GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 3
HOUSE BILL 412
Committee Substitute Favorable 4/8/25
Third Edition Engrossed 4/15/25
Short Title: Child Care Regulatory Reforms. (Public)
Sponsors:
Referred to:
March 18, 2025
*H412 -v-3*
A BILL TO BE ENTITLED 1
AN ACT TO DECOUPLE T HE CHILD CARE RATED LICENSE SYSTEM AND 2
SUBSIDIZED CHILD CARE SUBSIDY REIMBURSEM ENT RATES AND TO MAK E 3
OTHER CHILD CARE REGULATORY REFORMS. 4
The General Assembly of North Carolina enacts: 5
6
PART I. DECOUPLE RATED LICENSE AND SUBSIDIZED CHILD CARE 7
SECTION 1.(a) The General Assembly recognizes the need to balance maintaining 8
critical health, safety, and welfare standards for child care, as well as a well-established rating 9
system used for informational purposes, with the need to move toward maximizing State funds 10
for child care and increasing the supply of child care from State-funded sources. The General 11
Assembly further recognizes the importance of weighing the need to decrease the cost of child 12
care through deregulatory actions and at the same time maintain child care subsidy 13
reimbursement rates. The purpose of this provision, in part, is to encourage the business 14
community to partner with the State in achieving this goal. 15
SECTION 1.(b) To that end, by May 1, 2026, the Department of Health and Human 16
Services, Division of Child Development and Early Education (Division), shall develop a 17
proposed plan to separate the quality rating improvement system (QRIS) from the requirements 18
and payments for participation in the State-subsidized child care program using the market rate 19
study required by Section 1(c) of this act and make recommendations on implementation of the 20
plan while meeting the federal Child Care and Development Fund requirements. The Division 21
shall submit the proposed plan to the chairs of the House and Senate Appropriations Committees, 22
the chairs of the House and Senate Appropriations Committees on Health and Human Services, 23
the Joint Legislative Oversight Committee on Health and Human Services, and the Fiscal 24
Research Division by May 1, 2026. The current plan will stay in full force and effect until such 25
time as the General Assembly first approves and adopts the proposed plan and any amendments 26
to that plan and then the federal government approves the proposed plan and any amendments. 27
SECTION 1.(c) The Division shall complete a new market rate study by May 1, 28
2026. This market rate study shall be made available to the public by May 1, 2026. The Division 29
shall ensure that the market rate study includes potential rates that are not segmented by 30
star-rating and new market rates for the QRIS system. The Division shall not implement new 31
reimbursement rates unless approved by the federal Administration of Children and Families and 32
authorized to do so by the General Assembly. 33
SECTION 1.(d) Nothing in this section shall be construed as impacting the 34
star-rating requirements for the NC Prekindergarten (NC Pre-K) program. 35 General Assembly Of North Carolina Session 2025
Page 2 House Bill 412-Third Edition
1
PART II. REGULATORY CHANGES 2
SECTION 2. G.S. 110-86(5a) reads as rewritten: 3
"(5a) Lead teacher. – An individual who is responsible for planning and 4
implementing the daily program of activities for a group no more than two 5
groups of children in a child care facility." 6
SECTION 5.(a) G.S. 110-91 reads as rewritten: 7
"§ 110-91. Mandatory standards for a license. 8
All child care facilities shall comply with all State laws and federal laws and local ordinances 9
that pertain to child health, safety, and welfare. Except as otherwise provided in this Article, the 10
standards in this section shall be complied with by all child care facilities. However, none 11
Notwithstanding any provision of law or rule to the contrary, any building and grounds which 12
are currently approved for school occupancy and which house a public or private elementary or 13
middle school shall be deemed to have met the space and equipment, sanitation, fire, and building 14
code requirements for a licensed child care facility when the building and grounds are serving 15
the same, or a subset of the same, school-age children in an out-of-school child care program. 16
None of the standards in this section apply to the school-age children of the operator of a child 17
care facility but do apply to the preschool-age children of the operator. Children 13 years of age 18
or older may receive child care on a voluntary basis provided all applicable required standards 19
are met. The standards in this section, along with any other applicable State laws and federal laws 20
or local ordinances, shall be the required standards for the issuance of a license by the Secretary 21
