Child care lending pilot program

(a)

Loans authorized

Notwithstanding section 502(1) of the Small Business Investment Act of 1958, the proceeds of any loan described in section 502 of such Act may be used by the certified development company to provide loans to small, nonprofit child care businesses, provided that— (1)the loan will be used for a sound business purpose that has been approved by the Administrator of the Small Business Administration (hereafter in this section referred to as the Administrator); (2)each such business meets the eligibility requirements applicable to for-profit businesses receiving a similar loan, except for status as a for-profit business; (3)1 or more individuals have personally guaranteed the loan; (4)the small, non-profit child care business has clear and singular title to the collateral for the loan; and (5)the small, non-profit child care business has sufficient cash flow from its operations to meet its obligations on the loan and its normal and reasonable operating expenses. (b)

Limitation on volume

Not more than 7 percent of the total number of loans guaranteed in any fiscal year under title V of the Small Business Investment Act of 1958 may be awarded under the program described in this section. (c)

Small, nonprofit child care business

For purposes of this section, the term small, non-profit child care business means an organization that— (1)is described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code; (2)is primarily engaged in providing child care for infants, toddlers, pre-school, or pre-kindergarten children (or any combination thereof), may provide care for older children when they are not in school, and may offer pre-kindergarten educational programs; (3)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 preceding 2 completed fiscal years that does not exceed $2,500,000; and (4)is licensed as a child care provider by the District of Columbia, the insular area, or the State, in which it is located. (d)

Termination

No loan shall be made under this section after September 30, 2007. (e)

Reports

(1)

Small business administration

Not later than 6 months after the date of the enactment of this Act, and every 6 months thereafter until September 30, 2007, the Administrator shall submit a report to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives regarding the implementation of the loan program described in this section. Each such report shall include— (A)the date on which the loan program is implemented; (B)the date on which the rules are issued pursuant to subsection (f); and (C)the number and dollar amount of loans under the program applied for, approved, and disbursed during the previous 6 months. (2)

General accounting office

Not later than March 31, 2007, the Comptroller General of the United States shall submit a report to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives regarding the assistance provided under the loan program established by this section. Such report shall include information regarding 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 businesses have participated in the loan program; (C)a description and assessment of how the loan program was marketed; (D)by location (State, insular area, and District of Columbia) and in total, the number of small, nonprofit child care businesses that— (i)applied for loans under the program (stated separately for new and expanding child care providers); and (ii)received loan disbursements under the program (stated separately for new and expanding child care providers); (E)the total amount loaned to such businesses under the program; (F)the total number of loans made to such businesses under the program; (G)the average loan amount and term of loans made under the program; (H)the currency rate, delinquencies, defaults, and losses of the loans made under the program; (I)the number and percent of children served through the program who receive subsidized assistance; and (J)the number and percent of children served through the program who are low income. (3)

Access to information

(A)

Collection

The Administrator shall collect and maintain such information as may be necessary to carry out paragraph (2) from certified development centers and child care providers, and such centers and providers shall comply with a request for information from the Administrator for that purpose. (B)

Provision of information to GAO

The Administrator shall provide information collected under subparagraph (A) to the Comptroller General of the United States for purposes of the report required by paragraph (2). (f)

Rulemaking authority

Not later than 120 days after the date of the enactment of this Act, the Administrator shall issue final rules to carry out the loan program authorized by this section.