I 

109TH CONGRESS 

1ST SESSION H. R. 167 

To amend the Small Business Investment Act of 1958 to establish a pilot 

program for lending to small, nonprofit child care businesses. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 4, 2005 

Ms. MILLENDER-MCDONALD introduced the following bill; which was referred 

to the Committee on Small Business 

A BILL 

To amend the Small Business Investment Act of 1958 to 

establish a pilot program for lending to small, nonprofit 

child care businesses. 

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. 

4 This Act may be cited as the ‘‘Child Care Lending 

5 Pilot Act of 2005’’. 

6 SEC. 2. CHILD CARE LENDING PILOT PROGRAM. 

7 (a) LOANS AUTHORIZED.—Notwithstanding section 

8 502(1) of the Small Business Investment Act of 1958, the 

9 proceeds of any loan described in section 502 of such Act 

10 may be used by the certified development company to pro-
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1 vide loans to small, nonprofit child care businesses, pro2 vided that— 

3 (1) the loan will be used for a sound business 

4 purpose that has been approved by the Adminis5 trator of the Small Business Administration (here6 after in this section referred to as the Adminis7 trator); 

8 (2) each such business meets the eligibility re9 quirements applicable to for-profit businesses receiv10 ing a similar loan, except for status as a for-profit 

11 business; 

12 (3) 1 or more individuals have personally guar13 anteed the loan; 

14 (4) the small, non-profit child care business has 

15 clear and singular title to the collateral for the loan; 

16 and 

17 (5) the small, non-profit child care business has 

18 sufficient cash flow from its operations to meet its 

19 obligations on the loan and its normal and reason20 able operating expenses. 

21 (b) LIMITATION ON VOLUME.—Not more than 7 per22 cent of the total number of loans guaranteed in any fiscal 

23 year under title V of the Small Business Investment Act 

24 of 1958 may be awarded under the program described in 

25 this section. 
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1 (c) SMALL, NONPROFIT CHILD CARE BUSINESS.— 

2 For purposes of this section, the term ‘‘small, non-profit 

3 child care business’’ means an organization that— 

4 (1) is described in section 501(c)(3) of the In5 ternal Revenue Code of 1986 and exempt from tax 

6 under section 501(a) of such Code; 

7 (2) is primarily engaged in providing child care 

8 for infants, toddlers, pre-school, or pre-kindergarten 

9 children (or any combination thereof), may provide 

10 care for older children when they are not in school, 

11 and may offer pre-kindergarten educational pro12 grams; 

13 (3) including its affiliates, has tangible net 

14 worth that does not exceed $7,000,000, and has av15 erage net income (excluding any carryover losses) for 

16 the preceding 2 completed fiscal years that does not 

17 exceed $2,500,000; and 

18 (4) is licensed as a child care provider by the 

19 District of Columbia, the insular area, or the State, 

20 in which it is located. 

21 (d) TERMINATION.—No loan shall be made under 

22 this section after September 30, 2007. 

23 (e) REPORTS.— 

24 (1) SMALL BUSINESS ADMINISTRATION.—Not 

25 later than 6 months after the date of the enactment 
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1 of this Act, and every 6 months thereafter until Sep2 tember 30, 2007, the Administrator shall submit a 

3 report to the Committee on Small Business and En4 trepreneurship of the Senate and the Committee on 

5 Small Business of the House of Representatives re6 garding the implementation of the loan program de7 scribed in this section. Each such report shall in8 clude— 

9 (A) the date on which the loan program is 

10 implemented; 

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

12 pursuant to subsection (f); and 

13 (C) the number and dollar amount of loans 

14 under the program applied for, approved, and 

15 disbursed during the previous 6 months. 

16 (2) GENERAL ACCOUNTING OFFICE.—Not later 

17 than March 31, 2007, the Comptroller General of 

18 the United States shall submit a report to the Com19 mittee on Small Business and Entrepreneurship of 

20 the Senate and the Committee on Small Business of 

21 the House of Representatives regarding the assist22 ance provided under the loan program established by 

23 this section. Such report shall include information 

24 regarding the first 2 years of the loan program, in25 cluding— 
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1 (A) an evaluation of the timeliness of the 

2 implementation of the loan program; 

3 (B) a description of the effectiveness and 

4 ease with which certified development compa5 nies, lenders, and small businesses have partici6 pated in the loan program; 

7 (C) a description and assessment of how 

8 the loan program was marketed; 

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

10 District of Columbia) and in total, the number 

11 of small, nonprofit child care businesses that— 

12 (i) applied for loans under the pro13 gram (stated separately for new and ex14 panding child care providers); and 

15 (ii) received loan disbursements under 

16 the program (stated separately for new 

17 and expanding child care providers); 

18 (E) the total amount loaned to such busi19 nesses under the program; 

20 (F) the total number of loans made to 

21 such businesses under the program; 

22 (G) the average loan amount and term of 

23 loans made under the program; 
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1 (H) the currency rate, delinquencies, de2 faults, and losses of the loans made under the 

3 program; 

4 (I) the number and percent of children 

5 served through the program who receive sub6 sidized assistance; and 

7 (J) the number and percent of children 

8 served through the program who are low in9 come. 

10 (3) ACCESS TO INFORMATION.— 

11 (A) COLLECTION.—The Administrator 

12 shall collect and maintain such information as 

13 may be necessary to carry out paragraph (2) 

14 from certified development centers and child 

15 care providers, and such centers and providers 

16 shall comply with a request for information 

17 from the Administrator for that purpose. 

18 (B) PROVISION OF INFORMATION TO

19 GAO.—The Administrator shall provide informa20 tion collected under subparagraph (A) to the 

21 Comptroller General of the United States for 

22 purposes of the report required by paragraph 

23 (2). 

24 (f) RULEMAKING AUTHORITY.—Not later than 120 

25 days after the date of the enactment of this Act, the Ad-
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1 ministrator shall issue final rules to carry out the loan 

2 program authorized by this section. 

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