under the policies and procedures of the Commission except that the Commission may, in its 22
discretion, adopt less stringent standards for the licensing of facilities which provide care on a 23
temporary, part-time, drop-in, seasonal, after-school or other than a full-time basis. 24
… 25
(6) Space and Equipment Requirements. – There shall be no less than 25 square 26
feet of indoor space for each child for which a child care center is licensed, 27
exclusive of closets, passageways, kitchens, and bathrooms, and this floor 28
space shall provide during rest periods 200 cubic feet of airspace per child for 29
which the center is licensed. There shall be adequate outdoor play area for 30
each child under rules adopted by the Commission which shall be related to 31
the size of center and the availability and location of outside land area. In no 32
event shall the minimum required exceed 75 square feet per child. The outdoor 33
area shall be protected to assure the safety of the children receiving child care 34
by an adequate fence or other protection. A center operated in a public school 35
shall be deemed to have adequate fencing protection. A center operating 36
exclusively during the evening and early morning hours, between 6:00 P.M. 37
and 6:00 A.M., need not meet the outdoor play area requirements mandated 38
by this subdivision. 39
Each child care facility shall provide indoor area equipment and 40
furnishings that are child size, sturdy, safe, and in good repair. Each child care 41
facility that provides outdoor area equipment and furnishings shall provide 42
outdoor area equipment and furnishings that are child size, sturdy, free of 43
hazards that pose a threat of serious injury to children while engaged in normal 44
play activities, and in good repair. The Commission shall adopt standards to 45
establish minimum requirements for equipment appropriate for the size of 46
child care facility. Space shall be available for proper storage of beds, cribs, 47
mats, cots, sleeping garments, and linens as well as designated space for each 48
child's personal belongings. 49
The Division of Child Development of the Department of Health and 50
Human Services shall establish and implement a policy that defines any 51 General Assembly Of North Carolina Session 2025
House Bill 412-Third Edition Page 3
building which is currently approved for school occupancy and which houses 1
a public or private elementary or middle school to include the playgrounds 2
and athletic fields as part of the school building when that building is used to 3
serve school-age children in after-school out-of-school child care programs. 4
Playgrounds and athletic fields referenced in this section that do not meet 5
licensure standards promulgated by the North Carolina Child Care 6
Commission shall be noted on the program's licensure and rating information. 7
…." 8
SECTION 5.(b) The Child Care Commission shall adopt or amend any rules to 9
ensure uniformity and consistency in application of the exemptions for school-age children in 10
out-of-school child care programs as provided in this section. 11
SECTION 6. G.S. 110-91(7)a. reads as rewritten: 12
"a. The Commission shall adopt rules for child care centers regarding 13
staff-child ratios, group sizes and multi-age groupings other than for 14
infants and toddlers, provided that these rules shall be no less stringent 15
than those currently required for staff-child ratios as enacted in Section 16
156(e) of Chapter 757 of the 1985 Session Laws. Each lead teacher 17
shall support no more than two groups. 18
1. Except as otherwise provided in this subdivision, the 19
staff-child ratios and group sizes for infants and toddlers in 20
child care centers shall be no more than as follows: 21
Age Ratio Staff/Children Group Size 22
0 to 12 months 1/5 1015 23
12 to 24 months 1/6 1218 24
2 to 3 years 1/10 20. 25
No child care center shall care for more than 25 children in one 26
group. Child care centers providing care for 26 or more 27
children shall provide for two or more groups according to the 28
ages of children and shall provide separate supervisory 29
personnel and separate identifiable space for each group. 30
1a. If a child care center is operating under voluntary enhanced 31
requirements, the maximum group size for toddlers aged 2 to 32
3 years may be increased from 18 to 20 children when the child 33
care center maintains a 1/9 staff-child ratio. 34
1b. If a child care center is operating under the highest voluntary 35
enhanced requirements, the child care center may use the 36
following maximum group sizes for infants and toddlers when 37
the child care center maintains staff-child ratios as provided 38
herein: 39
