Increase Market Rate/Rate Floor/Child Subsidy.

This bill raises child care subsidy rates in North Carolina to the 75th percentile of market costs, directly benefiting low-income families who use state-funded care. Starting in July 2026, the state will automatically update these rates based on future market studies and establish a minimum payment floor for providers in counties where local rates are lower. The legislation appropriates $60 million from the General Fund and $20 million from federal grants to cover the initial increase, with an additional $160 million allocated to maintain the statewide rate floor. While most counties will adopt the new statewide standard, areas with very few children in specific age groups may keep their current rates if the state rate would be too low to secure care for eligible families.