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Bill Summary · HB 426

Summary — HB 426: Workforce Diploma Program (North Carolina)

Status: Reported Favorably (Introduced Mar 17, 2025) — Enacted effective July 1, 2025
Primary sponsor: Rep. Cotham

Main purpose

Establish a two‑year Workforce Diploma Program administered by the NC Community Colleges System Office (System Office) to help adults (21+) without a high school diploma obtain a diploma and work‑aligned skills and credentials. The System Office will contract with qualified third‑party providers to operate statewide program variants.

Key provisions

  • Program term: Fiscal years 2025–2026 and 2026–2027.
  • Administration: Community Colleges System Office contracts separately with each qualifying third‑party entity to administer a statewide version.
  • Eligibility: Adults age 21+, North Carolina residents, who have not earned a high school diploma or equivalent.
  • Qualifying third‑party entity requirements:
    • In past 5 years administered at least 3 statewide adult high‑school diploma programs outside NC;
    • For those programs, maintained at least a 50% graduation rate (two‑year cohort beginning with second cohort);
    • Accredited by an external regional accrediting agency;
    • Offers a course catalog aligning with NC high‑school diploma curriculum requirements.
  • Program design requirements (minimum elements):
    • Competency‑based course(s) leading to a high‑school diploma tied to an occupation or occupational cluster;
    • Employment support (resume help, mock interviews), career advising, mentoring, milestone tracking;
    • Academic intake assessments, transcript evaluations, remediation in literacy/numeracy;
    • Preparation for workforce credentials, employability skills certification that includes U.S. DOL “Skills to Pay the Bills” standards;
    • 24/7 access to online tutoring.
  • Funding and performance payments:
    • Total appropriation: $5,000,000 (nonrecurring) for FY 2025‑26; funds remain available through end of FY 2026‑27.
    • Per‑participant payments tied to milestones, capped at $7,500 per participant:
    • $275 per half‑credit completed;
    • $275 for an employability skills certification (equivalent to one credit);
    • $275 for an industry credential requiring ≤50 hours;
    • $550 for credential 51–100 hours;
    • $825 for credential >100 hours;
    • $1,100 upon attainment of a high‑school diploma.
    • Up to $100,000 of the appropriation may fund one FTE at the System Office to administer the Program.
  • Reporting:
    • Interim report due Aug 15, 2026; final report due Aug 15, 2027 to the Joint Legislative Education Oversight Committee and Fiscal Research Division.
    • Required metrics: number of participants; credits earned; employability certifications; workforce credentials by type; number and percentage receiving diplomas; average funding per diploma recipient.

Who is affected

  • Primary beneficiaries: Adult North Carolina residents (21+) without a high‑school diploma.
  • Program operators: Community Colleges System Office and contracted qualifying third‑party entities.
  • Employers and workforce partners: receive workers with diplomas, employability and industry credentials.
  • State budget: $5 million nonrecurring appropriation (FY25‑26) and up to $100,000 for one administrative FTE.

Timeline and procedural notes

  • Program authorized for two fiscal years (2025–26 and 2026–27).
  • Appropriation allocated in FY 2025‑26; funds remain available through FY 2026‑27.
  • Interim and final program impact reports due Aug 15, 2026 and Aug 15, 2027.
  • System Office must execute contracts with qualifying third‑party providers before program delivery.

Potential impacts (summary)

  • Creates an incentivized, milestone‑driven funding model to expand adult diploma attainment linked to workforce credentials.
  • Encourages competency‑based, employment‑oriented pathways for adults lacking diplomas.
  • Uses a limited, nonrecurring appropriation—scale, enrollment capacity and long‑term sustainability will depend on provider capacity and future funding decisions.

For more detail, see the bill text for full definitions, provider qualifications, payment structure, and reporting requirements.

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

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