Age Ratio Staff/Children Group Size 40
0 to 12 months 1/4 12 41
12 to 24 months 1/5 15 42
2 to 3 years 1/8 20. 43
…." 44
SECTION 7. G.S. 110-91(8) reads as rewritten: 45
"(8) Qualifications for Staff. – Qualifications for child care staff are as follows: 46
a. All child care center administrators shall be at least 21 years of age. 47
All child care center administrators shall have the North Carolina 48
Early Childhood Administration Credential or its equivalent as 49
determined by the Department. All child care administrators 50
performing administrative duties as of the date this act becomes law 51 General Assembly Of North Carolina Session 2025
Page 4 House Bill 412-Third Edition
and child care administrators who assume administrative duties at any 1
time after this act becomes law and until September 1, 1998, shall 2
obtain the required credential by September 1, 2000. Child care 3
administrators who assume administrative duties after September 1, 4
1998, shall begin working toward the completion of the North Carolina 5
Early Childhood Administration Credential or its equivalent within six 6
months after assuming administrative duties and shall complete the 7
credential or its equivalent within two years after beginning work to 8
complete the credential. Each child care center shall be under the 9
direction or supervision of a person meeting these requirements. All 10
staff counted toward meeting the required staff-child ratio shall be at 11
least 16 years of age, provided that persons younger than 18 years of 12
age work under the direct supervision of a credentialed staff person 13
who is at least 21 years of age. 14
b. All lead teachers in a child care center shall have at least a North 15
Carolina Early Childhood Credential or its equivalent as determined 16
by the Department. Lead teachers shall either (i) be enrolled in the 17
North Carolina Early Childhood Credential coursework or its 18
equivalent as determined by the Department within six months after 19
becoming employed as a lead teacher or within six months after this 20
act becomes law, whichever is later, and shall complete the credential 21
or its equivalent within 18 months after enrollment.enrollment or (ii) 22
have a minimum of five years of documented experience teaching in a 23
licensed child care facility in this State which shall be deemed 24
equivalent to the North Carolina Early Childhood Credential. 25
c. Only administrators and lead teachers in licensed child care centers are 26
required to have a North Carolina Early Childhood Credential or its 27
equivalent as determined by the Department. All other staff shall meet 28
the standards established by the Commission for their positions that do 29
not include a North Carolina Early Childhood Credential or its 30
equivalent as determined by the Department. 31
d. For child care centers licensed to care for 200 or more children, the 32
Department, in collaboration with the North Carolina Institute for 33
Early Childhood Professional Development, shall establish categories 34
to recognize the levels of education achieved by child care center 35
administrators and teachers who perform administrative functions. 36
The Department shall use these categories to establish appropriate 37
staffing based on the size of the center and the individual staff 38
responsibilities. 39
e. Effective January 1, 1998, an operator of a licensed family child care 40
home shall be at least 21 years old and have a high school diploma or 41
its equivalent. Operators of a family child care home licensed prior to 42
January 1, 1998, shall be at least 18 years of age and literate. Literate 43
is defined as understanding licensing requirements and having the 44
ability to communicate with the family and relevant emergency 45
personnel. Any operator of a licensed family child care home shall be 46
the person on-site providing child care. 47
f. The Commission shall adopt standards to establish appropriate 48
qualifications for all staff in child care centers. These standards shall 49
reflect training, experience, education and credentialing and shall be 50
appropriate for the size center and the level of individual staff 51 General Assembly Of North Carolina Session 2025
House Bill 412-Third Edition Page 5
responsibilities. It is the intent of this provision to guarantee that all 1
children in child care are cared for by qualified people. Pursuant to 2
G.S. 110-106, no requirements may interfere with the teachings or 3
doctrine of any established religious organization. The staff 4
qualification requirements of this subdivision do not apply to 5
religious-sponsored child care facilities pursuant to G.S. 110-106." 6
SECTION 7.5. Caregivers for children aged 0 to 24 months shall meet the Federal 7
