Bipartisan child care bill targets workforce pipeline, insurance costs

North Carolina lawmakers are advancing a bipartisan child care bill aimed at expanding the early childhood workforce and strengthening provider support to address the root causes of the current child care shortage.

House Bill 1086, Child Care Initiative Funds/Reform/Study, would allocate approximately $17 million to support workforce training, mental and behavioral health services, and regulatory changes for child care providers. 

The bill received a favorable committee substitute on May 12 and was re-referred to the House Appropriations Committee.

State Rep. Dean Arp, R-Union, one of the bill’s primary sponsors, said the legislation is the “result of a lot of stakeholders working on a critical and incredibly important area of child care.”

“This is a continuing work that we’ve undertaken to help make the child care situation better,” Arp said. “This bill has been supported by the child care business centers and owners, the YMCA, the North Carolina Chamber, the community colleges, and the North Carolina Partnership for Children and Smart Start. So we’ve got a good bill here.”

The bill is sponsored by state Reps. Arp; Donny Lambeth, R-Forsyth; Erin Paré, R-Wake; and Heather Rhyne, R-Lincoln, with a long list of Republican and Democratic co-sponsors.

The measure comes as North Carolina continues to grapple with child care shortages, high family costs, and staffing challenges for providers. 

A February 2025 NC Chamber Foundation report estimated that insufficient child care availability costs North Carolina $5.65 billion in lost economic activity each year. This includes $1.36 billion in lost tax revenue, $2.68 billion in employee turnover costs, and $1.61 billion in absenteeism costs. 

“What this bill does is create a career-ready lead teacher program that expands the child care academies, that allows workforce development and talent development,” Arp said. “This also provides funding for mental and behavioral services for children and families, staff, and child care facilities.”

Under the bill, the North Carolina Partnership for Children and the North Carolina Community Colleges System Office would launch a two-year pilot to expand child care workforce academies. Ten new local Smart Start partnerships would be established, including one from each state region.

The academies would target people with no prior child care experience or education, but an interest in the field. Training, health screenings, background checks, and fingerprinting would be provided free of charge to applicants. Graduates would receive a North Carolina Early Childhood Credential, letting them work as lead teachers immediately.

HB 1086 would also create a Provisional Early Childhood Credential for 16- and 17-year-olds preparing to work in licensed child care programs. This credential would allow them to work as group leaders in out-of-school and summer programs. At 18 and having earned a high school diploma, they could request a full North Carolina Early Childhood Credential and become lead teachers in licensed child care programs.

State Rep. Tracy Clark, D-Mecklenburg, praised the bill during committee discussion.

“As a mother who relied on child care for a decade, this is critical,” Clark said. “We have a child care crisis, and I applaud all bill sponsors for this work.”

The largest appropriation in the bill is $15 million in nonrecurring ARPA Temporary Savings Fund money for the Department of Health and Human Services’ Division of Child Development and Early Education. The funds would help expand mental and behavioral health services for children, families, and staff in child care and out-of-school programs. 

In addition to efforts to improve staffing, HB 1086 directs the Department of Insurance to study whether North Carolina should offer liability insurance for child care providers by reviewing models such as state-supported captive insurance, risk pooling, joint underwriting, joint reinsurance, or similar arrangements.

“We’ve looked at what makes child care difficult,” Arp said. “Part of that is insurance requirements, and so we’re looking at establishing a fund that may be like a captive insurance fund to look at reducing the insurance cost of child care facilities.”

If enacted, HB 1086 would take effect July 1, 2026.