H 1086

GENERAL ASSEMBLY OF NORTH CAROLINA
  SESSION 2025
 H  2
  HOUSE BILL 1086
  Committee Substitute Favorable 5/12/26
 Short Title:   Child Care Initiative Funds/Reform/Study.  (Public)
 Sponsors:
 Referred to:
  April 30, 2026
1A BILL TO BE ENTITLED
2 AN ACT TO ESTABLISH CAREER-READY LEAD TEACHER ACADEMIES TO PROVIDE
3    ALTERNATIVE PATHWAYS TO CAREERS IN CHILD CARE; TO APPROPRIATE
4    FUNDS TO THE NORTH CAROLINA PARTNERSHIP FOR CHILDREN, INC., TO
5    EXPAND MENTAL AND BEHAVIORAL HEALTH SERVICES FOR CHILDREN,
6    FAMILIES, AND STAFF IN CHILD CARE FACILITY SETTINGS AND ESTABLISH
7    THE NORTH CAROLINA PARTNERSHIP FOR CHILDREN, INC., SPECIAL FUND; TO
8    IMPLEMENT REFORMS REGARDING CHILD CARE CENTER ADMINISTRATORS
9    UNDER THE LAWS PERTAINING TO CHILD CARE; TO STUDY THE FEASIBILITY
10    OF PROVIDING LIABILITY INSURANCE COVERAGE FOR CHILD CARE
11    PROVIDERS; AND TO UPDATE THE BIDDING REQUIREMENTS FOR SMART
12    START.
13 The General Assembly of North Carolina enacts:
14
15 PART I. CAREER-READY LEAD TEACHER ACADEMY PILOT PROGRAM
16SECTION 1.1. The purpose of this Part is to provide alternative pathways to career
17 advancement in licensed child care. To that end, the North Carolina Partnership for Children,
18 Inc., in collaboration with the North Carolina Community Colleges System Office, shall develop
19 and implement a two-year pilot program that expands the child care workforce academies
20 currently operating in Johnston and Wayne Counties. The pilot program shall establish
21 career-ready lead teacher academies across the State designed to provide free, comprehensive
22 training and support to individuals, with no experience or education in child care, who are
23 interested in pursuing a career in child care.
24SECTION 1.2. Local partnerships in the following counties shall participate in the
25 pilot program described under this Part: Johnston and Wayne. The North Carolina Partnership
26 for Children, Inc. (NCPC), in collaboration with the Community Colleges System Office, shall
27 select 10 additional local partnerships to participate in the pilot program with at least one local
28 partnership selected from each of the four local partnership regions of the statewide Smart Start
29 network, which regions are the West, Mid-West, Mid-East, and East.
30SECTION 1.3. The Community Colleges System Office and local community
31 colleges shall coordinate to ensure that graduates of the career-ready lead teacher academies meet
32 all requirements to be credentialed with the North Carolina Early Childhood Credential as lead
33 teachers in child care in this State.
34SECTION 1.4.(a) Each child care career-ready lead teacher academy (academy)
35 shall seek to enroll no less than 10 students, with a goal of enrolling 15 students in each course.
36 The academy shall operate up to eight hours per day over a two- to three-week period. A
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1 participating community college shall strive to offer an academy up to three times per year, with
2 at least one of the three academies occurring at the end of the traditional public school calendar
3 year to allow participation by interested high school and college students. The academy shall be
4 offered free-of-charge to applicants. Students participating in the academy shall receive the
5 knowledge, skills, and training, including the necessary health screenings, background checks,
6 and fingerprinting, required for employment as a lead teacher in a licensed child care program in
7 this State. Upon successful completion of the academy, each student shall receive either a North
8 Carolina Early Childhood Credential or a Provisional NC Early Childhood Credential that will
9 enable the student to begin working as either a lead teacher or group leader in a licensed child
10 care program immediately upon graduation.
