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Read. Follow. Verify.North Carolina Establishes $5 Million Public-Private Childcare Pilot Program for State Employees
Last action · April 10, 2025: Ref to the Com on Appropriations, if favorable, Rules, Calendar, and Operations of the House (House action)Sponsors: Dean Arp and 10 others
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What This Bill Would Do
House Bill 877 establishes a public-private partnership pilot program to lower childcare costs by leveraging state-owned property and $5 million in nonrecurring state funds. The program requires a selected third-party operator to offer childcare rates at least 25% below market value, enroll at least 180 children, pay staff wages starting at 180% of the January 1, 2025 federal minimum wage, provide health insurance, and reserve 80% of capacity for priority placement of state and university employees.
The measure appropriates $5 million from the General Fund for the 2025-2026 and caps the ground lease for the facility at $500 per month for a term of at least 10 years, creating below-market operational conditions in exchange for discounted childcare rates and wage floors for workers.
- State-operated childcare initiatives are frequently proposed by lawmakers to address workforce shortages and high living costs for public employees. context
Who It Would Affect
Groups the bill's text would affect if enacted, as described in the record. Being affected is not a position for or against it.
State employees
State employees receive priority placement for eighty percent of available childcare capacity at the pilot site.
Childcare providers employed by the facility
Workers are guaranteed a starting wage equal to at least 180% of the January 1, 2025 federal minimum wage with guaranteed annual increases, plus employer-subsidized health insurance.
Third-party childcare operators
Operators gain access to state-owned land via a ground lease capped at $500 per month and reduced capital costs in exchange for operating a below-market childcare facility.
Key Facts
- The General Assembly appropriates $5,000,000 in nonrecurring funds from the General Fund to the Legislative Services Office for the 2025-2026 fiscal year to fund the childcare pilot program.
- Appropriated funds will not revert until July 1, 2027.
- The Legislative Services Office, working with the State Construction Office and the Department of Administration, must develop a comprehensive implementation process by October 15, 2025.
- The Legislative Services Office must issue the initial request for proposals no later than January 2, 2026.
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- The ground lease for the facility shall not exceed $500.00 per month, with a preferred initial term of at least 10 years and possible renewals of at least four years.
- The selected third-party operator must provide childcare rates at least 25% below current local market rates by eliminating land, site improvement, utility extension, shell building, and construction loan interest costs.
- The facility must be capable of operating under Chapter 110 of the General Statutes and enrolling at least 180 children.
- Childcare providers employed at the facility must be paid wages equal to at least 180% of the federal minimum wage as of January 1, 2025, for the first year, with an annual increase of at least 2.5% for the first four years without raising consumer rates.
- The operator must provide health insurance for full-time employees, paying at least 50% of premiums for coverage meeting or exceeding small group health benefit plans.
- Eighty percent of available childcare capacity at the site must be reserved on a priority basis for State employees and employees of partnering University of North Carolina constituent institutions.
- Section 2 of the act becomes effective July 1, 2025, and the remainder becomes effective when it becomes law.
Frequently Asked Questions
Who is eligible for priority placement in the childcare facility?
How much will the ground lease cost the selected operator?
What wage requirements are imposed on the childcare facility operators?
What else do you want to know?
News Coverage
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Votes, people, money & the original sourceWhere This Stands
Currently in committee. The next step in the legislative lifecycle is Floor Vote.
Procedural history
3 actions- Apr 10, 2025HouseRef to the Com on Appropriations, if favorable, Rules, Calendar, and Operations of the House
- Apr 10, 2025HousePassed 1st Reading
- Apr 9, 2025HouseIntroducedFiled
Version history
Only one version on file - nothing to compare yet. As later stages (committee substitute, engrossed, enrolled) are captured, the redline appears here.
View official text →Lobbying Activity
No state lobbying filings in our records match this bill. Federal lobbying reports (LDA) cover Congress, so they are not listed on state bills.
Full breakdown
Who this bill affects and the strongest case for and against it, written only from the bill’s own text.
Sponsors
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Discoveries
Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.
Capital Cost Elimination Requirement
The bill mandates that below-market rates are achieved by entirely eliminating land, site improvement, utility extension, shell building, and construction loan interest costs from the operator's pro forma.
Connected Entities
Sources
www.ncleg.gov
Analysis Score
0–100- Significance60How much this matters to a regular citizen
- Controversy15Intensity of disagreement among stakeholders
- Entertainment5Compellingness for a non-policy-wonk reader
- Buzz30Current news / social attention level
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