HF 2080 (LSB 5834YH (2) 85)

HOUSE FILE 2080

BY  DAWSON

A BILL FOR

An Act to require owners or operators of certain child care facilities and child care homes to provide evidence of financial responsibility, providing a penalty, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  237A.9  Evidence of financial responsibility.
   1.  A person shall not establish or operate a child care facility or child care home unless the person furnishes evidence acceptable to the department of the person’s ability to respond in damages for liability on account of accidents or wrongdoings occurring subsequent to the effective date of the evidence of financial responsibility in the amount of at least five hundred thousand dollars because of bodily injury to or the death of one person in any one accident or incident arising out of the ownership or operation of a child care facility or child care home.
   2.  The evidence of financial responsibility shall consist of a surety bond, a liability insurance policy, or an irrevocable letter of credit issued by a financial institution. The evidence of financial responsibility shall be maintained at not less than the required amount at all times during the period of ownership or operation of the child care facility or child care home. The department may accept a certification of the evidence of financial responsibility. The evidence of financial responsibility shall pay the amount that the beneficiary is legally obligated to pay as damages caused by the operations of the person’s child care facility or child care home. A liability insurance policy shall be subject to the insurer’s policy provisions filed with and approved by the commissioner of insurance.
   3.  The department shall be notified ten days prior to any reduction in the surety bond or liability insurance made at the request of the person or of cancellation of the surety bond by the surety or of cancellation of the liability insurance by the insurer. The department shall be notified ninety days prior to any reduction of the amount of the irrevocable letter of credit at the request of the person or of the cancellation of the irrevocable letter of credit by the financial institution. The total and aggregate liability of the surety, insurer, or financial institution for all claims shall be limited to the face of the surety bond, liability insurance policy, or irrevocable letter of credit. However, the surety, insurer, or issuer remains liable for damages arising from accidents or other wrongdoings that occurred during the effective period of the evidence of financial responsibility.
   4.  A license or certificate of registration shall not be issued to a child care facility under this chapter unless the applicant furnishes evidence acceptable to the department of compliance with this section.
   5.  A person shall not establish or operate a child care home unless the applicant furnishes evidence acceptable to the department of compliance with this section.
   6.  The department shall adopt rules pursuant to chapter 17A to administer the provisions of this section.
    Sec. 2.  Section 237A.19, Code 2014, is amended by adding the following new subsection:
   NEW SUBSECTION.  4.  A person who establishes or operates a child care facility or child care home in violation of section 237A.9 commits a simple misdemeanor. Each day of continuing violation after conviction, or notice from the department by certified mail of the violation, is a separate offense. A single charge alleging continuing violation may be made in lieu of filing charges for each day of violation.
    Sec. 3.  APPLICABILITY.  This Act applies to initial applications and applications for renewal of licenses or certificates of registration of child care facilities filed on or after January 1, 2015, and to child care homes established or in operation on or after January 1, 2015.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill requires that a person shall not establish or operate a child care facility or child care home unless the person furnishes evidence to the department of human services of the person’s ability to respond in damages for accidents or wrongdoings that arise out of the ownership or operation of the child care facility or child care home.
   The evidence of financial responsibility must consist of a surety bond, a liability insurance policy, or an irrevocable letter of credit issued by a financial institution in the amount of at least $500,000 for damages because of bodily injury to or the death of one person in any one accident or incident arising out of the ownership or operation of a child care facility or child care home.
   The bill requires notice to the department of human services if a surety bond, liability insurance, or irrevocable letter of credit is reduced or canceled. The department is required to adopt rules to administer the provisions of the bill. A violation of the provisions of the bill is punishable as a simple misdemeanor and can result in suspension or revocation of the license or certificate of registration of a child care facility. A simple misdemeanor is punishable by confinement for no more than 30 days or a fine of at least $65 but not more than $625 or by both.
   Under Code chapter 237A, a child care facility includes a child care center, which is a facility that provides child care or preschool services for seven or more children and cannot be established or operated without obtaining a license, and includes a child development home, which is a person or program that provides child care for six or more children and cannot be established or operated without obtaining a certificate of registration. A child care home is a person or program providing child care to five or fewer children that is not required, but has the option, to obtain a certificate of registration.
   The bill is applicable to initial applications and applications for renewal of licenses or certificates of registration of child care facilities filed on or after January 1, 2015, and to child care homes established or in operation on or after January 1, 2015.