BILL NUMBER:S3247

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;
2013-2014-Referred to Children and Families.

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

This act shall take effect 60 days after becoming law.