FILED SENATE
May 26, 2022
GENERAL ASSEMBLY OF NORTH CAROLINA
S.B. 887
SESSION 2021 PRINCIPAL CLERK
S D
SENATE BILL DRS45572-LUfa-113D
Short Title: Child Care Act. (Public)
Sponsors: Senators Mohammed and Murdock (Primary Sponsors).
Referred to:
1 A BILL TO BE ENTITLED
2 AN ACT TO REENACT THE CHILD CARE TAX CREDIT, TO EXPAND THE NORTH
3 CAROLINA PREKINDERGARTEN (NC PRE-K) PROGRAM AND INCREASE CARE
4 SUBSIDY BY APPROPRIATING FUNDS FOR THOSE PURPOSES, TO PROVIDE
5 SCHOOL LUNCH IN PUBLIC SCHOOL UNITS AT NO COST TO STUDENTS, TO
6 APPROPRIATE FUNDS FOR PUBLIC CHILD CARE PROVIDED BY COMMUNITY
7 COLLEGES, AND TO REQUIRE A REPORT ON THE FEASIBILITY AND
8 ADVISABILITY OF A HIGH SCHOOL CHILD CARE APPRENTICESHIP PROGRAM.
9 The General Assembly of North Carolina enacts:
10
11 PART I. CHILD CARE TAX CREDIT
12 SECTION 1.1. G.S. 105-151.11 is reenacted as it existed immediately before its
13 expiration, is recodified as G.S. 105-153.11, and reads as rewritten:
14 "§ 105-153.11. Credit for child care and certain employment-related expenses.
15 (a) Credit. – A person who is allowed a credit against federal income tax for a percentage
16 of employment-related expenses under section 21 of the Code shall be allowed as a credit against
17 the tax imposed by this Part an amount equal to the applicable percentage of the
18 employment-related expenses as defined in section 21(b)(2) of the Code. In order to claim the
19 credit allowed by this section, the taxpayer must provide with the tax return the information
20 required by the Secretary.
21 (a1) Applicable Percentage. – For employment-related expenses that are incurred only
22 with respect to one or more dependents who are seven 18 years old or older up to 25 years old
23 and are not physically or mentally incapable of caring for themselves, the applicable percentage
24 is the appropriate percentage in the column labeled "Percentage A" in the table below, based on
25 the taxpayer's adjusted gross income determined under the Code. For employment-related
26 expenses that are incurred only with respect to one or more dependents who are 12 years old up
27 to 18 years old and are not physically or mentally incapable of caring for themselves, the
28 applicable percentage is the appropriate percentage in the column labeled "Percentage B" in the
29 table below, based on the taxpayer's adjusted gross income determined under the Code. For
30 employment-related expenses that are incurred only with respect to one or more dependents who
31 are 6 years old up to 12 years old and are not physically or mentally incapable of caring for
32 themselves, the applicable percentage is the appropriate percentage in the column labeled
33 "Percentage C" in the table below, based on the taxpayer's adjusted gross income determined
34 under the Code. For employment-related expenses with respect to any other qualifying
35 individual, the applicable percentage is the appropriate percentage in the column labeled
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 General Assembly Of North Carolina Session 2021
1 "Percentage B" D" in the table below, based on the taxpayer's adjusted gross income determined
2 under the Code.
3 Filing Status Adjusted Gross Percentage A Percentage B Percentage C Percentage D
4 Income
5
6 Head of Up to $20,000 9%7% 13%9% 11% 13%
7 Household
8 Over $20,000
9 up to $32,000 8%6.3% 11.5%8% 9.8% 11.5%
10
11 Over $32,000 7%5.5% 10%7% 8.5% 10%
12
13 Surviving
14 Spouse or
15 Joint Return Up to $25,000 9%7% 13%9% 11% 13%
16
17 Over $25,000
18 up to $40,000 8%6.3% 11.5%8% 9.8% 11.5%
19
20 Over $40,000 7%5.5% 10%7% 8.5% 10%
21
22 Single Up to $15,000 9%7% 13%9% 11% 13%
23
24 Over $15,000
25 up to $24,000 8%6.3% 11.5%8% 9.8% 11.5%
26
27 Over $24,000 7%5.5% 10%7% 8.5% 10%
28
29 Married
30 Filing
31 Separately Up to $12,500 9%7% 13%9% 11% 13%
32
33 Over $12,500
34 up to $20,000 8%6.3% 11.5%8% 9.8% 11.5%
35
36 Over $20,000 7%5.5% 10%7% 8.5% 10%
37 (b) Employment Related Expenses. – The amount of employment-related expenses for
38 which a credit may be claimed may not exceed three thousand dollars ($3,000) if the taxpayer's
39 household includes one qualifying individual, as defined in section 21(b)(1) of the Code, and
40 may not exceed six thousand dollars ($6,000) if the taxpayer's household includes more than one
41 qualifying individual. The amount of employment-related expenses for which a credit may be
42 claimed is reduced by the amount of employer-provided dependent care assistance excluded from
43 gross income.
