STAND. COM. REP. NO. 1848

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 513
                                     S.D. 2
                                     H.D. 2




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committees on Consumer Protection and Commerce and
Judiciary and Hawaiian Affairs, to which was referred S.B. No.
513, S.D. 2, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO FAMILY CHILD CARE,"

beg leave to report as follows:

     The purpose of this bill is to increase the availability of
child care by amending section 46-15.35, Hawaii Revised Statutes,
to remove the exemption for condominiums, apartments, and
townhouses from the section's requirement that family child care
homes be considered a residential use of property, and be
permitted in all residentially designated zones.

     Your Committees received testimony supporting this measure
from the Good Beginnings Alliance and People Attentive to
Children (PATCH).  Numerous concerned individuals including child
care providers, persons with and without children, and members of
condominium associations also submitted testimony in support.
The Department of Human Services, Hawaii State Commission on the
Status of Women, and Hawaii Independent Condominium & Cooperative
Owners supported the intent of the bill.  State Farm, Hawaii
Chapter of the Institute of Real Estate Management, and Hawaii
Council of Associations of Apartment Owners commented.  Testimony

 
 
 
 
 
 
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opposing this bill was received from the Honolulu Fire
Department, Hawaii Association of Realtors, Hawaii Chapter of the
Community Associations Institute, and the Associations of
Apartment Owners of the Fairway Villa Condominium, Mauna Luan,
and Heritage House.  Ten owners of condominium apartments also
opposed the measure.

     Your Committees find that in 1996, the Legislature passed
Act 303.  The stated purpose of the Act was to remove
restrictions on the use of residential property for family child
care homes (FCCHs), and encourage the establishment of child care
facilities in normal residential surroundings, and an environment
conducive to healthy and safe development.  Act 303 requested
that the Attorney General (AG) report on issues of tort
liability, the Americans with Disabilities Act (ADA), and any
constitutional concerns relating to residences of a type excluded
from the scope of the Act, and to make recommendations as to
whether those exemptions should be removed.  Your Committees note
that these are some of the same issues and concerns raised in
testimony before your Committees.

     Examining concerns regarding constitutionality under the
Contract Clause, and the Act's effect on contracts between common
interest community associations and their members, the AG
recommended that the State wait for the result of litigation in
California, in Barret v. Dawson, 98 Daily Journal D.A.R. 1943.
On February 26, 1998, the court in Barret upheld the challenged
California law, finding that "insuring adequate and local day
care for working parents is probably about as broad a public
purpose as any that might be imagined in the regulatory
universe."

     The AG questioned the applicability of the ADA to the common
elements of a common interest community, but stated that if the
ADA applied, it requires removal of existing architectural
barriers only if removal is "readily achievable."  The AG
recommended that the child care provider be required to pay the
cost of ADA required modifications, if any.

     The AG concluded that there would be an additional risk of
liability due to the operation of a FCCH as it affected common
areas, and noted that not only was the common interest community
liable for injuries in these areas, but that a FCCH is not
obligated to carry liability insurance under current law.


 
 
 
 
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     With the AG's recommendations as well as safety and other
concerns voiced by testifiers in mind, your Committees have
amended this measure to remove a limited group of residences from
the exemption otherwise granted to condominiums and other
apartment owners from the scope of Act 303.  Townhouses
consisting of units that are free standing or that share a common
wall, and where each unit extends from ground to roof, may not
prohibit the establishment of FCCHs.  Your Committees believe
that dwellings of this type do not implicate many of the safety
concerns expressed, are less likely to require extensive use of
common elements, and less likely to require ADA modifications.

     Your Committees do not intend to include within this group,
mixed developments consisting of both townhouses and other types
of condominiums governed by a single association.  Self-
governance for these mixed developments as well as for
condominiums and apartments that are not townhouses, is not
altered in any way by this bill.  Instead, these entities retain
the ability to authorize or prohibit the establishment of FCCH
according to their own bylaws.

     Your Committees have also made amendments to the provisions
of the bill that address liability, for the purpose of ensuring
that an association bears no liability for claims arising from
the operation of a FCCH.  As amended, these provisions:

     (1)  Give both townhouse and other condominium and apartment
          associations immunity from liability for the operation
          of a FCCH where:

          (A)  The FCCH complies with the ADA, if necessary;

          (B)  The association limits FCCHs to no less than one
               per cent and no more than three per cent of total
               units;

          (C)  The FCCH is operated by an owner-occupant; and

          (D)  The FCCH is located below the fifth floor.

     (2)  Authorize both townhouse and other condominium and
          apartment associations to require that the FCCH:

          (A)  Indemnify the association against all claims,
               costs, and attorneys fees related to liability for
               operation of the FCCH;


 
 
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          (B)  Reimburse the association for increases in
               liability insurance premiums attributable to
               operation of the FCCH;

          (C)  Obtain waivers of claims of liability against the
               association from parents, guardians, and
               caretakers of children in the FCCH;

          (D)  Obtain association approved liability insurance
               for the FCCH and common areas, that is the sole
               remedy for any injury occurring to FCCH children
               or their parents, caretakers, or guardians.

     Your Committees recognize that these provisions may not
entirely dispel the concerns of testifiers, but find that these
concerns regarding liability, self governance, and inconvenience,
must be balanced against the remedies and safeguards provided in
this bill, as well as the substantial and troubling statewide
need for child care.  Your Committees note that at an earlier
hearing of the House companion to this bill, PATCH provided your
Committees with the following evidence that the need has in no
way been adequately addressed.  PATCH stated that:

     (1)  In fiscal year 1996-1997, PATCH took calls from 6,828
          parents, placing 2,034, and leaving 4,796 children
          without care; and

     (2)  In fiscal year 1997-1998, PATCH took calls from 6,619
          parents needing child care, and were able to place
          3,565, leaving 3,054 children without care.

     Your Committees find that the provision of safe, accessible,
and quality child care would benefit the entire community--the
employed, those needing employment, or those who could become
employed but for lack of child care, employers, and the children
of this community--and have accordingly amended this measure to
encourage further productive discussion and resolution of the
issues presented herein.

     As affirmed by the records of votes of the members of your
Committees on Consumer Protection and Commerce and Judiciary and
Hawaiian Affairs that are attached to this report, your
Committees are in accord with the intent and purpose of S.B. No.
513, S.D. 2, H.D. 1, as amended herein, and recommend that it
pass Third Reading in the form attached hereto as S.B. No. 513,
S.D. 2, H.D. 2.


 
 
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                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committees on Consumer
                                   Protection and Commerce and
                                   Judiciary and Hawaiian
                                   Affairs,

                                   
                                   
                                   
                                   
______________________________     ______________________________
PAUL T. OSHIRO, Chair              RON MENOR, Chair