11SECTION 1.4.(b) A local partnership may provide each graduate with a one-time
12 stipend. If a one-time stipend for completing the course is provided, the amount shall be at the
13 discretion of the local partnership but shall not be less than one hundred fifty dollars ($150.00).
14SECTION 1.4.(c) Students shall be eligible to receive an additional one-time stipend
15 in the amount of five hundred dollars ($500.00) in State funds after completing one year of
16 employment as a lead teacher in a licensed child care program in this State. To receive the
17 additional stipend under this subsection, the graduate shall do each of the following:
18(1)     Begin full-time employment as a lead teacher in a licensed child care center
19or licensed family child care home within three months from the date of
20graduation from an academy.
21(2)     Complete the one-year of employment required by this subsection within a
22consecutive 12-month period at the same child care program.
23SECTION 1.4.(d) The stipends provided under this section shall be available to a
24 graduate of an academy who is employed by a licensed child care facility in this State, including
25 a graduate who establishes a licensed family child care home.
26SECTION 1.5. The North Carolina Partnership for Children, Inc., and local
27 partnerships shall (i) collaborate with the community college in the county or counties in which
28 the local partnership is located, as practicable, to implement the career-ready lead teacher
29 academy and (ii) ensure information about the career-ready lead teacher academy in the
30 respective county is made available to the public.
31SECTION 1.6. The North Carolina Partnership for Children, Inc. (NCPC), in
32 collaboration with the local partnerships and community colleges participating in the pilot
33 program, shall submit a progress report on the pilot program to the Joint Legislative Oversight
34 Committee on Health and Human Services and the Fiscal Research Division by March 31, 2027,
35 with any concerns or recommendations for program expansion. A final report shall be submitted
36 by December 31, 2027, and shall include, at a minimum, the following:
37(1)     The local partnerships and community colleges participating in the pilot
38program.
39(2)     The number of students enrolled in each academy, by county.
40(3)     The number of students who successfully completed the academy, by county.
41(4)     The number of newly credentialed graduates employed as lead teachers in
42licensed child care programs, by county.
43(5)     The outcomes achieved from the pilot program, including any
44recommendations for expanding the program statewide.
45(6)     The number of new child care slots available as a result of adding the new
46lead teachers.
47(7)     Total program costs, including any administrative costs borne by the county.
48(8)     The amount of funds needed to expand the program statewide.
49SECTION 1.7. There is appropriated from the General Fund to the Department of
50 Health and Human Services, Division of Child Development and Early Education, the sum of
51 one million four hundred seventy-six thousand dollars ($1,476,000) in nonrecurring funds for the
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1 2026-2027 fiscal year to be allocated to the North Carolina Partnership for Children, Inc., to
2 provide the State match for implementing the pilot program described in this Part as follows:
3(1)     The sum of nine hundred seventy-two thousand dollars ($972,000) for the
42026-2027 fiscal year for the State portion of tuition costs.
5(2)     The sum of five hundred four thousand dollars ($504,000) for the 2026-2027
6fiscal year for the stipends provided with State funds in accordance with
7Section 1.4 of this Part.
8SECTION 1.8. Funds described in Section 1.7 of this Part shall be used in
9 accordance with the following:
10(1)     The funds shall be allocated equally among the local partnerships selected to
11participate in the pilot program.
12(2)     Local partnerships shall provide documentation of a twenty-five percent
13(25%) local match as a condition of receiving State funds.
14(3)     Any unexpended and unencumbered funds at the end of the fiscal year from
15the funds provided under this Part shall not revert to the General Fund but
16shall remain available for use in accordance with this Part.
17(4)     The funds shall not be used for administrative costs.
18(5)     The funds are not subject to the administrative cost requirements under
19Section 9D.5(b) of S.L. 2023-134, child care services funding requirements
20under G.S. 143B-168.15(b), child care subsidy expansion requirements under
21G.S. 143B-168.15(g), or match requirements under Section 9D.5(d) of S.L.
222023-134.
