BILL NUMBER: S788

SPONSOR: MONTGOMERY
 
TITLE OF BILL:

An act to amend the social services law, in relation to security depos-
its 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 reason-
able.

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 $880 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.
http://leginfo.state.ny.us/asmsen/navigate.cgi?NVDT0:1/17/2017

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;
2013-2014-Referred to Children and Families.

 
FISCAL IMPLICATIONS:

None.

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