Includes whereas clauses.

Section 1

Appropriates $90,250,000 in recurring funding for the 2025-27 biennium, from the General Fund, to the Department of Health and Human Services (DHHS), Division of Child Development and Early Education (Division), to continue implementing the prekindergarten program (NC Pre-K) and requires that the funds to be used to increase the number of slots available to 10,000 over the next three years, as specified. Sets out provisions for determining eligibility for the program. Requires the sites established under this section to have a 4 or 5 star rating. Allows the Division to use up to 3% of the funds for administrative expenses.

Appropriates from the Economic Development Reserve Fund and available ARPA funds to the Division, $6.8 million in recurring funds for each year of the 2025-27 biennium for a grant program for childcare facilities in census tracts where the ratio of children under age 5 to care providers exceeds 3:1. Sets out the amounts of the grants based on the number of children at the facility. Require a 15% grant match by recipients and requires them to commit to provide the service for at least five years. Requires $350,000 of the funds in each fiscal year to be used to employ a full-time program manager and allows $250,000 to be used for technical assistance.

Requires the Division to coordinate with other DHHS divisions to modernize inspection standards for childcare centers. Requires biannual inspections for 4- and 5-star childcare centers and an electronic checklist system for providers. Requires inspection standards to include reasonable space requirements (indoor and outdoor) and allow for expedited review for expansions by providers with three or more years in good standing. Requires these modernized standards to be implemented over 18 months. Requires the Division to use funds available to it to implement this requirement.

Appropriates $9,562,500 in recurring funds from the General Fund to the Division and $3,187,500 from the North Carolian Education Fund, for the 2025-27 biennium for a grant program for after school program in public school where more than 50% of the students receive free or reduced lunch. Requires the programs to operate at least three hours a day/5 days a week and provide academic support and transportation. Allows charging students a fee based on family income. Requires the Division to work with the Department of Public Instruction (DPI) to establish administrative guidelines for the program and in reporting on attendance and improvement in academic outcomes. Requires the report to be made to DHHS, DPI, and specified NCGA entries. Allows $400,000 to be used each fiscal year to employ program coordinators and a full-time director.

Section 2

Requires the maximum gross annual income for initial eligibility for subsidized child care to be based on the percentage of the federal poverty level as follows: (1) for age 0-5, 300%; and (2) for age 6-12, 133%. Requires fees for families required to share in child care costs to be based on 7% of gross family income. Gives priority to foster children, children with disabilities, and homeless children.

Requires the Division to use available funds from the Child Care and Development Fund to implement the specified scale for determining childcare subsidy eligibility for 2026-27.

Allows, for each year of the 2025-27 biennium, a taxpayer with children under age 6 and an income between 300-400% of the federal poverty level, a deduction of $1,500 for each qualifying child. Increase the deduction by the specified amounts for children with disabilities, infants, and children in a childcare desert.

Appropriates $22.9 million for the 2025-27 biennium from the General Fund to DHHS for on-site childcare providers to construct and renovate childcare facilities and provide childcare subsidies to employees; limits funds to providers with 10 or more employees.

Section 3

Appropriates $950,000 in recurring funds for each year of the 2025-27 biennium from the General Fund and the Child Care and Development Fund to the Division to enhance the pay of educators in licensed childcare facilities. Sets out the amount of the supplement based on educational levels and pays an additional supplement for infant-toddler specialization, bilingual certification, and rural locations.

Require the Division to implement 5-star rating system reforms by reducing documentation required to be submitted on a biannual basis; incorporate classroom assessment tools, such as CLASS and ERS; streamline staff qualification verifications; and increase subsidy reimbursement differentials.

Appropriates $1.8 million for 2025-26 from the General Fund and the Child Care and Development Fund, to the Division to administer a mentorship program for childcare providers seeking a star-level increase. Sets out requirements for mentors.

Section 4

Appropriates $2.8 million for each year of the 2025-27 biennium from the General Fund and the Child Care and Development Fund to the Division for retention bonuses to full-time childcare facility employees in licensed facilities. Sets out the amount of the bonus based on years of service.

Appropriates $2.8 million for each year of the 2025-27 fiscal biennium from the General Fund and Child Care and Development Fund to the Division to administer a professional development program for childcare workers, including specific topic and an online tracking and verification system.

Appropriates $9 million in recurring funds for each year of the 2025-27 biennium from the General Fund and Child Care and Development Fund to the Division to expand T.E.A.C.H. scholarships and sets amounts based on the degree; requires recipients to commit to continued employment in a childcare facility for at least one year.

Requires the Division to develop and administer an apprenticeship program for individuals desiring to work in the childcare industry. Sets out requirements for hours of experience, technical instruction, wages, and duration.

Section 5

Appropriates $5 million in recurring funds for each year of the 2025-27 fiscal year from the General Fund to the Division to enter into public-private partnerships with childcare facility owners to construct and renovate facilities, purchase equipment and materials, provide professional development, and provide quality enhancement projects. Sets out matching requirements.

Requires the Division to collaborate with DPI in in administering a grant program to expand school-based care facilities; defines eligible projects. Requires the Division to establish 12 regional hub-and-spoke support networks for family childcare. Requires the networks to share administrative services such as billing and enrollment, substitute pool management, bulk purchasing, professional development, business coaching and support, and quality improvement assistance. Requires this to be funded by using available funds from Child Care and Development Fund and funds from the General Fund appropriated for this purpose.

Requires the Division to develop and administer a universal Pre-K pilot program in 5 counties, one urban with a population of less than 500,000; two suburban with a population of 100,000 or more but less than 500,000; and two rural counties with a population of less than 100,000, to provide for universal eligibility of all 4 years olds in the State; a mixed delivery system of public schools, Head Start, and private childcare centers; a full day of 6 hours or more required; standardized quality requirements across setting; and a common enrollment system. Requires the program to be funded with funds from the General Funds with a match of 15% from the participating counties.

Section 6

Requires the Division to give 20% of the additional subsidy money provided in this act to parents of infants and toddlers in childcare. Also requires using funds to fund one family engagement navigator in each county and for a database of all ECE professionals. Requires this program to be funded by the General Fund and the Child Care and Development Fund.

Requires the Division to implement a program to assist businesses providing childcare, that includes fast tracking licensure with a 14-day review for employer sponsored centers; tax credits of at least $1,000 per employee for proving flexible work hours; and regional childcare coordinators.

Section 7

Effective July 1, 2025.