23SECTION 1.9.(a) As a means to assist younger individuals with a career pathway
24 to provide child care services, the Department of Health and Human Services, Division of Child
25 Development and Early Education (DCDEE), shall establish a Provisional Early Childhood
26 Credential for individuals who are 16 or 17 years of age and preparing to work in licensed child
27 care programs in this State. To qualify for the provisional credential, an individual shall complete
28 an approved early childhood education course offered through a North Carolina public high
29 school (FE11), a Career and College Promise course (EDU 119), an Intro to School-Age Care
30 course (EDU 120 or EDU 2120), a Career and College Promise Workforce Continuing Education
31 pathway (EDU 3119), or Career-Ready Lead Teacher Academy.
32SECTION 1.9.(b) By March 31, 2027, the North Carolina Community Colleges
33 System, the North Carolina Department of Public Instruction (DPI), the North Carolina Center
34 for Afterschool Programs (NC CAP), and DCDEE shall collaborate to ensure the required child
35 care health and safety trainings are embedded in each of the courses in subsection (a) of this
36 section so that individuals who are working to obtain the Provisional Early Childhood Credential
37 can access the required trainings through structured micro credentials, and, through this
38 collaboration, DCDEE shall ensure its trainings are available in the Moodle platform. The
39 Community Colleges System, DPI, NC CAP, and DCDEE shall also collaborate to create
40 pre-apprenticeship and apprenticeship pathways aligned with the Provisional Early Childhood
41 Credential. DCDEE shall issue the Provisional Early Childhood Credential to individuals who
42 meet the requirements established under subsection (a) of this section. The Provisional Early
43 Childhood Credential shall enable those individuals to work in any out-of-school and summer
44 programs, including those located at licensed child care facilities, as group leaders as defined in
45 the child care licensing rules according to the following staff-child ratios and group sizes:
46
47 Age  Ratio Staff/Children
48 For a group that includes a child 5 years of age  1/10
49 For a group of children 6 years of age and older  1/14 to 1/16
50
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1 No out-of-school or summer program providing child care pursuant to this section shall care for
2 more than 25 children in one group. The out-of-school or summer program providing care for 26
3 or more children shall provide for two or more groups according to the ages of children and shall
4 provide separate supervisory personnel.
5SECTION 1.9.(c) When an individual who has received a provisional credential
6 pursuant to this section reaches 18 years of age and has obtained a high school diploma or its
7 equivalent, the individual shall notify the Division of Child Development and Early Education
8 (Division) of such, if they wish to receive the full Early Childhood Credential, and the Division
9 shall issue the individual the full North Carolina Early Childhood Credential which shall enable
10 that individual to be employed as a lead teacher in any licensed child care program in this State.
11
12 PART II. CHILD CARE MENTAL AND BEHAVIORAL HEALTH SERVICES
13 FUNDING
14SECTION 2.1.(a) There is appropriated from the ARPA Temporary Savings Fund,
15 established in Section 1.3(a) of S.L. 2023-7, to the Department of Health and Human Services,
16 Division of Child Development and Early Education, the sum of fifteen million dollars
17 ($15,000,000) in nonrecurring funds for the 2026-2027 fiscal year to be allocated to the North
18 Carolina Partnership for Children, Inc. (NCPC), to expand mental and behavioral health services
19 for children, families, and staff in child care facility settings and out-of-school programs,
20 including on-site services and behavioral health supports. The NCPC shall spend the funds
21 appropriated in this Part in the following budget codes: PSC 5415 Health Care Access and
22 Support, PSC 5505 Parent Education, PSC 3125 Quality Child Care, and PSC 5509 Parents as
23 Teachers. The NCPC shall distribute the funds appropriated in this Part to local partnerships, as
24 determined by the NCPC. These funds shall supplement and not supplant existing Smart Start
25 partnership behavioral health spending. Funds appropriated in this Part shall not revert at the end
26 of the 2026-2027 fiscal year but shall remain available for costs associated with mental and
27 behavioral health initiatives described in this subsection until expended.
