Child Care Regulatory Reforms.

Establishes a May 1, 2026 deadline for the Department of Health and Human Services to develop a plan separating quality ratings from subsidy payment rates.

Changes how child care centers are reimbursed for subsidized care by removing star-rating requirements from payment calculations, allowing centers to receive market rates regardless of their quality rating.

Updates G.S. 110-91(8) and related sections to clarify that child care centers caring for children aged 0-24 months may employ either a lead teacher or a caregiver meeting specific standards.

Modifies requirements for higher-quality facilities by restricting subsidy payments to four- and five-star-rated centers, with transition periods for counties lacking sufficient high-rated facilities.

Adds provisions allowing religious child care facilities and other licensed centers to receive one-star county market rates or private pay rates when participating in the subsidized program.

Added new Section 7.5 requiring caregivers for children aged 0-24 months to meet specific Federal Child Care and Development Block Grant health and safety standards plus three specific North Carolina Child Care Commission rules regarding daily routines, supervision, and staff-child interactions.

Modified Section 7 to clarify that child care center operators caring for children aged 0-24 months have the option to either employ a lead teacher or a caregiver meeting the newly specified standards.

Removed the 'Short Title' and 'Sponsors' sections from the original bill format, replacing them with amendment-specific documentation including amendment number, page count, and signature lines for committee approval.

Added amendment procedural instructions directing changes to pages 3 and 5 of the bill, including specific line numbers for deletions and rewrites.

New Part I requires the Division of Child Development to create a plan by May 2026 separating quality rating systems from subsidy eligibility and reimbursement rates.

Added specific deadlines requiring a market rate study and proposed plan submission by May 1, 2026, with federal approval requirements for new reimbursement rates.

Updated the definition of 'lead teacher' in G.S. 110-86(5a) to clarify responsibilities for planning daily activities for up to two groups of children.

Removed the original short title 'Child Care Regulatory Reforms' and replaced it with 'Child Care Regulatory Reforms; AND TO MAKE BUILDING CODE REVISIONS' to reflect the expanded scope.

Modified the bill structure to add Part I (Decoupling rated license and subsidized child care) before Part II (Regulatory Changes), reorganizing the legislative approach.

The staff-child ratio language for infants and toddlers was changed from 'no more than' to 'no less stringent more than', creating a grammatical error that could affect how ratio requirements are interpreted and enforced.

The bill version number was updated from H4 to H5, and the edition was changed from Third Edition to Fifth Edition, reflecting the bill's progression through the legislative process.

Committee adoption and final engrossment dates were added, showing the bill was adopted by the Senate Health Care Committee on 5/22/25 and engrossed in Fifth Edition on 6/4/25.

The bill's title and short title were completely rewritten to focus on regulatory reforms and liability insurance workgroup rather than decoupling ratings from subsidies.

New Section 1.2 was added to rewrite G.S. 110-91, updating mandatory standards for child care licenses including space requirements and equipment standards.

Space requirements were modified to clarify that outdoor play areas must be protected with adequate fencing and that centers operating in public schools are deemed to have adequate fencing protection.

New storage requirements were added for beds, cribs, mats, cots, sleeping garments, linens, and designated space for each child's personal belongings.

Staff-child ratios and group size requirements were rewritten with specific numerical standards for different age groups, including maximum group sizes of 10, 12, and 20 children for different age ranges.

The timeline for developing a plan to separate QRIS from subsidy rates (originally due by May 1, 2026) was removed entirely from the bill.

Provisions related to market rate studies for child care subsidies and reimbursement rates were removed from the bill.

New language was added to define how school buildings and their associated playgrounds and athletic fields are treated for child care licensing purposes.

The word 'garments' was corrected from 'garme' in the equipment storage requirements section (line 47), fixing a typographical error in the original text.

Pagination and version numbering were updated from Edition 2 to Edition 3, with page numbers changing from 2 to 3 and version identifier changing from H412-v-2 to H412-v-3.

Removed the requirement that star ratings impact reimbursement rates and added language that the current plan stays in effect until approved by both the General Assembly and federal government.

Added specific deadline of May 1, 2026 for completing a new market rate study and submitting a proposed plan to multiple committees and oversight bodies.

Changed the market rate study requirement from 'submitted in 2026' to 'complete a new market rate study by May 1, 2026' with public availability by the same date.

Added requirement that the market rate study must include potential rates not segmented by star-rating and new market rates for the QRIS system.

Added federal approval requirement, stating the Division cannot implement new reimbursement rates without approval from the federal Administration of Children and Families.

Added provision stating nothing in the section impacts star-rating requirements for the NC Prekindergarten program.

Modified space requirements to clarify that school buildings serving school-age children in out-of-school programs are deemed to meet certain building code requirements.

Changed outdoor play area requirements to allow centers operating exclusively during evening and early morning hours (6 PM to 6 AM) to be exempt from outdoor play area mandates.

Removed previous payment distinctions between one-star facilities and higher-rated facilities, eliminating the prohibition on paying one- or two-star facilities.

Added new definition for 'Lead teacher' in G.S. 110-86(5a) specifying responsibility for planning daily activities for groups of children.