEALTH COVERAGE POOL 38
SECTION 9.2.(a) Article 7 of Chapter 110 of the General Statutes is amended by 39
adding a new section to read: 40
"§ 110-90.3. Child care employer health coverage pool. 41
(a) Establishment. – The Department of State Treasurer , in consultation with the 42
Department and the Department of Insurance, shall establish and administer a State -run group 43
health coverage pool to make health benefit coverage available for purchase by eligible child 44
care employers on behalf of their employees. The pool shall be operated separately from the State 45
Health Plan for Teachers and State Employees; provided, however, that the State Treasurer may 46
use administrative, contracting, actuarial, enrollment, and other operational resources of the State 47
Health Plan to the extent practicable. 48
(b) Eligible Employers. – An employer is eligible to participate in the pool if the 49
employer satisfies all of the following criteria: 50
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(1) Holds a valid license issued by the Department to operate a child care facility 1
or child care program in this State. 2
(2) Elects to participate in the pool in accordance with rules, policies, or 3
procedures adopted by the State Treasurer. 4
(3) Agrees to satisfy the employer premium contribution requirements of this 5
section and any other participation requirement s established by the State 6
Treasurer. 7
(c) Eligible Employees. – Employees of participating child care employers who satisfy 8
eligibility requirements established by the State Treasurer shall be eligible to enroll in coverage 9
offered through the pool established in this section . The State Treasurer may provide for 10
dependent coverage on terms established by the State Treasurer. 11
(d) Employer and Employee Premium Share. – A participating child care employer shall 12
pay not less than fifty percent (50%) of the premium for employee-only coverage elected through 13
the pool established under this section. An enrolled employee shall pay the remaining percentage 14
of the premium for employee -only coverage through payroll withholding or other method 15
approved by the State Treasurer. 16
(e) Premium Withholdings Rebate. – Subject to the availability of funds appropriated for 17
this purpose, the Department shall provide a premium withholdings rebate to each child care 18
employer participating in the pool under this section in an amount equal to the actual employee 19
premium withholdings remitted by the employer for employee -only coverage, not to exceed 20
twenty-five percent (25%) of the applicable premium. A rebate provided under this subsection 21
shall be used solely to offset the employee sha re of premium required by subsection (d) of this 22
section. 23
(f) Administration. – The State Treasurer may contract with one or more third -party 24
administrators, carriers, pharmacy benefit managers, or other vendors as necessary to operate the 25
pool established under this section and may determine benefit design, enrollment periods, 26
coverage effective dates, and other operational matters necessary to implement this section. 27
(g) Rulemaking and Standards. – The State Treasurer may adopt rules, policies, 28
procedures, and participation standards necessary to implement this section, including standards 29
governing employer entry into and withdrawal from the pool, minimum participation 30
requirements, verification of premium contributions, and coordination with federal requirements. 31
(h) Reporting. – No later than March 1, 2027, and annually thereafter for two years, the 32
State Treasurer, in consultation with the Department, shall report to the Joint Legislative 33
Oversight Committee on Health and Human Services and the Fiscal R esearch Division on 34
implementation of the pool established in accordance with this section , including employer 35
participation, employee enrollment, premium levels, rebate utilization, administrative costs, and 36
recommendations for statutory changes." 37
SECTION 9.2.(b) The Department of State Treasurer shall ensure that coverage is 38
available under the child care employer health coverage pool under G.S. 110-90.3, as enacted by 39
subsection (a) of this section, no later than January 1, 2027. 40
SECTION 9.2.(c) There is appropriated from the General Fund to the Department 41
of Health and Human Services the sum of thirty -five million dollars ($35,000,000) in recurring 42
funds for the 2026 -2027 fiscal year to provide the premium withholdings rebate authorized by 43
G.S. 110-90.3(e), as enacted by subsection (a) of this section. 44
SECTION 9.2.(d) There is appropriated from the General Fund to the Department 45
of State Treasurer the sum of two million dollars ($2,000,000) in nonrecurring funds for the 46
2026-2027 fiscal year for administrative and start-up costs associated with establishing the child 47
care employer health coverage pool authorized by G.S. 110-90.3, as enacted by subsection (a) of 48
this section. 49
50
PART X. EFFECTIVE DATE 51
General Assembly Of North Carolina Session 2025
House Bill 1066-First Edition Page 11
1
EFFECTIVE DATE 2
SECTION 10.1. Except as otherwise prov ided, this act becomes effective July 1, 3
2026. 4