Child Care Lending Pilot Act of 2006

109th CONGRESS
2d Session

S. 2646

To create a 3-year pilot program that makes small, nonprofit child care businesses eligible for loans under title V of the Small Business Investment Act of 1958.

IN THE SENATE OF THE UNITED STATES

April 25, 2006

Mr. KERRY introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship

A BILL

To create a 3-year pilot program that makes small, nonprofit child care businesses eligible for loans under title V of the Small Business Investment Act of 1958.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; DEFINITIONS.

(a) Short Title- This Act may be cited as the `Child Care Lending Pilot Act of 2006'.

(b) Definitions- In this Act--

(1) the terms `Administration' and `Administrator' mean the Small Business Administration and the Administrator thereof, respectively; and

(2) the term `small business concern' has the meaning given the term in section 3 of the Small Business Act (15 U.S.C. 632).

SEC. 2. CHILD CARE LENDING PILOT PROGRAM.

Section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 696) is amended--

(1) in the matter preceding paragraph (1)--

(A) by striking `The Administration' and inserting the following:

`(a) Authorization- The Administration';

(B) by striking `and such loans' and inserting `. Such loans';

Provided, however

(D) by adding at the end the following:

`(b) Restrictions and Limitations- The authority under subsection (a) shall be subject to the following restrictions and limitations:'; and

(2) in paragraph (1)--

(A) by inserting after `USE OF PROCEEDS- ' the following:

`(A) IN GENERAL- ;' and

(B) by adding at the end the following:

`(B) LOANS TO SMALL, NONPROFIT CHILD CARE BUSINESSES-

`(i) IN GENERAL- Notwithstanding subsection (a)(1), the proceeds of any loan described in subsection (a) may be used by the certified development company to assist a small, nonprofit child care business, if--

`(I) the loan is used for a sound business purpose that has been approved by the Administration;

`(II) each such business meets all of the same eligibility requirements applicable to for-profit businesses under this title, except for status as a for-profit business;

`(III) 1 or more individuals has personally guaranteed the loan;

`(IV) each such business has clear and singular title to the collateral for the loan; and

`(V) each such business has sufficient cash flow from its operations to meet its obligations on the loan and its normal and reasonable operating expenses.

`(ii) LIMITATION ON VOLUME- Not more than 7 percent of the total number of loans guaranteed in any fiscal year under this title may be awarded under this subparagraph.

`(iii) DEFINED TERM- For purposes of this subparagraph, the term `small, nonprofit child care business' means an establishment that--

`(I) is organized in accordance with section 501(c)(3) of the Internal Revenue Code of 1986;

`(II) is primarily engaged in providing child care for infants, toddlers, pre-school, or pre-kindergarten children (or any combination thereof), and may provide care for older children when they are not in school, and may offer pre-kindergarten educational programs;

`(III) including its affiliates, has tangible net worth that does not exceed $7,000,000, and has average net income (excluding any carryover losses) for the 2 completed fiscal years preceding the application that does not exceed $2,500,000; and

`(IV) is licensed as a child care provider by the State, the insular area, or the District of Columbia in which it is located.

`(iv) SUNSET PROVISION- This subparagraph shall remain in effect until September 30, 2009, and shall apply to all loans authorized under this subparagraph that are applied for, approved, or disbursed during the period beginning on the date of enactment of this subparagraph and ending on September 30, 2009.'.

SEC. 3. REPORTS.

(a) Small Business Administration-

(1) IN GENERAL- Not later than 6 months after the date of enactment of this Act, and every 6 months thereafter until September 30, 2009, the Administrator shall submit a report on the implementation of the program under section 502(b)(1)(B) of the Small Business Investment Act of 1958, as added by this Act, to--

(A) the Committee on Small Business and Entrepreneurship of the Senate; and

(B) the Committee on Small Business of the House of Representatives.

(2) CONTENTS- Each report under paragraph (1) shall contain--

(A) the date on which the program is implemented;

(B) the date on which the rules are issued under section 4; and

(C) the number and dollar amount of loans under the program applied for, approved, and disbursed during the previous 6 months--

(i) with respect to nonprofit child care businesses; and

(ii) with respect to for-profit child care businesses.

(b) Government Accountability Office-

(1) IN GENERAL- Not later than March 31, 2009, the Comptroller General of the United States shall submit a report on the child care small business loans authorized by section 502(b)(1)(B) of the Small Business Investment Act of 1958, as added by this Act, to--

(A) the Committee on Small Business and Entrepreneurship of the Senate; and

(B) the Committee on Small Business of the House of Representatives.

(2) CONTENTS- The report under paragraph (1) shall contain information gathered during the first 2 years of the loan program, including--

(A) an evaluation of the timeliness of the implementation of the loan program;

(B) a description of the effectiveness and ease with which certified development companies, lenders, and small business concerns have participated in the loan program;

(D) by location (State, insular area, and the District of Columbia) and in total, the number of child care small businesses, categorized by status as a for-profit or nonprofit business, that--

(i) applied for a loan under the program (and whether it was a new or expanding child care provider);

(ii) were approved for a loan under the program; and

(iii) received a loan disbursement under the program (and whether they are a new or expanding child care provider); and

(E) with respect to businesses described under subparagraph (D)(iii)--

(i) the number of such businesses in each State, insular area, and the District of Columbia, as of the year of enactment of this Act;

(ii) the total amount loaned to such businesses under the program;

(iii) the total number of loans to such businesses under the program;

(iv) the average loan amount and term;

(v) the currency rate, delinquencies, defaults, and losses of the loans;

(vi) the number and percent of children served who receive subsidized assistance; and

(vii) the number and percent of children served who are low income.

(3) ACCESS TO INFORMATION-

(A) IN GENERAL- The Administration shall collect and maintain such information as may be necessary to carry out this subsection from certified development centers and child care providers, and such centers and providers shall comply with a request for information from the Administration for that purpose.

(B) PROVISION OF INFORMATION TO GOVERNMENT ACCOUNTABILITY OFFICE- The Administration shall provide information collected under this paragraph to the Comptroller General of the United States for purposes of the report required by this subsection.

SEC. 4. RULEMAKING AUTHORITY.

Not later than 120 days after the date of enactment of this Act, the Administrator shall issue final rules to carry out the loan program authorized by section 502(b)(1)(B) of the Small Business Investment Act of 1958, as added by this Act.

END