Senate Bill S1425

                                BILL NUMBER:S1425

TITLE OF BILL:
An act
to amend the social services law, in relation to security deposits
collected by child day care providers

PURPOSE:
Requires day care providers to escrow security deposits in
excess of the value of two weeks of provided services.

SUMMARY OF PROVISIONS:
Amends the social services law to require child
day care providers to escrow security deposits of an amount in excess
of, but not equal to, the fee for two weeks of child care services
into an escrow account which shall not be mingled with the personal
monies or become an asset of the day care provider. The child day
care provider must comply with this requirement and, prior to
termination of services by the child's parent or guardian, must: a)
provide child care services equal to the amount of time covered by
the total amount of the security deposit; or b) return the excess
security deposit plus accrued interest; or c) return the total amount
of the security deposit plus accrued interest on the excess security
deposit.

JUSTIFICATION:
              

Before agreeing to provide child day care services, providers commonly
request a deposit from a child's parent or guardian equal to the fee
for two weeks of service. The deposit helps provide fiscal stability
for the center in the event that parents discontinue service without
providing the requested two weeks of notice. This request for a
deposit is reasonable.

Occasionally, parents are required to deposit a sum larger than the
fee for two weeks of service. In one instance this year, a parent
provided a deposit of over $800 to her child day care provider. The
provider later declared bankruptcy and closed without providing the
services covered by the deposit and without returning any of the
deposit to the parent. The provider claimed the money had already
been used to cover business expenses.

The law should protect parents or guardians who are required to give
deposits larger than the typical amount required equal to the fee for
two weeks of service. This legislation would require the child day
care provider to deposit the difference between the fee for two weeks
of services and the total amount of the required security deposit
into an escrow account which shall not be mingled with the personal
monies or become an asset of the day care provider.

For example, if a center charges $250 per week of child day care
services but requires a deposit of $1,000, then the difference of
$500 between the total deposit and the fee for two weeks of service
would be deposited into an escrow account, similar to that required
for apartment rentals. The center
would be required to a) provide child care services equal to the
amount of time covered by the total amount of the security deposit;


or b) return the excess security deposit plus accrued interest; or c)
return the total amount of the security deposit plus accrued interest
on the excess security deposit.

LEGISLATIVE HISTORY:
First introduced in 2009-10
2011-2012: S.2355 - Died in Committee

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act shall take effect 60 days after becoming law.