II 

111TH CONGRESS 

1ST SESSION S. 2661 

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 

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 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 2009’’. 

6 SEC. 2. DEFINITIONS. 

7 In this Act— 


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1 (1) the terms ‘‘Administration’’ and ‘‘Adminis2 trator’’ mean the Small Business Administration 

3 and the Administrator thereof, respectively; 

4 (2) the term ‘‘program’’ means the loan pro5 gram under section 502(b)(1)(B) of the Small Busi6 ness Investment Act of 1958, as added by this Act; 

7 (3) the term ‘‘small business concern’’ has the 

8 meaning given the term ‘‘small-business concern’’ in 

9 section 103 of the Small Business Investment Act of 

10 1958 (15 U.S.C. 662); and 

11 (4) the term ‘‘State’’ has the meaning given 

12 that term in section 103 of the Small Business In13 vestment Act of 1958 (15 U.S.C. 662). 

14 SEC. 3. CHILD CARE LENDING PILOT PROGRAM. 

15 (a) IN GENERAL.—Section 502 of the Small Business 

16 Investment Act of 1958 (15 U.S.C. 696) is amended— 

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

18 (A) by striking ‘‘The Administration may, 

19 in addition to its’’ and inserting the following: 

20 ‘‘(a) AUTHORIZATION.—The Administration may, in 

21 addition to the’’; 

22 (B) by striking ‘‘and such loans’’ and in23 serting ‘‘. Such loans’’; and 

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

25 the foregoing powers shall be subject to the folVerDate Nov 24 2008 21:48 Nov 03, 2009 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2661.IS S2661

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1 lowing restrictions and limitations:’’ and insert2 ing a period; 

3 (2) by inserting before paragraph (1) the fol4 lowing: 

5 ‘‘(b) RESTRICTIONS AND LIMITATIONS.—The author6 ity under subsection (a) shall be subject to the following 

7 restrictions and limitations:’’; and 

8 (3) in subsection (b)(1), as so designated— 

9 (A) by striking ‘‘The proceeds’’ and insert10 ing the following: 

11 ‘‘(A) IN GENERAL.—The proceeds’’; 

12 (B) by striking ‘‘such loan’’ and inserting 

13 ‘‘loan described in subsection (a)’’; and 

14 (C) by adding at the end the following: 

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

16 CARE BUSINESSES.— 

17 ‘‘(i) IN GENERAL.—Notwithstanding 

18 paragraph (1), the proceeds of any loan 

19 described in subsection (a) may be used by 

20 a development company to assist a small, 

21 nonprofit child care business, if— 

22 ‘‘(I) the loan is used for a sound 

23 business purpose that has been ap24 proved by the Administrator; 


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1 ‘‘(II) the small, nonprofit child 

2 care business meets all of the eligi3 bility requirements applicable to for4 profit businesses under this title, ex5 cept for status as a for-profit busi6 ness; 

7 ‘‘(III) 1 or more individuals has 

8 personally guaranteed the loan; 

9 ‘‘(IV) the small, nonprofit child 

10 care business has clear and singular 

11 title to the collateral for the loan; and 

12 ‘‘(V) the small, nonprofit child 

13 care business has sufficient cash flow 

14 from the operations of the business to 

15 meet the obligations on the loan and 

16 the normal and reasonable operating 

17 expenses of the business. 

18 ‘‘(ii) LIMITATION ON VOLUME.—Not 

19 more than 7 percent of the total number of 

20 loans guaranteed in any fiscal year under 

21 this title may be used for purposes de22 scribed in this subparagraph. 

23 ‘‘(iii) DEFINITION.—In this subpara24 graph, the term ‘small, nonprofit child care 

25 business’ means an establishment that— 


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1 ‘‘(I) is organized in accordance 

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

3 Revenue Code of 1986; 

4 ‘‘(II) is primarily engaged in pro5 viding child care for infants, toddlers, 

6 pre-school, or pre-kindergarten chil7 dren (or any combination thereof), 

8 and may provide care for older chil9 dren when the children are not in 

10 school and offer pre-kindergarten edu11 cational programs; 

12 ‘‘(III) including its affiliates, 

13 has— 

14 ‘‘(aa) a tangible net worth of 

15 not more than $7,000,000; and 

16 ‘‘(bb) an average net income 

17 (excluding any carryover losses) 

18 for the 2 completed fiscal years 

19 before the date of the application 

20 of not more than $2,500,000; 

21 and 

22 ‘‘(IV) is licensed as a child care 

23 provider by the State in which the es24 tablishment is located.’’. 

25 (b) SUNSET.— 


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1 (1) IN GENERAL.—Effective October 1, 2012, 

2 section 502(b)(1) of the Small Business Investment 

3 Act of 1958 (15 U.S.C. 696(b)(1)) is amended— 

4 (A) by striking subparagraph (B); and 

5 (B) by striking ‘‘USE OF PROCEEDS.—’’ 

6 and all that follows through ‘‘The proceeds’’ 

7 and inserting ‘‘USE OF PROCEEDS.—The pro8 ceeds’’. 

