North CarolinaHB 4122025-2026 SessionHouseWALLET

AN ACT TO DECOUPLE THE CHILD CARE RATED LICENSE SYSTEM AND SUBSIDIZED CHILD CARE SUBSIDY REIMBURSEMENT RATES AND TO MAKE OTHER CHILD CARE REGULATORY REFORMS.

Sponsored By: Dean Arp (Republican), Donny Lambeth (Republican), Erin Paré (Republican), Heather H. Rhyne (Republican)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

10 provisions identified: 6 benefits, 0 costs, 4 mixed.

Emergency rules for school-age care

Beginning July 1, 2025, during a declared emergency that requires remote learning, care for school-age children under this law is not treated as regular child care. Programs licensed before the emergency are deemed licensed during it, even if they expand capacity. They must keep the required staff-child ratios.

Facility and space rules for child care

Beginning July 1, 2025, centers must provide at least 25 square feet of indoor space per child and 200 cubic feet of air per child during rest. Outdoor rules cannot require more than 75 square feet per child; programs open only 6:00 P.M.–6:00 A.M. do not need outdoor areas. Buildings must meet the State Building Code, and most centers get an annual fire inspection. School buildings that already serve the same students are deemed to meet many facility standards; school playgrounds and fields count, with a note if they miss licensing standards. The state also allows multiunit and shared-space centers and licenses by square footage, and clarifies who is a center (3+ preschoolers or 9+ school-age) or a family home (3–10 children). A workgroup will recommend ways to align building, fire, and sanitation rules.

Plan to separate ratings from subsidies

Beginning July 1, 2025, the state starts a process to split quality ratings from subsidy rules and payments. The Division must finish a new market rate study by May 1, 2026, showing options not tied to star ratings. The Division must send a decoupling plan by May 1, 2026. No new reimbursement rates take effect unless both the federal ACF and the General Assembly approve them. Current subsidy rules stay in place until both approvals happen.

Staffing ratios and teacher rules tighten

Beginning July 1, 2025, the Commission sets staff-child ratios and group sizes at least as strict as past rules. A lead teacher can plan activities for no more than two groups. If covering two groups, another staff member must be in credential training. Administrators must be at least 21 and hold the administration credential or equivalent. Lead teachers must have the early childhood credential, enroll within six months and finish in 18 months, or show five years of licensed teaching experience. Staff counted in ratios must be at least 16, and staff under 18 must be supervised on-site by credentialed staff.

Make child care rules consistent statewide

Beginning July 1, 2025, the Child Care Commission must update rules so this law is applied the same way everywhere. The Commission must also standardize how exemptions for school-age programs are applied.

Military-certified family child care exemption

Beginning July 1, 2025, off-base family child care homes with a current DOD or Coast Guard certificate and completed federal background checks are exempt from State licensure. They must care only for DOD-eligible children, register with the State, and the military must update the registry each quarter and on changes. If certification is suspended or abuse is substantiated, the operator can lose State licensure eligibility and be listed on the Child Maltreatment Registry.

New rating tool for after-school programs

Beginning July 1, 2025, the Weikart Youth Program Quality Assessment is added to rate out-of-school programs for star ratings. The Division must finish a crosswalk and make it available within one year after the law.

Easier credential paths for child care workers

Beginning July 1, 2025, the Division gives credit for community college continuing education the same as matching curriculum courses. The state creates a School Age/Out-of-School Care Credential by December 1, 2025, with a matching course. When QRIS is updated, five years of licensed work experience counts the same as the early childhood credential for star ratings.

Study group on child care liability insurance

Beginning July 1, 2025, the Insurance Commissioner forms a workgroup to study group liability insurance for child care providers. The group includes insurers, provider groups, and State agencies. It must report options to lower premiums and any tort reform ideas by January 1, 2026.

New safety code for family child care homes

Beginning July 1, 2025, family child care homes in dwellings are treated as Residential Group R-3 until permanent rules take effect. Care rooms must be on the level of exit discharge and within 40 feet of a 2A:10B:C fire extinguisher. Homes must keep a Fire Safety, Evacuation, and Lockdown Plan and have carbon monoxide and smoke alarms per code. The Residential Code Council and Building Code Council must adopt matching permanent rules.

Sponsors & Cosponsors

Cosponsors

William D. Brisson
Republican • House
Todd Johnson
Republican • Senate
Donnie Loftis
Republican • House
Jeffrey C. McNeely
Republican • House
Larry C. Strickland
Republican • House
Bill Ward
Republican • House