Conference report makes the following changes to the 5th edition.

Part I.

Adds the following new content, organized as Part I. States legislative intent and purposes. Directs the Department of Health and Human Services (DHHS), Division of Child Development and Early Education (Division) to develop a proposed plan by May 1, 2026, 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 the act and make recommendations on its implementation while meeting the federal Child Care and Development Fund requirements. Requires the Division to report any difference in the proposed plan and the current reimbursement rate. Requires the Division to submit the proposed plan to the specified NCGA committee chairs, committee, and division by May 1, 2026, including an update on the QRIS Modernization rules process under SL 2024-34. Specifies that the current plan is effective until the NCGA and federal government approves and adopts the proposed plan and any amendments.

Directs the Division to complete a new market rate study made available to the public by May 1, 2026. Requires the study to include potential rates that are not segmented by star-rating and new market rates for the QRIS system. Now prohibits implementing new reimbursement rates unless approved by the federal Administration of Children and Families and authorized by the NCGA.

Specifies that the provisions do not affect NC Pre-K star-rating requirements.

Part II.

Organizes previous content into Part II with the following additions and modifications.

Changes the definition of lead teacher in GS 110-86 (definitions pertaining to childcare facilities) to a person responsible for the described activities for no more than two (was, one) groups of children in a childcare facility.

Further amends GS 110-91(6) to eliminate the requirement in existing law to note any playgrounds and athletic fields that do not meet licensure standards of the Child Care Commission on the program's licensure and rating information.

Further amends GS 110-91(7)a (staff/child ratios for childcare centers). Specifies that each lead teacher may support no more than two groups. Adds that where a lead teacher is responsible for two groups, at least one other individual overseeing the group must be engaging in the Early Childhood Credential coursework or seeking job training with the goal of accomplishing the five-year pathway to seek a future Lead Teacher qualification. 

Adds the following.

Enacts GS 110-106.3 to exempt from licensure requirements US Department of Defense (DOD) or US Coast Guard family child care homes providing child care exclusively to children eligible for care under the specified DOD Instruction. Limits the exemption to homes operating outside of military installations for which DOD or the US Coast Guard have issued a certificate to the home to provide child care and completed background screening by the DOD pursuant to federal law and received a favorable suitability and fitness determination. Requires registration with DHHS and deems individuals at each military installation providing oversight of child care homes responsible for registration. Requires DHHS to maintain a registry to ensure compliance with DOD requirements for operation; certification of listed state safety provisions of the home location; receipt of information from the operator confirming operation at their occupied dwelling; and confirmation of appropriate direction of inquiries regarding DOD family child care homes. Provides for quarterly updates of the registry by the respective military installation oversight authority, and immediate notification when the DOD adds or removes a home operating under the section from the registry or closes a home for cause. Provides for license disqualification and revocation for described noncompliance with licensing standards or substantiated evidence of child abuse, neglect, or endangerment, in addition to placement on the Child Maltreatment Registry.

Directs the Division to coordinate with the Child Care Commission to clarify rules governing multiuse child care centers to allow the use of existing building to house multiunit child care centers and include mixed-age centers, and to grant individual licenses within multiunit child care centers based on square footage used by each owner, as specified.

Amends GS 110-98.5(3) which provides that when remote or virtual learning is required because of a state of emergency, care given to school-age children is not considered child care, by adding that if a program was licensed before the state of emergency, it is deemed licensed during the state of emergency whether it expands its capacity to provide services to more children so long as it follows the staff to child ratios for licensure.

Part III.

Adds the following.

Directs the Office of State Fire Marshal, Residential Code Council and Building Code Council (Councils), and State and local governments to treat a family child care home located within a dwelling subject to the Residential Code, Building Code, or Regulations for Manufactured Homes as a Residential Group R-3 occupancy, whereby the building must be permitted to comply with the Residential Code, Building Code, or Regulations for Manufactured Homes if the family child care home meets five respective criteria for each related to exit location, fire extinguishers, safety plans, carbon monoxide detection, and smoke alarms. Directs the Councils to adopt rules to amend the Residential Code and Building Code consistent with this directive, creating a family child care home occupancy classification within dwelling subject to each Code and the Regulations for Manufactured Homes, as specified. Sunsets the provisions when the permanent rules are adopted and become effective.

Amends GS 110-86 to refer to family child care homes as a child care arrangement located in an operator occupied private dwelling (was a residence) under the definition of child care facility.

Makes technical changes to GS 110-91(4) requiring child care facilities to be located in a building that meets requirements of the State Building Code. Specifies that the mandate applies to facilities operated as family child care homes (was operated in a private residence). Amends subdivision (5) (Fire Prevention), deeming the Office of State Fire Marshal rather than the Department of Insurance responsible for establishing fire prevention and safe evacuation requirements for child care facility buildings, as well as their annual inspection. 

Directs the Division to establish the Licensed Childcare Licensure Workgroup (Workgroup) to examine streamlining regulatory requirements related to the physical structures of licensed childcare facilities, consisting of representatives from the nine listed agencies along with other representatives deemed necessary by the Division. Tasks the Workgroup with developing findings and recommendations related to streamlining the regulatory requirements related to the physical structures of childcare facilities, as described, and resolving conflicts between various code requirements for licensed childcare facilities. Requires the Division to report its findings and recommendations to the specified NCGA committees and division by no later than one year after the act becomes law. 

Makes organizational changes. Changes the act's long title.