This bill amends existing law (RCW 43.216.828) to change how the state pays child care providers who receive subsidy payments. Beginning July 1, 2025, the department must pay licensed or certified child care centers, family home providers, and outdoor nature-based child care providers the lesser of the provider’s private-pay rate for a non-subsidized family or a child care subsidy base rate that “achieves the 75th percentile of market.” The act requires the state and the exclusive representative for family home providers to bargain over implementation of the subsidy rate increase, declares the act an emergency, and takes effect July 1, 2025. The bill directs the department to build on the child care collaborative task force’s work to develop and implement a child care cost estimate model and to use that model to recommend subsidy rates sufficient to cover the full cost of providing high quality child care. It specifies factors the department must consider in the cost model (examples include adjusting rates for cost of living using measures such as area median income, cost of living by zip code, and grouping by rural/suburban/urban) and to incorporate the existing rate model for nonstandard child care hours. The department is also directed to evaluate options to support access to affordable health insurance coverage for licensed or certified child care providers. The section is stated not to interfere with family home providers’ collective bargaining rights under RCW 41.56.028. Legally, this is a modification of existing statutory payment rules and imposes new procedural obligations on the department (developing a cost model, recommending rates, evaluating health insurance options) plus a required bargaining process with the exclusive representative for family home providers. The text provided does not name the specific “department,” does not explain how the 75th percentile is measured or calculated, gives no timeline or deadlines for completing the cost model or implementing recommended rates beyond the July 1, 2025 effective date, does not include the referenced nonstandard hours rate model, and does not detail the scope or procedures for the required bargaining.

Starting July 1, 2025, child care providers that are licensed or certified centers, family home providers, and outdoor nature-based providers who get state subsidies will be paid by the state up to either their private-pay rate or a new subsidy base set at the 75th percentile of the market, whichever is lower. In practice this means many providers could see higher subsidy payments if current state rates are below the 75th percentile, while payments to providers charging above the 75th percentile will be capped at that market-based level. Family home providers must bargain with the state over how the increase is put into effect, so their collective bargaining process will shape timing and details. The state agency named as the department will need to build a detailed cost model and recommend rates that aim to cover the full cost of high-quality care, adjust for local cost differences, and consider nonstandard hours and health insurance access for providers, adding analytic and administrative work and likely increasing budgetary pressure to fund higher rates. Key details are unclear from the text provided: the specific department responsible, how the 75th percentile is calculated, and deadlines or rules for the bargaining and model implementation, so the exact fiscal impact and timing remain uncertain.