H.F. 107 Section 1. NEW SECTION . 237A.9 Evidence of financial 1 responsibility. 2 1. A person shall not establish or operate a child care 3 facility or child care home unless the person furnishes 4 evidence acceptable to the department of the person’s ability 5 to respond in damages for liability on account of accidents or 6 wrongdoings occurring subsequent to the effective date of the 7 evidence of financial responsibility in the amount of at least 8 five hundred thousand dollars because of bodily injury to or 9 the death of one person in any one accident or incident arising 10 out of the ownership or operation of a child care facility or 11 child care home. 12 2. The evidence of financial responsibility shall 13 consist of a surety bond, a liability insurance policy, or an 14 irrevocable letter of credit issued by a financial institution. 15 The evidence of financial responsibility shall be maintained 16 at not less than the required amount at all times during the 17 period of ownership or operation of the child care facility or 18 child care home. The department may accept a certification 19 of the evidence of financial responsibility. The evidence 20 of financial responsibility shall pay the amount that the 21 beneficiary is legally obligated to pay as damages caused by 22 the operations of the person’s child care facility or child 23 care home. A liability insurance policy shall be subject to 24 the insurer’s policy provisions filed with and approved by the 25 commissioner of insurance. 26 3. The department shall be notified ten days prior to any 27 reduction in the surety bond or liability insurance made at the 28 request of the person or of cancellation of the surety bond by 29 the surety or of cancellation of the liability insurance by the 30 insurer. The department shall be notified ninety days prior 31 to any reduction of the amount of the irrevocable letter of 32 credit at the request of the person or of the cancellation of 33 the irrevocable letter of credit by the financial institution. 34 The total and aggregate liability of the surety, insurer, 35 -1- LSB 1885YH (1) 86 av/sc 1/ 3

H.F. 107 or financial institution for all claims shall be limited to 1 the face of the surety bond, liability insurance policy, or 2 irrevocable letter of credit. However, the surety, insurer, 3 or issuer remains liable for damages arising from accidents or 4 other wrongdoings that occurred during the effective period of 5 the evidence of financial responsibility. 6 4. A license or certificate of registration shall not be 7 issued to a child care facility under this chapter unless the 8 applicant furnishes evidence acceptable to the department of 9 compliance with this section. 10 5. A person shall not establish or operate a child care 11 home unless the applicant furnishes evidence acceptable to the 12 department of compliance with this section. 13 6. The department shall adopt rules pursuant to chapter 17A 14 to administer the provisions of this section. 15 Sec. 2. Section 237A.19, Code 2015, is amended by adding the 16 following new subsection: 17 NEW SUBSECTION . 4. A person who establishes or operates a 18 child care facility or child care home in violation of section 19 237A.9 commits a simple misdemeanor. Each day of continuing 20 violation after conviction, or notice from the department by 21 certified mail of the violation, is a separate offense. A 22 single charge alleging a continuing violation may be made in 23 lieu of filing charges for each day of violation. 24 Sec. 3. APPLICABILITY. This Act applies to initial 25 applications and applications for renewal of licenses or 26 certificates of registration of child care facilities filed on 27 or after January 1, 2016, and to child care homes established 28 or in operation on or after January 1, 2016. 29 EXPLANATION 30 The inclusion of this explanation does not constitute agreement with 31 the explanation’s substance by the members of the general assembly. 32 This bill requires that a person shall not establish or 33 operate a child care facility or child care home unless the 34 person furnishes evidence to the department of human services 35 -2- LSB 1885YH (1) 86 av/sc 2/ 3

H.F. 107 of the person’s ability to respond in damages for accidents or 1 wrongdoings that arise out of the ownership or operation of the 2 child care facility or child care home. 3 The evidence of financial responsibility must consist of a 4 surety bond, a liability insurance policy, or an irrevocable 5 letter of credit issued by a financial institution in the 6 amount of at least $500,000 for damages because of bodily 7 injury to or the death of one person in any one accident or 8 incident arising out of the ownership or operation of a child 9 care facility or child care home. 10 The bill requires notice to the department of human services 11 if a surety bond, liability insurance, or irrevocable letter 12 of credit is reduced or canceled. The department is required 13 to adopt rules to administer the provisions of the bill. A 14 violation of the provisions of the bill is punishable as a 15 simple misdemeanor and can result in suspension or revocation 16 of the license or certificate of registration of a child care 17 facility. A simple misdemeanor is punishable by confinement 18 for no more than 30 days or a fine of at least $65 but not more 19 than $625 or by both. 20 Under Code chapter 237A, a child care facility includes a 21 child care center, which is a facility that provides child care 22 or preschool services for seven or more children and cannot 23 be established or operated without obtaining a license, and 24 includes a child development home, which is a person or program 25 that provides child care for six or more children and cannot 26 be established or operated without obtaining a certificate 27 of registration. A child care home is a person or program 28 providing child care to five or fewer children that is not 29 required to obtain a certificate of registration. 30 The bill is applicable to initial applications and 31 applications for renewal of licenses or certificates of 32 registration of child care facilities filed on or after January 33 1, 2016, and to child care homes established or in operation on 34 or after January 1, 2016. 35 -3- LSB 1885YH (1) 86 av/sc 3/ 3