28SECTION 2.1.(b) The NCPC shall submit a progress report on the mental and
29 behavioral health initiatives described in subsection (a) of this section to the Joint Legislative
30 Oversight Committee on Health and Human Services, the Secretary of the Department of Health
31 and Human Services, and the Fiscal Research Division by March 15, 2027, and a final report by
32 November 15, 2028. The progress report and final report shall include all of the following:
33(1)     The name of each local partnership that received funds.
34(2)     The number of children served by each local partnership.
35(3)     The types of mental and behavioral health services provided by each local
36partnership.
37(4)     Recommendations for continuing and/or expanding mental and behavioral
38health initiatives for children, families, and staff in child care facility settings.
39SECTION 2.1.(c) Additional funds allocated in this Part to the North Carolina
40 Partnership for Children, Inc., from the Department of Health and Human Services, Division of
41 Child Development and Early Education, for the 2026-2027 fiscal year are not subject to the
42 administrative cost requirements under Section 9D.5(b) of S.L. 2023-134, child care services
43 funding requirements under G.S. 143B-168.15(b), child care subsidy expansion requirements
44 under G.S. 143B-168.15(g), or match requirements under Section 9D.5(d) of S.L. 2023-134.
45SECTION 2.2.(a) G.S. 143B-168.15(h) reads as rewritten:
46     "(h) The North Carolina Partnership for Children, Inc., Special Fund is hereby established
47 as an interest-bearing, nonreverting special fund in the Department of Health and Human
48 Services. Funds appropriated from the General Fund to the Department for Smart Start and the
49 North Carolina Partnership for Children, Inc. (NCPC), shall be deposited in the Fund and shall
50 be used by the NCPC and local partnerships exclusively for the purposes authorized in this
51 section, unless otherwise expressly provided by law. State funds allocated to local partnerships
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 General Assembly Of North Carolina  Session 2025
1 that are unexpended at the end of a fiscal year shall not revert but shall remain available to the
2 North Carolina Partnership for Children, Inc., to reallocate to local partnerships. Notwithstanding
3 G.S. 147-86.11 or any other provision of law to the contrary, the NCPC shall be allowed to hold
4 cash in excess of incurred expenditures at the end of each fiscal year up to five million dollars
5 ($5,000,000). Not later than August 15 of each year, the NCPC shall provide to the Department
6 of Health and Human Services a financial status report for the preceding fiscal year that includes
7 all actual expenditures and remaining cash on hand."
8SECTION 2.2.(b) This section is effective when it becomes law.
9
10 PART III. CHILD CARE REFORMS/CHILD CARE CENTER ADMINISTRATORS
11SECTION 3.1. G.S. 110-91(8) is amended by adding the following sub-subdivisions
12 to read:
13"a1. A licensed child care center may use the combined education and work
14experience of two staff persons to meet the requirements for Level II
15and Level III certificates or designation for the NC Early Childhood
16Administration Credential certificate established by the Commission
17and shall receive the same quality rating improvement system (QRIS)
18credit toward a star-rated license as the center would receive if the
19requirements were met by one staff person. To meet the requirements
20of this sub-subdivision, the following requirements must be met:
211.       One individual must complete EDU 261 and EDU 262 as set
22out in the Child Care Rules in the Administrative Code, or the
23equivalent, or hold an associate degree or higher in business
24administration or a related field, or have at least two years of
25verifiable business or administrative work experience.
262.       One individual must (i) hold an associate degree or bachelor's
27of science degree in early childhood education or child
28development as designated by the Commission, (ii) be
29responsible for the center's curriculum, program delivery, and
30compliance practices, and (iii) be physically on-site for at least
31the minimum number of hours required by the child care
32staffing requirements set out under the Child Care Rules in the
33Administrative Code.
34a2.   The Department shall allow an individual to earn the minimum
35mandatory North Carolina Early Childhood Administration Credential
36without completing coursework in EDU 261 and EDU 262, or the
37equivalent of both, when the individual has (i) an associate degree or
38higher in business administration or a related field or (ii) two years of
39verifiable business or administrative work experience."
