(a) Any church or group of churches exempt from the state income tax levied by the Income Tax Act of 1929, § 26-51-101 et seq., when operating a child care facility shall be exempt from obtaining a license to operate the child care facility upon the receipt by the Division of Child Care and Early Childhood Education of the Department of Human Services of written request therefor. A written request shall be made by those churches desiring exemption to the division, which is mandated under the authority of this subchapter to license all child care facilities.

(b)

(1) In order to maintain an exempt status, the child care facility shall maintain in its files verification that its child care facility has met the required fire, safety, and health inspections on an annual basis and is in substantial compliance with published standards that similar nonexempt child care facilities are required to meet.

(2) Visits to review and advise exempt child care facilities shall be made as deemed necessary by the division to verify and maintain substantial compliance with all published standards for nonexempt child care facilities.

(3) Standards for substantial compliance shall not include those of a religious or curriculum nature so long as the health, safety, and welfare of the child is not endangered.

(4) Standards for corporal punishment shall be as established by present regulations unless alternative compliance is granted by the division.

(c)

(1) Any questions of substantial compliance with the published standards, adverse actions, founded licensing complaints, and denied requests for alternative compliance shall be appealed first through the division's internal appeal process and then may be appealed to the Child Care Appeal Review Panel for determination.

(2) Final administrative actions of the division shall be pursued by either party in the court of competent jurisdiction in the resident county of the child care facility under review.

(3) Challenge to the constitutionality or reasonableness of any regulation or statute may be made prior to any appeal under the Arkansas Administrative Procedure Act, § 25-15-201 et seq.

(d) As used in this section, the term "substantial compliance" and as used in §§ 20-78-201 -- 20-78-206, 20-78-208, 20-78-210 -- 20-78-214, and 20-78-218, the term "is being operated in accordance with this act" shall each mean that a church-operated exempt or a nonexempt child care facility is being operated within the minimum requirements for substantial compliance as promulgated by the division. It is the intent and purpose of this section that the term "substantial compliance" be applicable to all child care facilities.

(e) This section is cumulative to all other acts heretofore enacted.