9 (2) APPLICABILITY.—Notwithstanding para10 graph (1), section 502(b)(1)(B) of the Small Busi11 ness Investment Act of 1958, as added by this Act, 

12 shall apply to any loan authorized under that sub13 paragraph that is applied for, approved, or disbursed 

14 during the period beginning on the date of enact15 ment of this Act and ending on September 30, 2012. 

16 SEC. 4. REPORTS. 

17 (a) SMALL BUSINESS ADMINISTRATION.— 

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

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

20 6 months thereafter until March 31, 2013, the Ad21 ministrator shall submit a report on the implementa22 tion of the program to— 

23 (A) the Committee on Small Business and 

24 Entrepreneurship of the Senate; and 


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1 (B) the Committee on Small Business of 

2 the House of Representatives. 

3 (2) CONTENTS.—Each report under paragraph 

4 (1) shall contain— 

5 (A) the date on which the program is im6 plemented; 

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

8 under section 5; and 

9 (C) the number and dollar amount of loans 

10 under section 502 of the Small Business Invest11 ment Act of 1958 (15 U.S.C. 696) applied for, 

12 approved, and disbursed during the 6-month pe13 riod before the date of the report— 

14 (i) to assist nonprofit child care busi15 nesses under the program; and 

16 (ii) to assist for-profit child care busi17 nesses. 

18 (b) GOVERNMENT ACCOUNTABILITY OFFICE.— 

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

20 2012, the Comptroller General of the United States 

21 shall submit a report on the program to— 

22 (A) the Committee on Small Business and 

23 Entrepreneurship of the Senate; and 

24 (B) the Committee on Small Business of 

25 the House of Representatives. 


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1 (2) CONTENTS.—The report under paragraph 

2 (1) shall contain information gathered during the 

3 first 2 years of the program, including— 

4 (A) an evaluation of the timeliness of the 

5 implementation of the program; 

6 (B) a description of the effectiveness and 

7 ease with which development companies, lend8 ers, and small business concerns have partici9 pated in the program; 

10 (C) a description and assessment of how 

11 the program was marketed; 

12 (D) the number of small child care busi13 nesses in each State and in the United States, 

14 categorized by status as a for-profit or non15 profit business, that— 

16 (i) applied for a loan under section 

17 502 of the Small Business Investment Act 

18 of 1958 (15 U.S.C. 696) (and, for each 

19 such business, whether the business was a 

20 new or expanding small child care busi21 ness; 

22 (ii) were approved for a loan under 

23 section 502 of that Act; and 

24 (iii) received a loan disbursement 

25 under section 502 of that Act (and, for 


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1 each such business, whether the business 

2 was a new or expanding small child care 

3 business); and 

4 (E) categorized by status as a for-profit or 

5 nonprofit business— 

6 (i) with respect to small child care 

7 businesses described under subparagraph 

8 (D)(iii), the number of such businesses in 

9 each State, as of the year of enactment of 

10 this Act; 

11 (ii) the total amount loaned to small 

12 child care businesses under section 502 of 

13 the Small Business Investment Act of 

14 1958 (15 U.S.C. 696); 

15 (iii) the total number of loans to small 

16 child care businesses under section 502 of 

17 that Act; 

18 (iv) the average amount and term of 

19 loans to small child care businesses under 

20 section 502 of that Act; 

21 (v) the currency rate, delinquencies, 

22 defaults, and losses of loans to small child 

23 care businesses under section 502 of that 

24 Act; 


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1 (vi) the number and percent of chil2 dren who receive subsidized assistance that 

3 are served using a loan to a small child 

4 care business under section 502 of that 

5 Act; and 

6 (vii) the number and percent of chil7 dren who are low income that are served 

8 using a loan to a small child care business 

9 under section 502 of that Act. 

10 (3) ACCESS TO INFORMATION.— 

11 (A) IN GENERAL.—The Administrator 

12 shall collect and maintain such information as 

13 may be necessary to carry out this subsection 

14 from development companies and small child 

15 care businesses, and such companies and busi16 nesses shall comply with a request for informa17 tion from the Administration for that purpose. 

18 (B) PROVISION OF INFORMATION TO GOV19 ERNMENT ACCOUNTABILITY OFFICE.—The Ad20 ministration shall provide information collected 

21 under this paragraph to the Comptroller Gen22 eral of the United States for purposes of the re23 port required under this subsection. 


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1 SEC. 5. RULEMAKING AUTHORITY. 

2 Not later than 120 days after the date of enactment 

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

4 carry out the loan program authorized under section 

5 502(b)(1)(B) of the Small Business Investment Act of 

6 1958, as added by this Act. 

Æ 


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