North Carolina HB 412: Child Care Regulatory Reforms.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025

SESSION LAW 2025-36
HOUSE BILL 412

*H412-v-7*
AN ACT TO MAKE CHILD CARE REGULATORY REFORMS; AND TO MAKE
BUILDING CODE REVISIONS.

The General Assembly of North Carolina enacts:

PART I. DECOUPLE RATED LICENSE AND SUBSIDIZED CHILD CARE
SECTION 1.(a) The General Assembly recognizes the need to balance maintaining
critical health, safety, and welfare standards for child care, as well as a well-established rating
system used for informational purposes, with the need to move toward maximizing State funds
for child care and increasing the supply of child care from State-funded sources. The General
Assembly further recognizes the importance of weighing the need to decrease the cost of child
care through deregulatory actions and at the same time maintain child care subsidy
reimbursement rates. The purpose of this provision, in part, is to encourage the business
community to partner with the State in achieving this goal.
SECTION 1.(b) To that end, by May 1, 2026, the Department of Health and Human
Services, Division of Child Development and Early Education (Division), shall develop a
proposed plan to separate the quality rating improvement system (QRIS) from the requirements
and payments for participation in the State-subsidized child care program using the market rate
study required by Section 1(c) of this act and make recommendations on implementation of the
plan while meeting the federal Child Care and Development Fund requirements including a
quality standard measurement. The Division should report any difference in the proposed plan
and the current reimbursement rate. The Division shall submit the proposed plan to the chairs of
the House and Senate Appropriations Committees, the chairs of the House and Senate
Appropriations Committees on Health and Human Services, the Joint Legislative Oversight
Committee on Health and Human Services, and the Fiscal Research Division by May 1, 2026.
The current plan will stay in full force and effect until such time as the General Assembly first
considers and approves and adopts the proposed plan and any amendments to that plan and then
the federal government approves the proposed plan and any amendments. The Division should
also include an update on the QRIS Modernization rules process under S.L. 2024-34.
SECTION 1.(c) The Division shall complete a new market rate study by May 1,
2026. This market rate study shall be made available to the public by May 1, 2026. The Division
shall ensure that the market rate study includes potential rates that are not segmented by
star-rating and new market rates for the QRIS system. The Division shall not implement new
reimbursement rates unless approved by the federal Administration of Children and Families and
authorized to do so by the General Assembly.
SECTION 1.(d) Nothing in this section shall be construed as impacting the
star-rating requirements for the NC Prekindergarten (NC Pre-K) program.

PART II. REGULATORY CHANGES
SECTION 2. G.S. 110-86(5a) reads as rewritten:

Page 2 Session Law 2025-36 House Bill 412
"(5a) Lead teacher. – An individual who is responsible for planning and
implementing the daily program of activities for a group no more than two
groups of children in a child care facility."
SECTION 5.(a) G.S. 110-91 reads as rewritten:
"§ 110-91. Mandatory standards for a license.
All child care facilities shall comply with all State laws and federal laws and local ordinances
that pertain to child health, safety, and welfare. Except as otherwise provided in this Article, the
standards in this section shall be complied with by all child care facilities. However, none
Notwithstanding any provision of law or rule to the contrary, any building and grounds which
are currently approved for school occupancy and which house a public or private elementary or
middle school shall be deemed to have met the space and equipment, sanitation, fire, and building
code requirements for a licensed child care facility when the building and grounds are serving
the same, or a subset of the same, school-age children in an out-of-school child care program.
None of the standards in this section apply to the school-age children of the operator of a child
care facility but do apply to the preschool-age children of the operator. Children 13 years of age
or older may receive child care on a voluntary basis provided all applicable required standards
are met. The standards in this section, along with any other applicable State laws and federal laws
or local ordinances, shall be the required standards for the issuance of a license by the Secretary
under the policies and procedures of the Commission except that the Commission may, in its
discretion, adopt less stringent standards for the licensing of facilities which provide care on a
temporary, part-time, drop-in, seasonal, after-school or other than a full-time basis.
...
(6) Space and Equipment Requirements. – There shall be no less than 25 square
feet of indoo