Colorado lawmakers proposed to create the state's first regulations focused on childcare centers that private investors own.
The proposal, which the Colorado House of Representatives initially approved on Tuesday, marks the latest development in controlling how these centers work. Supporters of the proposal note that it would set guidelines for the increasing number of childcare centers in Colorado that for-profit companies back.
Regulations for Investor-Owned Childcare Centers
The proposed rules would only apply to childcare centers across the state that institutional investors and private equity firms control. Republican lawmakers tried to broaden the regulations to also apply to all childcare providers.
However, state Rep. Lorena Garcia, who sponsored the bill, argued that investor-owned childcare centers are vastly different from independent operators. She noted that they are making changes to the centers to fit their profit model, which, according to KUNC, requires transparency.
The proposal comes as investors have bought up many previously independent businesses in recent years. These include funeral parlors, nursing homes, and childcare centers. Investment firms control as much as 15% of the state's childcare capacity.
House Bill 25-1011 includes provisions that would require investment firms to give 60 days' notice before they lay off employees. This was designed to prevent them from bolstering profits by cutting the centers' workforces.
Issues With Private Owners
Many people have been raising concerns about the issue for some time now, and one example is that families at a Highlands Ranch child care center received startling news in July 2024. This was because the center was temporarily closing after being visited by the county health department, Chalkbeat reported.
It was revealed that the owner of the center failed to submit the required construction plans to the Douglas County Health Department. They also failed to acquire the necessary construction permits from the county's building division.
Furthermore, a state childcare licensing inspector found several safety violations related to the construction of the center. For example, tools and debris blocked emergency exits, and paint and construction materials were easily accessible to children.
It was later revealed that the renovation of the center was the result of a change in ownership. A national chain known as The Nest Schools purchased it from a small local company earlier that month, according to The Denver Post.
