Beginning July 1, 2025, directs the Department of Health and Human Services (DHHS), Division of Child Development and Early Education (Division), to increase the child care subsidy market rates to the seventy-fifth percentile as recommended by the 2023 Child Care Market Rate Study (Study) for children in child care centers and homes with a rating of one to five stars.

Appropriates $123.5 million from the General Fund to the Division in recurring funds for each year of the 2025-27 fiscal biennium to implement the market rate increases described above. Directs the Division to add 10% into each adjusted rate for a rural county (defined) and for infants and toddlers (birth to three years of age).

Appropriates $8 million from the General Fund, to be allocated to the five listed councils of government in the specified amounts, for 2025-26 to establish a two-year pilot program coordinated by those councils of governments to build child care capacity in areas impacted by Hurricane Helene that are in the affected area, as defined in Section 1A.4 of SL 2024-57, that qualify for Federal Emergency Management Agency Individual Assistance and Public Assistance Categories A through G. Requires vendors receiving funds through a request for application issued by the designated council of governments to (1) increase the supply of child care programs by recruiting and coaching prospective child care providers through the initial business planning and implementation process and (2) ensure sustainability by executing a two-year mentorship program for the new child care programs created pursuant to the act. Authorizes the councils of government to use (1) a portion of these funds for additional solutions provided by the vendor within the early childhood education space to meet localized needs and in support of recovery, rehabilitation, and ongoing needs of their member communities and (2) up to 2% of the funds allocated to the respective councils of government under the act for administrative costs. Requires the participating councils of government to submit an initial progress report by January 1, 2026, and additional reports every six months thereafter until the end of the pilot program to the specified NCGA committee and the Fiscal Research Division on at least the four specified areas of focus.

Effective July 1, 2025.