40SECTION 3.2. This Part is effective when it becomes law.
41
42 PART IV. STUDY INSURANCE PROGRAM FOR CHILD CARE PROVIDERS
43SECTION 4.1.(a) The Department of Insurance shall utilize a consulting firm, an
44 actuarial firm, a brokerage firm, or any combination thereof to study the feasibility of establishing
45 liability insurance coverage, including State-supported captive insurance, risk-pooling, joint
46 underwriting association, joint reinsurance, or other organizations, for North Carolina child care
47 providers in order to provide liability insurance coverage to participating child care providers,
48 which has the potential to support risk distribution while promoting strong governance and shared
49 accountability. All of the following shall be part of the study undertaken in accordance with this
50 subsection:
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1(1)      The collection of loss data and operational information from child care
2providers statewide in order to estimate program feasibility, premium
3requirements, and necessary surplus levels.
4(2)     An evaluation of the viability of a program that is designed primarily to
5provide general liability coverage, including a focus on sexual abuse and
6molestation (SAM) coverage, whether offered separately or bundled.
7(3)     A determination of the amount of public funding needed to initially capitalize
8the insurer and an exploration of potential alternative solutions to that public
9funding.
10(4)     An analysis of conditions in the traditional, excess and surplus (E&S), and
11unauthorized foreign reinsurance markets, including costs, affordability,
12availability of liabilities coverages, and the barriers that child care providers
13experience in accessing adequate liability coverage.
14(5)     A determination of whether commercial insurance carriers would be willing
15to participate in this program, including discussion of developing an assigned
16risk pool.
17(6)     The recommended design for the most viable program for North Carolina
18child care providers.
19(7)     Identification of any legislative changes necessary to implement any
20recommendations contained within the report, including any funding
21recommendations.
22SECTION 4.1.(b) The Department of Health and Human Services shall cooperate
23 with the Department of Insurance, and any entity with which the Department of Insurance has
24 contracted, for the purposes of supplying any information necessary to conduct the study required
25 by this section.
26SECTION 4.1.(c) No later than June 1, 2027, the Department of Insurance shall
27 submit a report to the Joint Legislative Oversight Committee on General Government with the
28 findings of the study required by this section.
29SECTION 4.1.(d) Effective July 1, 2026, there is appropriated from the General
30 Fund to the Department of Insurance the sum of three hundred fifty thousand dollars ($350,000)
31 in nonrecurring funds for the 2026-2027 fiscal year for the purposes of conducting the study
32 required by this section.
33
34 PART V. UPDATE BIDDING REQUIREMENTS FOR SMART START
35SECTION 5.1. Section 9D.5(e) of S.L. 2023-134 reads as rewritten:
36     "SECTION 9D.5.(e) Bidding. – The North Carolina Partnership for Children, Inc., and all
37 local partnerships shall use competitive bidding practices in contracting for goods and services
38 on contract amounts as follows:
39(1)     For amounts of five fifteen thousand dollars ($5,000) ($15,000) or less, the
40procedures specified by a written policy as developed by the Board of
41Directors of the North Carolina Partnership for Children, Inc.
42(2)     For amounts greater than five fifteen thousand dollars ($5,000) ($15,000) but
43less than fifteen twenty-five thousand dollars ($15,000), ($25,000), three
44written quotes.
45(3)     For amounts of fifteen twenty-five thousand dollars ($15,000) ($25,000) or
46more but less than forty thousand dollars ($40,000), a request for proposal
47process.process with solicitation in appropriate venues, including, but not
48limited to, websites, major newspaper portals, or other options to ensure a
49strong competitive process.
50(4)     For amounts of forty thousand dollars ($40,000) or more, a request for
51proposal process and advertising in a major newspaper."
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1
2 PART VI. EFFECTIVE DATE
3SECTION 6.1. Except as otherwise provided, this act becomes effective July 1,
4 2026.
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