II 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; DEFINITIONS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Child Care Lending Pilot Act of 2006’’. 

6 (b) DEFINITIONS.—In this Act— 

7 (1) the terms ‘‘Administration’’ and ‘‘Adminis8 trator’’ mean the Small Business Administration 

9 and the Administrator thereof, respectively; and 


CCOLEMAN on PROD1PC71 with BILLS
2 

•S 2646 IS

1 (2) the term ‘‘small business concern’’ has the 

2 meaning given the term in section 3 of the Small 

3 Business Act (15 U.S.C. 632). 

4 SEC. 2. CHILD CARE LENDING PILOT PROGRAM. 

5 Section 502 of the Small Business Investment Act 

6 of 1958 (15 U.S.C. 696) is amended— 

7 (1) in the matter preceding paragraph (1)— 

8 (A) by striking ‘‘The Administration’’ and 

9 inserting the following: 

10 ‘‘(a) AUTHORIZATION.—The Administration’’; 

11 (B) by striking ‘‘and such loans’’ and in12 serting ‘‘. Such loans’’; 

13 (C) by striking ‘‘: Provided, however, That 

14 the foregoing powers shall be subject to the fol15 lowing restrictions and limitations:’’ and insert16 ing a period; and 

17 (D) by adding at the end the following: 

18 ‘‘(b) RESTRICTIONS AND LIMITATIONS.—The author19 ity under subsection (a) shall be subject to the following 

20 restrictions and limitations:’’; and 

21 (2) in paragraph (1)— 

22 (A) by inserting after ‘‘USE OF PRO23 CEEDS.—’’ the following: 

24 ‘‘(A) IN GENERAL.—;’’ and 

25 (B) by adding at the end the following: 


CCOLEMAN on PROD1PC71 with BILLS
3 

•S 2646 IS

1 ‘‘(B) LOANS TO SMALL, NONPROFIT CHILD

2 CARE BUSINESSES.— 

3 ‘‘(i) IN GENERAL.—Notwithstanding 

4 subsection (a)(1), the proceeds of any loan 

5 described in subsection (a) may be used by 

6 the certified development company to as7 sist a small, nonprofit child care business, 

8 if— 

9 ‘‘(I) the loan is used for a sound 

10 business purpose that has been ap11 proved by the Administration; 

12 ‘‘(II) each such business meets 

13 all of the same eligibility requirements 

14 applicable to for-profit businesses 

15 under this title, except for status as a 

16 for-profit business; 

17 ‘‘(III) 1 or more individuals has 

18 personally guaranteed the loan; 

19 ‘‘(IV) each such business has 

20 clear and singular title to the collat21 eral for the loan; and 

22 ‘‘(V) each such business has suf23 ficient cash flow from its operations to 

24 meet its obligations on the loan and 


CCOLEMAN on PROD1PC71 with BILLS
4 

•S 2646 IS

1 its normal and reasonable operating 

2 expenses. 

3 ‘‘(ii) LIMITATION ON VOLUME.—Not 

4 more than 7 percent of the total number of 

5 loans guaranteed in any fiscal year under 

6 this title may be awarded under this sub7 paragraph. 

8 ‘‘(iii) DEFINED TERM.—For purposes 

9 of this subparagraph, the term ‘small, non10 profit child care business’ means an estab11 lishment that— 

12 ‘‘(I) is organized in accordance 

13 with section 501(c)(3) of the Internal 

14 Revenue Code of 1986; 

15 ‘‘(II) is primarily engaged in pro16 viding child care for infants, toddlers, 

17 pre-school, or pre-kindergarten chil18 dren (or any combination thereof), 

19 and may provide care for older chil20 dren when they are not in school, and 

21 may offer pre-kindergarten edu22 cational programs; 

23 ‘‘(III) including its affiliates, has 

24 tangible net worth that does not ex25 ceed $7,000,000, and has average net 


CCOLEMAN on PROD1PC71 with BILLS
5 

•S 2646 IS

1 income (excluding any carryover 

2 losses) for the 2 completed fiscal years 

3 preceding the application that does 

4 not exceed $2,500,000; and 

5 ‘‘(IV) is licensed as a child care 

6 provider by the State, the insular 

7 area, or the District of Columbia in 

8 which it is located. 

9 ‘‘(iv) SUNSET PROVISION.—This sub10 paragraph shall remain in effect until Sep11 tember 30, 2009, and shall apply to all 

12 loans authorized under this subparagraph 

13 that are applied for, approved, or dis14 bursed during the period beginning on the 

15 date of enactment of this subparagraph 

16 and ending on September 30, 2009.’’. 

