STAND. COM. REP. NO. 439

                                   Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 513
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Health and Human Services, to which was
referred S.B. No. 513 entitled: 

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

begs leave to report as follows:

     The purpose of this measure is to allow family child care
homes to operate in condominiums, townhouses, and apartments.  

     Testimony in support of this measure was received from the
Children with Special Needs Branch of the Family Health Services
Division of the Department of Health, Good Beginnings Alliance,
Parents and Children Together, People Attentive to Children, five
child care providers, twelve private citizens, and numerous
private citizens who signed petitions submitted to your
Committee.  Testimony in opposition was received from the
Department of Human Services (DHS), Hawaii Association of
Realtors, Management Specialists Company, Association of
Apartment Owners of Makakilo Hale 1, and a private citizen.
Informational testimony was provided by the Real Estate
Commission, Adults and Childrens Alliance, State Farm Insurance
Company, and Redleaf National Institute.

     Your Committee finds that current laws do not permit family
child care homes to operate in condominiums, townhouses, and
apartments.  Yet, your Committee feels that the need for child
care is undisputed and that more child care homes should be
allowed in these buildings.  However, apartment owner
associations typically disallow child care homes for fear of

 
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liability.  This measure is intended to assuage the concerns over
liability by requiring the family child care home to obtain
liability insurance to cover the child care home.

     Your Committee has considered the comments of the Real
Estate Commission and its reference to the Attorney General's
Report pursuant to Act 303, Session Laws of Hawaii 1996.  Your
Committee responds to the concerns raised as follows:

     (1)  The "unintentional conflict" between subsections (a)
          and (b) in section 1 is resolved in the measure, as
          amended;

     (2)  Additional costs are a factor, but your Committee
          believes that the competition among insurers and the
          relatively safe track record of child care homes will
          mitigate against high insurance premiums;

     (3)  The measure, as amended, applies to existing and future
          family child care homes, and since there are no large
          numbers of family child care homes, the imposition upon
          the common interest communities should be minimal and
          outweighed by a legitimate state interest in the
          matter; and

     (4)  Potential unlimited liability to the association is
          resolved in the measure, as amended, by providing that
          the association's liability is limited to the amount of
          indemnification from the family child care home.

     Your Committee has amended this measure by:

     (1)  Providing that family child care homes shall not be
          prohibited in a condominium, apartment, or townhouse;

     (2)  Requiring that any improvements to the family child
          care home or to the common elements to comply with the
          Americans With Disabilities Act (ADA) shall be done and
          paid for by the family child care home;

     (3)  Allowing the family child care home and the association
          of apartment owners (APO) to consult with the
          Commission on Persons with Disabilities for advice on
          ADA compliance;

     (4)  Requiring the operator of the family child care home to
          obtain approval of the APO before doing any
          construction to the home or to the common areas for APO
          compliance purposes;

 
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     (5)  Providing immunity from liability for the APO for
          injuries to a child being cared for, or to the child's
          relatives, guardians, and caretakers that occur in the
          family child care home or on the common elements;

     (6)  Allowing the APO to require a family child care home,
          as a condition precedent to operating a child care
          home, to:

          (A)  Indemnify the APO for damages;

          (B)  Reimburse the APO for increases in insurance
               premiums;

          (C)  Require the child's parent, guardian, or caretaker
               to sign a waiver of liability against the APO; and

          (D)  Obtain liability insurance covering the family
               child care home and the common elements, and
               naming the APO as an additional insured;

     (7)  Providing definitions for terms used; 

     (8)  Deleting the:

          (A)  Limitation on indemnification of the APO as to
               excluding the common elements and as to policy
               limits of the liability policy of the family child
               care home;

          (B)  Prohibition on the child care home from settling
               any claims without prior approval of the APO;

          (C)  Liability of the APO for injury or death to the
               amount of indemnification from the family child
               care home; 

          (D)  References to "homeowners association" and
               including this term in the new definition of
               "association of apartment owners"; and

          (E)  Section 2 of the measure, relating to property
               insurance.

     Your Committee has also made technical, nonsubstantive
amendments for clarity and to reflect preferred drafting style.

     As affirmed by the record of votes of the members of your
Committee on Health and Human Services that is attached to this

 
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report, your Committee is in accord with the intent and purpose
of S.B. No. 513, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as S.B. No. 513,
S.D. 1, and be referred to the Committee on Government Operations
and Housing.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Health and Human
                                   Services,



                                   ______________________________
                                   SUZANNE CHUN OAKLAND, Chair

 
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