What's happening
The bill requires child day care providers to place excess security deposits in escrow and outlines conditions for their return.
Why it matters
Protects parents from excessive financial risk. by ensuring that any security deposit paid beyond two weeks’ worth of child care fees is kept separate and not used by the provider for other purposes.
Creates transparency and accountability. for child care providers regarding how excess security deposits are handled, which may reduce disputes between parents and providers over deposit returns.
Requires accrual and return of interest. on the escrowed portion of deposits, ensuring families benefit from any interest earned and are not financially disadvantaged by large upfront payments.
Clarifies providers’ obligations at the end of care. by specifying that excess deposits must be returned (with interest) or applied to additional care, which can help parents plan for transitions and avoid unexpected costs.
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Who cares
Headline styles
Protect Day Care Deposits
Plain English, a few words. Used as the page title.
Sponsors
3 Co-sponsors
History
- Referred to children and families
- Referred to children and families
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Escrow Day Care Deposits
In Assembly Committee · Children And Families · Sponsor Diana Richardson
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
788
2019-2020 Regular Sessions
IN SENATE (Prefiled)
January 9, 2019
Introduced by Sens. MONTGOMERY, PERSAUD -- read twice and ordered printed, and when printed to be committed to the Committee on Children and Families
AN ACT to amend the social services law, in relation to security deposits collected by child day care providers
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The social services law is amended by adding a new section 390-l to read as follows:
§ 390-l. Requiring child day care providers to escrow certain security deposits. 1. Child day care providers, licensed or registered pursuant to this title, that collect advance security deposits of an amount in excess of, but not equal to, the fee for two weeks of child care services are required 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.
2. The child day care provider must comply with the requirements of subdivision one of this section 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.
§ 2. This act shall take effect on the sixtieth day after it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02882-01-9
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
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.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.