AN ACT to appropriate funds to increase access to subsidized child care and to study expanding eligibility criteria for child care subsidy to three hundred percent of the federal poverty level.

Whereas, the COVID‑19 pandemic has greatly impacted working families; and

Whereas, child care assistance is important to a child's well‑being; and

Whereas, the provision of child care assistance is important to continue reopening the economy and allowing individuals to return to work; and

Whereas, there are numerous challenges working families face on a daily basis; and

Whereas, the cost of child care is continuing to increase; and

Whereas, North Carolina should commit to expanding eligibility up to three hundred percent (300%) of the federal poverty level as funds become available from the federal government; Now, therefore,

The General Assembly of North Carolina enacts:

SECTION 1.  There is appropriated from the General Fund to the Department of Health and Human Services, Division of Child Development and Early Education, the sum of one hundred eighty million dollars ($180,000,000) in recurring funds for the 2022‑2023 fiscal year to provide funding to expand the number of eligible children served in the child care subsidy program. From funds appropriated under this section, the Division shall allocate the sum of fifty‑eight million dollars ($58,000,000) in recurring funds for the 2022‑2023 fiscal year to cover copays for families eligible for subsidized child care.

SECTION 2.  Section 9C.4 of S.L. 2021‑180 reads as rewritten:

SECTION 9C.4.(a)  The maximum gross annual income for initial eligibility, adjusted annually, for subsidized child care services shall be determined based on a percentage of the federal poverty level as follows:

AGE                                                            INCOME PERCENTAGE LEVEL

0 – 5                                                                                       200%

6 – 12                                                                                     133%

The eligibility for any child with special needs, including a child for any child who is 12 years of age or younger or any child with special needs, including a child who is 13 years of age or older, shall be two hundred percent (200%) of the federal poverty level.

SECTION 9C.4.(b)  Fees for families who are required to share in the cost of care are established based on ten percent (10%) of gross family income. When care is received at the blended rate, the copayment shall be eighty‑three percent (83%) of the full‑time copayment. Copayments for part‑time care shall be seventy‑five percent (75%) of the full‑time copayment. Families receiving subsidized child care services whose gross annual income increases beyond the initial eligibility thresholds set forth in subsection (a) of this section shall share in the cost of care based on a percentage of their gross annual income as follows:

AGE           CHANGE IN GROSS ANNUAL           PARENT CO‑PAY

INCOME/PERCENTAGE LEVEL

0 – 12           Up to 200% of Federal Poverty Level                        0%

85% of State Median Income                                     2.5%

….

SECTION 3.  There is appropriated from the General Fund to the Division of Child Development and Early Education (Division) the sum of two hundred fifty thousand dollars ($250,000) in nonrecurring funds for the 2022‑2023 fiscal year to conduct a feasibility study to plan for and determine the costs associated with expanding eligibility criteria for the child care subsidy program to three hundred percent (300%) of the federal poverty level. In conducting the study, the Division shall consider administrative and technology requirements to serve families with incomes over eighty‑five percent (85%) of the State Median Income. The Division shall submit a report on the study to the Joint Legislative Oversight Committee on Health and Human Services by December 1, 2023.

SECTION 4.  This act becomes effective July 1, 2022.