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HB 877

Education, Dept. of - As introduced, extends the school turnaround pilot program for priority schools that is scheduled to conclude at the end of the 2024-2025 school year to a permanent school turnaround program for priority schools to be administered by the department; increases, from five to 15, the maximum number of priority schools that may participate in the school turnaround program. - Amends TCA Title 49, Chapter 6.

114th Regular Session (2025-2026)

Establish a state-supported, below-market childcare pilot using public land to attract operators, with priority slots for state employees and strict wage/benefit requirements.

P2C, ref. to Education Committee
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Bill Summary · HB 877

HB 877 — Childcare Pilot (North Carolina) — Summary

Purpose

Establish a pilot public‑private partnership (P3) to create a state‑supported, below‑market childcare facility by leveraging publicly owned land/buildings and a one‑time state capital allocation. The goal is to lower upfront capital costs, expand affordable childcare capacity, and enable more parents to enter/re‑enter the workforce.

Key provisions

  • Directs the Legislative Services Office (LSO), working with the State Construction Office and Dept. of Administration, to develop a process for a demonstration P3 childcare project:
    • Process due by October 15, 2025.
    • Initial Request for Proposals (RFP) to be issued no later than January 2, 2026.
  • Site selection:
    • LSO to select a site on State‑ or University‑owned land suitable for a shell building; a UNC constituent institution in the same county may be invited to partner by contributing a site and/or funds.
    • Ground lease terms: not to exceed $500/month; preferred initial term ≥ 10 years with potential renewals of ≥ 4 years.
  • Operator responsibilities and selection criteria (minimums):
    • Commit to childcare rates at least 25% below current local market rates, using a modified pro forma that excludes land, site, shell, and construction interest costs.
    • Operate a facility licensed under Chapter 110 and enroll at least 180 children.
    • Pay all childcare providers at least 180% of the federal minimum wage (as of Jan 1, 2025) in year one, and increase wages by at least 2.5% annually for the first four years—without raising consumer rates during that four‑year period.
    • Provide health insurance for all full‑time employees with the employer paying ≥ 50% of premiums for a plan that meets small group minimum requirements.
    • Reserve priority placement for 80% of available slots for State employees (including employees of a partnering UNC institution).
  • Operator bears costs to upfit the shell building, maintenance, utilities, and ongoing operating expenses.

Financial provisions & timeline

  • Appropriation: $5,000,000 in nonrecurring General Fund dollars to the LSO for the 2025–2026 fiscal year for the pilot (Section 2). These funds do not revert until July 1, 2027.
  • LSO process deadline: Oct 15, 2025; RFP by Jan 2, 2026.
  • Pilot design intended as a demonstration model to be replicable across counties.

Who is affected

  • Families/children in pilot area (increased access to below‑market childcare).
  • State employees and partnering UNC institution employees (priority placement).
  • Childcare workers (wage and benefits protections).
  • Third‑party childcare operators (required to meet selection/operational criteria).
  • State agencies (LSO, State Construction Office, Dept. of Administration) administering selection and contracting.

Potential impacts and considerations

  • Expected benefits: increased affordable childcare capacity, reduced capital barriers to new facilities, support for workforce participation.
  • Tradeoffs/risks: pilot slots heavily prioritized for State employees (80%), possibly limiting broader public access; sustainability depends on operator performance and continued subsidy/replication funding; operational viability relies on the operator meeting wage and benefit commitments while holding consumer rates steady for four years.
  • Implementation hinges on timely site selection, competitive procurement, and proper oversight of lease and provider performance.

Status / Procedural notes

  • Bill introduced in the 2025 session; directs LSO and other agencies on process and funding.
  • Section 2 (appropriation) becomes effective July 1, 2025; other provisions effective when the act becomes law.

Compiled from official sources — confirm details with the bill’s official record.

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