44 (c) Limitations. – A nonresident or part-year resident who claims the credit allowed by
45 this section shall reduce the amount of the credit by multiplying it by the fraction calculated under
46 G.S. 105-134.5(b) or (c), G.S. 105-153.4(b) or (c), as appropriate. No credit shall be allowed
47 under this section for amounts deducted in calculating North Carolina taxable income. The credit
48 allowed by this section may not exceed the amount of tax imposed by this Part for the taxable
49 year reduced by the sum of all credits allowable, except for payments of tax made by or on behalf
50 of the taxpayer."
51
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 General Assembly Of North Carolina Session 2021
1 PART II. EXPAND NC PRE-K PROGRAM
2 SECTION 2.1. There is appropriated from the General Fund to the Department of
3 Health and Human Services, Division of Child Development and Early Education, the sum of
4 one hundred eighty million dollars ($180,000,000) in recurring funds for the 2022-2023 fiscal
5 year for the North Carolina Prekindergarten (NC Pre-K) program to expand the number of slots
6 by 32,000 and cover all eligible children 4 years of age.
7
8 PART III. INCREASE SUBSIDIZED CHILD CARE FUNDING
9 SECTION 3.1. There is appropriated from the General Fund to the Department of
10 Health and Human Services, Division of Child Development and Early Education, the sum of
11 forty-five million dollars ($45,000,000) in recurring funds for the 2022-2023 fiscal year to
12 increase funding for subsidized child care.
13
14 PART IV. PROVIDE LUNCH TO STUDENTS IN PUBLIC SCHOOL UNITS AT NO
15 COST TO STUDENTS
16 SECTION 4.1. G.S. 115C-263 reads as rewritten:
17 "§ 115C-263. Required provision of services.
18 As a part of the function of the public school system, local boards of education shall provide
19 to the extent practicable school food nutrition services in the schools under their jurisdiction.
20 Lunch shall be available through the nutrition services to all students at no cost to the student.
21 All school food nutrition services made available under this authority shall be provided in
22 accordance with standards and regulations recommended by the Superintendent of Public
23 Instruction and approved by the State Board of Education."
24 SECTION 4.2. G.S. 115C-264 reads as rewritten:
25 "§ 115C-264. Operation.
26 (a) In the operation of their public school nutrition programs the public schools, pursuant
27 to G.S. 115C-263, public school units shall participate in the National School Lunch Program
28 established by the federal government. The program shall be under the jurisdiction of the
29 Division of School Support, Child Nutrition Services of the Department of Public Instruction
30 School Nutrition Division of the Department of Public Instruction and in accordance with federal
31 guidelines as established by the Food and Nutrition Service of the United States Department of
32 Agriculture.
33 (a1) The Department of Public Instruction shall allocate sufficient funds to public school
34 units to provide lunch to every student who elects to receive lunch at no cost to the student. These
35 funds shall supplement and not supplant any federal funds provided for the same services. No
36 later than March 15, 2023, and every year thereafter that funds are made available pursuant to
37 this section, the Department of Public Instruction shall report to the Joint Legislative Education
38 Oversight Committee, at a minimum, the number of students electing to receive lunch at no cost,
39 the number of no-cost lunches served, and the cost of implementing the no-cost lunch program.
40 …
41 (c) All school food nutrition services shall be operated on a nonprofit basis, and any
42 earnings therefrom over and above the cost of operation as defined herein shall be used to reduce
43 the cost of food, to serve better food, or to provide free or reduced-price lunches to indigent
44 children and lunches and for no other purpose. The term "cost of operation" means the actual
45 cost incurred in the purchase and preparation of food, the salaries of all personnel directly
46 engaged employed in providing food services, and the cost of nonfood supplies as outlined under
47 standards adopted by the State Board of Education. "Personnel" means child school nutrition
48 supervisors or directors, bookkeepers directly engaged in food nutrition service record keeping
49 and those persons directly involved in preparing and serving food. Child School nutrition
50 personnel shall be paid from the funds of food nutrition services only for services rendered in on
51 behalf of the child school nutrition program. Any cost incurred in the provisions and maintenance
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1 of school food nutrition services over and beyond the cost of operation shall be included in the
2 budget request filed annually by local boards of education with boards of county commissioners.
3 Public schools are not required to comply with G.S. 115C-522(a) in the purchase of supplies and
4 food for such school food nutrition services."
5 SECTION 4.3. G.S. 115C-75.9(l) reads as rewritten:
6 "(l) School Nutrition Program. – The innovative school shall participate in the National
7 School Lunch Program, as provided in G.S. 115C-264.and shall make lunch available to all
8 students at no cost to the students. All school nutrition services shall be provided in accordance
9 with G.S. 115C-263 and G.S. 115C-264."