Child Care and Development Block Grant health and safety standards as well as the provisions 8
contained in the following North Carolina Child Care Commission rules: 9
(1) 10A NCAC 09 .0511-"Daily Routines for Children Under Two Years of Age". 10
(2) 10A NCAC 09 .1801-"Supervision in Child Care Centers". 11
(3) 10A NCAC 09 .1802-"Staff/Child Interactions". 12
For the care of children aged 0-24 months, child care center operators shall have the 13
option to either employ a lead teacher or a caregiver meeting the standards set forth in this section. 14
SECTION 8. Section 8 of S.L. 2024-34 is amended by adding a new subsection to 15
read: 16
"SECTION 8.(a1) In modifying the quality rating improvement system (QRIS), the Division 17
of Child Development and Early Education shall ensure a North Carolina Early Childhood 18
Credential based on five years of work experience in a licensed child care facility in this State is 19
treated as equivalent to when that credential is earned through other pathways for purposes of 20
awarding a star-rating." 21
SECTION 9. The Weikart Youth Program Quality Assessment ("Weikart Program") 22
shall be added as an assessment tool for evaluating out-of-school child care programs and 23
awarding of a star-rating. The Department of Health and Human Services, Division of Child 24
Development and Early Education, shall complete the necessary crosswalk evaluation of the 25
Weikart Program and have it available for applicants to use not later than one year after the date 26
this act becomes law. 27
SECTION 10. Notwithstanding any other provision of law, rule, or regulation, the 28
Department of Health and Human Services, Division of Child Development and Early Education 29
(Division), shall, for courses offered by a community college in the North Carolina Community 30
Colleges System (NCCCS), assign credit for continuing education courses on the same basis as 31
curriculum courses designated by NCCCS as equivalent to the continuing education courses for 32
the purpose of providing any credential offered by the Division. 33
SECTION 11. The Department of Health and Human Services, Division of Child 34
Development and Early Education, shall: 35
(1) Not later than December 1, 2025, and in consultation with the North Carolina 36
Community Colleges System, create a North Carolina School 37
Age/Out-of-School Care Credential that aligns with a new curriculum course 38
and continuing education course entitled "Introduction to School Age Care 39
and Education." 40
(2) Award the North Carolina Early Childhood Administration Credential or the 41
North Carolina Family Child Care Credential to individuals who have 42
successfully completed continuing education courses that are equivalent to 43
child care curriculum courses, as determined by the Community Colleges 44
System. The Community Colleges System shall ensure that the continuing 45
education courses are comparable to the corresponding curriculum courses in 46
course descriptions, competencies, and hour requirements and shall state the 47
credential that is to be awarded for each continuing education course. 48
SECTION 12.(a) The Commissioner of the Department of Insurance shall establish 49
a workgroup to examine the potential for developing group liability insurance plan opportunities 50 General Assembly Of North Carolina Session 2025
Page 6 House Bill 412-Third Edition
for all child care providers. The workgroup shall consist of representatives from all of the 1
following: 2
(1) The Department of Insurance. 3
(2) The insurance industry. 4
(3) The child care industry, including foster family homes and out-of-school 5
providers. 6
(4) The Department of Health and Human Services, Division of Child 7
Development and Early Education. 8
(5) The American Tort Reform Association. 9
SECTION 12.(b) The workgroup shall develop findings and recommendations 10
related to at least the following: 11
(1) Potential methods for creating group liability insurance plan opportunities for 12
all child care providers. 13
(2) Reforms that could reduce group liability insurance plan premiums. 14
(3) Tort reforms that could reduce the liability damages of child care providers. 15
SECTION 12.(c) By January 1, 2026, the Department of Insurance shall report the 16
findings and recommendations of the workgroup to the Joint Legislative Oversight Committee 17
on Health and Human Services, the Joint Legislative Oversight Committee on General 18
Government, and the Fiscal Research Division. 19
SECTION 13. The Child Care Commission shall adopt or amend any rules to ensure 20
uniformity and consistency in application of the provisions of this act. 21
22
PART III. EFFECTIVE DATE 23
SECTION 14. This act is effective when it becomes law. 24