A proposal to create the state’s first regulations for investor-owned childcare centers won initial approval in the Colorado House of Representatives Tuesday. Backers say it will set guidelines for the growing number of centers in the state backed by for-profit companies.
The rules apply only to childcare centers controlled by institutional investors and private equity firms. Republicans tried to broaden the regulations to apply to all childcare providers, but state Rep. Lorena García, a sponsor of the bill, said investor-owned centers are different from independent operators.
"When you are coming in and you are buying a childcare center and you are making changes in order to fit your profit model, that you need to be transparent about," said García, D-Denver. "This business model is fundamentally different than other models of childcare."
A lot of businesses that used to be independent have been bought up by investors — funeral parlors, nursing homes, and now childcare. Investment firms control as much as 15% of Colorado’s childcare capacity.
The proposed regulations, House Bill 25-1011, include requiring investment firms to give 60 days’ notice before making layoffs. That’s to keep them from bolstering profits by slashing staff. Firms would also have to be upfront with families about costs.
And more rules could come later. Legislators have weighed capping waiting list fees and requiring centers to post pricing online.
Pushback has led them to set aside those ideas, at least for now. The measure still needs to be considered by the state Senate.
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