II 111th CONGRESS 1st Session S. 2661 IN THE SENATE OF THE UNITED STATES November 2, 2009 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.

1.

Short title

This Act may be cited as the Child Care Lending Pilot Act of 2009.

2.

Definitions

In this Act— (1)the terms Administration and Administrator mean the Small Business Administration and the Administrator thereof, respectively; (2)the term program means the loan program under section 502(b)(1)(B) of the Small Business Investment Act of 1958, as added by this Act; (3)the term small business concern has the meaning given the term small-business concern in section 103 of the Small Business Investment Act of 1958 (15 U.S.C. 662); and (4)the term State has the meaning given that term in section 103 of the Small Business Investment Act of 1958 (15 U.S.C. 662).

3.

Child care lending pilot program

(a)

In general

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 may, in addition to its and inserting the following: (a)

Authorization

The Administration may, in addition to the ; (B)by striking and such loans and inserting . Such loans; and (C)by striking : Provided, however, That the foregoing powers shall be subject to the following restrictions and limitations: and inserting a period; (2)by inserting before paragraph (1) the following: (b)

Restrictions and limitations

The authority under subsection (a) shall be subject to the following restrictions and limitations: ; and (3)in subsection (b)(1), as so designated— (A)by striking The proceeds and inserting the following: (A)

In general

The proceeds ; (B)by striking such loan and inserting loan described in subsection (a); and (C)by adding at the end the following: (B)

Loans to small, nonprofit child care businesses

(i)

In general

Notwithstanding paragraph (1), the proceeds of any loan described in subsection (a) may be used by a 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 Administrator; (II)the small, nonprofit child care business meets all of the 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)the small, nonprofit child care business has clear and singular title to the collateral for the loan; and (V)the small, nonprofit child care business has sufficient cash flow from the operations of the business to meet the obligations on the loan and the normal and reasonable operating expenses of the business. (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 used for purposes described in this subparagraph. (iii)

Definition

In 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 the children are not in school and offer pre-kindergarten educational programs; (III)including its affiliates, has— (aa)a tangible net worth of not more than $7,000,000; and (bb)an average net income (excluding any carryover losses) for the 2 completed fiscal years before the date of the application of not more than $2,500,000; and (IV)is licensed as a child care provider by the State in which the establishment is located. . (b)

Sunset

(1)

In general

Effective October 1, 2012, section 502(b)(1) of the Small Business Investment Act of 1958 (15 U.S.C. 696(b)(1)) is amended— (A)by striking subparagraph (B); and (B)by striking Use of proceeds.— and all that follows through The proceeds and inserting Use of proceeds.—The proceeds. (2)

Applicability

Notwithstanding paragraph (1), section 502(b)(1)(B) of the Small Business Investment Act of 1958, as added by this Act, shall apply to any loan authorized under that subparagraph that is applied for, approved, or disbursed during the period beginning on the date of enactment of this Act and ending on September 30, 2012.

4.

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 March 31, 2013, the Administrator shall submit a report on the implementation of the program 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 5; and (C)the number and dollar amount of loans under section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 696) applied for, approved, and disbursed during the 6-month period before the date of the report— (i)to assist nonprofit child care businesses under the program; and (ii)to assist for-profit child care businesses. (b)

Government accountability office

(1)

In general

Not later than March 31, 2012, the Comptroller General of the United States shall submit a report on the program 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 program, including— (A)an evaluation of the timeliness of the implementation of the program; (B)a description of the effectiveness and ease with which development companies, lenders, and small business concerns have participated in the program; (C)a description and assessment of how the program was marketed; (D)the number of small child care businesses in each State and in the United States, categorized by status as a for-profit or nonprofit business, that— (i)applied for a loan under section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 696) (and, for each such business, whether the business was a new or expanding small child care business; (ii)were approved for a loan under section 502 of that Act; and (iii)received a loan disbursement under section 502 of that Act (and, for each such business, whether the business was a new or expanding small child care business); and (E)categorized by status as a for-profit or nonprofit business— (i)with respect to small child care businesses described under subparagraph (D)(iii), the number of such businesses in each State, as of the year of enactment of this Act; (ii)the total amount loaned to small child care businesses under section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 696); (iii)the total number of loans to small child care businesses under section 502 of that Act; (iv)the average amount and term of loans to small child care businesses under section 502 of that Act; (v)the currency rate, delinquencies, defaults, and losses of loans to small child care businesses under section 502 of that Act; (vi)the number and percent of children who receive subsidized assistance that are served using a loan to a small child care business under section 502 of that Act; and (vii)the number and percent of children who are low income that are served using a loan to a small child care business under section 502 of that Act. (3)

Access to information

(A)

In general

The Administrator shall collect and maintain such information as may be necessary to carry out this subsection from development companies and small child care businesses, and such companies and businesses 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 under this subsection.

5.

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 under section 502(b)(1)(B) of the Small Business Investment Act of 1958, as added by this Act.