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HOUSE_OVERSIGHT_024524

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incentives to families and employers to offset costs related to employer-provided child care facilities. However, these tax incentives are subject to change. KLC OpCo is also subject to the Fair Labor Standards Act, which governs such matters as minimum wages, overtime compensation and working conditions. All of KLC OpCo's employees are paid at rates equal to or higher than the federal minimum wage. KLC OpCo is also subject to laws regulating its transportation of children. In 1998, the National Highway Traffic Safety Administration, or NHTSA, issued interpretive letters stating that automobile dealers may no longer sell 12 to 15-passenger vans intended to be used for the transportation of children to and from school by child care providers and that any vehicle designed to transport 11 persons or more must meet federal school bus standards If it is likely to be used significantly to transport children to and from school or school-related events. These interpretations and related changes in state and federal transportation regulations have affected the type of vehicle that the company may purchase for use in transporting children between schools and its centers and, in effect, required KLC OpCo to replace its remaining fleet of vans with school buses over time. These changes have increased the company's costs to transport children because school buses are more expensive to purchase and maintain and, in some jurisdictions, require drivers with commercial licenses. 11.12. Insurance KLC OpCo’s insurance program currently includes the foliowing types of policies: workers' compensation, commercial general liability, automobile liability, property, excess “umbrella” liability, directors' and officers’ liability and employment practices liability. These policies provide for a variety of coverages, which are subject to various limits, and include substantial deductibles or self-insured retentions. Special insurance is sometimes obtained with respect to specific hazards, if d

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