17 SEC. 3. REPORTS. 

18 (a) SMALL BUSINESS ADMINISTRATION.— 

19 (1) IN GENERAL.—Not later than 6 months 

20 after the date of enactment of this Act, and every 

21 6 months thereafter until September 30, 2009, the 

22 Administrator shall submit a report on the imple23 mentation of the program under section 

24 502(b)(1)(B) of the Small Business Investment Act 

25 of 1958, as added by this Act, to— 


CCOLEMAN on PROD1PC71 with BILLS
6 

•S 2646 IS

1 (A) the Committee on Small Business and 

2 Entrepreneurship of the Senate; and 

3 (B) the Committee on Small Business of 

4 the House of Representatives. 

5 (2) CONTENTS.—Each report under paragraph 

6 (1) shall contain— 

7 (A) the date on which the program is im8 plemented; 

9 (B) the date on which the rules are issued 

10 under section 4; and 

11 (C) the number and dollar amount of loans 

12 under the program applied for, approved, and 

13 disbursed during the previous 6 months— 

14 (i) with respect to nonprofit child care 

15 businesses; and 

16 (ii) with respect to for-profit child 

17 care businesses. 

18 (b) GOVERNMENT ACCOUNTABILITY OFFICE.— 

19 (1) IN GENERAL.—Not later than March 31, 

20 2009, the Comptroller General of the United States 

21 shall submit a report on the child care small busi22 ness loans authorized by section 502(b)(1)(B) of the 

23 Small Business Investment Act of 1958, as added by 

24 this Act, to— 


CCOLEMAN on PROD1PC71 with BILLS
7 

•S 2646 IS

1 (A) the Committee on Small Business and 

2 Entrepreneurship of the Senate; and 

3 (B) the Committee on Small Business of 

4 the House of Representatives. 

5 (2) CONTENTS.—The report under paragraph 

6 (1) shall contain information gathered during the 

7 first 2 years of the loan program, including— 

8 (A) an evaluation of the timeliness of the 

9 implementation of the loan program; 

10 (B) a description of the effectiveness and 

11 ease with which certified development compa12 nies, lenders, and small business concerns have 

13 participated in the loan program; 

14 (C) a description and assessment of how 

15 the loan program was marketed; 

16 (D) by location (State, insular area, and 

17 the District of Columbia) and in total, the num18 ber of child care small businesses, categorized 

19 by status as a for-profit or nonprofit business, 

20 that— 

21 (i) applied for a loan under the pro22 gram (and whether it was a new or ex23 panding child care provider); 

24 (ii) were approved for a loan under 

25 the program; and 


CCOLEMAN on PROD1PC71 with BILLS
8 

•S 2646 IS

1 (iii) received a loan disbursement 

2 under the program (and whether they are 

3 a new or expanding child care provider); 

4 and 

5 (E) with respect to businesses described 

6 under subparagraph (D)(iii)— 

7 (i) the number of such businesses in 

8 each State, insular area, and the District 

9 of Columbia, as of the year of enactment 

10 of this Act; 

11 (ii) the total amount loaned to such 

12 businesses under the program; 

13 (iii) the total number of loans to such 

14 businesses under the program; 

15 (iv) the average loan amount and 

16 term; 

17 (v) the currency rate, delinquencies, 

18 defaults, and losses of the loans; 

19 (vi) the number and percent of chil20 dren served who receive subsidized assist21 ance; and 

22 (vii) the number and percent of chil23 dren served who are low income. 

24 (3) ACCESS TO INFORMATION.— 


CCOLEMAN on PROD1PC71 with BILLS
9 

•S 2646 IS

1 (A) IN GENERAL.—The Administration 

2 shall collect and maintain such information as 

3 may be necessary to carry out this subsection 

4 from certified development centers and child 

5 care providers, and such centers and providers 

6 shall comply with a request for information 

7 from the Administration for that purpose. 

8 (B) PROVISION OF INFORMATION TO GOV9 ERNMENT ACCOUNTABILITY OFFICE.—The Ad10 ministration shall provide information collected 

11 under this paragraph to the Comptroller Gen12 eral of the United States for purposes of the re13 port required by this subsection. 

14 SEC. 4. RULEMAKING AUTHORITY. 

15 Not later than 120 days after the date of enactment 

16 of this Act, the Administrator shall issue final rules to 

17 carry out the loan program authorized by section 

18 502(b)(1)(B) of the Small Business Investment Act of 

19 1958, as added by this Act. 

Æ 


CCOLEMAN on PROD1PC71 with BILLS