I 

110TH CONGRESS 

1ST SESSION H. R. 1412 

To establish a temporary program under which emergency loans are made 

to small businesses that are nonprofit child care businesses. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 8, 2007 

Mr. JEFFERSON (for himself, Mr. TAYLOR, Ms. NORTON, Mr. ELLISON, and 

Ms. CORRINE BROWN of Florida) introduced the following bill; which was 

referred to the Committee on Small Business 

A BILL 

To establish a temporary program under which emergency 

loans are made to small businesses that are 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 ‘‘Emergency Child Care 

5 Lending for the Gulf Coast Act of 2007’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) The Census reported pre-Katrina that there 

9 were— 


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1 (A) 25,000 two-parent families in New Or2 leans with children under 18; 

3 (B) 26,000 female householders with chil4 dren under 18, and no husband present; and 

5 (C) more than 18,000 householders who 

6 were more than 65 years old and living alone. 

7 (2) Studies have stated that reopening child 

8 care facilities was crucial for helping parents get 

9 back to work and businesses to recover. 

10 (3) Studies have shown that without available 

11 and affordable child care economic recovery will be 

12 greatly impeded and lead to a reduction in worker 

13 productivity. 

14 (4) In New Orleans before the Hurricanes 

15 Katrina and Rita, the city had 1,912 day-care slots 

16 at 266 licensed centers, but now 80 percent of those 

17 centers and 75 percent of those slots are gone. 

18 (5) The National Association of Child Care Re19 source and Referral Agencies reported in a study 

20 published by the Mississippi State University Early 

21 Childhood Institute that between 62 percent to 94 

22 percent of the licensed child care slots in the three 

23 coastal counties hardest hit by Hurricanes Katrina 

24 and Rita in Mississippi were lost. 


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1 (6) In Jackson County, Mississippi, initial as2 sessment found that one-fourth of the county’s li3 censed centers were damaged beyond repair, rep4 resenting 11 percent of the county’s licensed child 

5 care capacity and another 39 percent of centers 

6 needed repairs. 

7 (7) Studies have stated the most effective way 

8 to rebuild the child care infrastructure is to— 

9 (A) help child care programs in the dis10 aster area reopen as rapidly as was safe by giv11 ing priority to licensed early childhood facilities; 

12 and 

13 (B) recruit, train, and retain child-care 

14 professionals. 

15 SEC. 3. EMERGENCY CHILD CARE LENDING PILOT PRO16 GRAM. 

17 (a) LOANS AUTHORIZED.—Notwithstanding section 

18 502(1) of the Small Business Investment Act of 1958, the 

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

20 may be used by the certified development company to pro21 vide loans to small, nonprofit child care businesses, pro22 vided that— 

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

24 purpose that has been approved by the Adminis25 trator of the Small Business Administration (hereVerDate Aug 31 2005 17:45 Mar 11, 2007 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1412.IH H1412

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1 after in this section referred to as the Adminis2 trator); 

3 (2) each such business meets the eligibility re4 quirements applicable to for-profit businesses receiv5 ing a similar loan, except for status as a for-profit 

6 business; 

7 (3) 1 or more individuals have personally guar8 anteed the loan; 

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

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

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

12 supplied sufficient information supporting the ability 

13 to obtain future cash flow from its operations to 

14 meet its obligations on the loan and its normal and 

15 reasonable operating expenses; and 

16 (6) have a track record of providing child care 

17 services in the presidentially declared disaster areas 

18 in the Gulf Coast region. 

19 (b) LIMITATION ON VOLUME.—Not more than 3 per20 cent of the total number of loans guaranteed in fiscal year 

21 2008 and 2009 under title V of the Small Business Invest22 ment Act of 1958 may be awarded under the program de23 scribed in this section. 


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1 (c) SMALL, NON-PROFIT 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 December 30, 2008. 

23 (e) REPORTS.— 

24 (1) SMALL BUSINESS ADMINISTRATION.—Not 

25 later than 3 months after the date of the enactment 


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1 of this Act, and every 3 months thereafter until Sep2 tember 30, 2008, 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); 

13 (C) the number and dollar amount of loans 

14 under the program applied for, approved, and 

15 disbursed during the previous 3 months; and 

16 (D) the number of loans made to minority17 owned firms and to woman-owned firms. 

18 (2) GENERAL ACCOUNTING OFFICE.—Not later 

19 than March 31, 2009, the Comptroller General of 

20 the United States shall submit a report to the Com21 mittee on Small Business and Entrepreneurship of 

22 the Senate and the Committee on Small Business of 

23 the House of Representatives regarding the assist24 ance provided under the loan program established by 

25 this section. Such report shall include information 


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1 regarding the first 2 years of the loan program, in2 cluding— 

3 (A) an evaluation of the timeliness of the 

4 implementation of the loan program; 

5 (B) a description of the effectiveness and 

6 ease with which certified development compa7 nies, lenders, and small businesses have partici8 pated in the loan program; 

9 (C) a description and assessment of how 

10 the loan program was marketed; 

11 (D) by location in total, the number of 

12 small, nonprofit child care businesses that— 

13 (i) applied for loans under the pro14 gram (stated separately for new and ex15 panding child care providers); and 

16 (ii) received loan disbursements under 

17 the program (stated separately for new 

18 and expanding child care providers); 

19 (E) the total amount loaned to such busi20 nesses under the program; 

21 (F) the total number of loans made to 

22 such businesses under the program; 

23 (G) the average loan amount and term of 

24 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 minority 

9 or low-income. 

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 60 

25 days after the date of the enactment of this Act, the AdVerDate Aug 31 2005 17:45 Mar 11, 2007 Jkt 059200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H1412.IH H1412

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1 ministrator shall issue final rules to carry out the loan 

2 program authorized by this section. 

Æ 


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