10 SECTION 4.4. G.S. 115C-218.75 is amended by adding a new subsection to read:
11 "(k) A charter school shall make lunch available to all students at no cost to the students.
12 All school nutrition services shall be provided in accordance with G.S. 115C-263 and
13 G.S. 115C-264."
14 SECTION 4.5. G.S. 115C-238.72(b) reads as rewritten:
15 "(b) Food Service. – The local school administrative unit identified by resolution shall
16 provide, to the extent practicable, school food provide school nutrition services to the regional
17 school. school, including making lunch available to all students at no cost to the students. All
18 school nutrition services shall be provided in accordance with G.S. 115C-263 and
19 G.S. 115C-264. For purposes of federal funding through the National School Lunch Program or
20 other federally supported food nutrition service programs, the local school administrative unit
21 identified by resolution shall be permitted to include eligible students enrolled in the regional
22 school. Other participating units shall not include students enrolled in the regional school for
23 purposes of federally supported food nutrition service programs."
24 SECTION 4.6. G.S. 115C-150.14 is amended by adding a new subsection to read:
25 "(a1) A school governed by this Article shall provide school nutrition services for enrolled
26 students by participating in federally assisted school nutrition programs and shall make lunch
27 available to all students at no cost to the students. All school nutrition services shall be provided
28 in accordance with G.S. 115C-263 and G.S. 115C-264."
29 SECTION 4.7. G.S. 116-239.8(b)(4)c. reads as rewritten:
30 "c. Food Services. – Students enrolled in a laboratory school shall be
31 provided school nutrition services by the laboratory school
32 participating in federally assisted school nutrition programs. The
33 laboratory school shall also make lunch available to all students at no
34 cost to the students. All school nutrition services shall be provided in
35 accordance with G.S. 115C-263 and G.S. 115C-264. Upon request,
36 the local school administrative unit in which the laboratory school is
37 located shall administer the National School Lunch Program for the
38 laboratory school in accordance with G.S. 115C-264.school."
39 SECTION 4.8. There is appropriated from the General Fund to the Department of
40 Public Instruction the sum of one hundred fifty-nine million three hundred thousand dollars
41 ($159,300,000) in recurring funds for the 2022-2023 fiscal year to provide lunch to students in
42 public school units at no cost to the students in accordance with this Part.
43
44 PART V. FUNDS FOR PUBLIC CHILD CARE PROVIDED BY COMMUNITY
45 COLLEGES
46 SECTION 5.1.(a) Appropriation. – There is appropriated from the General Fund to
47 the Community Colleges System Office the sum of ten million dollars ($10,000,000) in
48 nonrecurring funds for the 2022-2023 fiscal year to be allocated proportionally to each
49 community college with an active child care program that is available to the public to support
50 and maintain that program. The State Board of Community Colleges shall adopt a formula for
51 allocating these funds. Funds shall be allocated based on the number of children served by the
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1 program, and the State Board shall prioritize the award of funds based on the financial needs of
2 the program. These funds shall not revert at the end of the 2022-2023 fiscal year but shall remain
3 available until expended.
4 SECTION 5.1.(b) Report. – Any community college that does not have a publicly
5 available child care program shall report to the State Board of Community Colleges on the
6 feasibility and advisability of implementing a publicly available child care program at that
7 community college, including recommendations for implementing such a child care program,
8 estimated costs, and barriers to implementation. The State Board shall aggregate that information
9 and report it to the Joint Legislative Oversight Committee no later than March 31, 2023.
10
11 PART VI. REPORT ON HIGH SCHOOL CHILD CARE APPRENTICESHIP
12 PROGRAM
13 SECTION 6.1.(a) No later than December 31, 2023, the Department of Public
14 Instruction, in consultation with each partner agency, shall report to the Joint Legislative
15 Education Oversight Committee on the feasibility and advisability of implementing a child care
16 apprenticeship program in public high schools. The report shall include at least the following
17 information:
18 (1) Estimated costs and a time line for implementing a statewide or regional child
19 care apprenticeship program.
20 (2) Expected student and community impacts of a child care apprenticeship
21 program, including impacts on student performance, attrition, well-being, and
22 any other factor the Department deems relevant to the report.
23 SECTION 6.1.(b) No later than February 29, 2024, the Joint Legislative Education
24 Oversight Committee shall hold a committee meeting and receive an in-person presentation from
25 the Department, in partnership with each partner agency, on the report provided pursuant to
26 subsection (a) of this section.
27 SECTION 6.1.(c) For purposes of this section, the term "partner agency" shall refer
28 to the Department of Health and Human Services, the Board of Governors of The University of
29 North Carolina, and the State Board of Community Colleges.
30
31 PART VII. EFFECTIVE DATE
32 SECTION 7.1. Part I of this act is effective for taxable years beginning on or after
33 January 1, 2022. The remainder of this act becomes effective July 1, 2022.
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