PRIOR PRINTER'S NO. 2977 PRINTER'S NO. 3830
No. 2369 Session of 1993
INTRODUCED BY STURLA, BLAUM, BUXTON, COY, BELFANTI, VAN HORNE,
SURRA, BAKER, FAJT, ROONEY, CURRY, DeLUCA, HERMAN, MARKOSEK,
GORDNER, CAWLEY, SANTONI, STEELMAN, CESSAR, PISTELLA, TRELLO,
FICHTER, SAYLOR, MUNDY, PRESTON, LEDERER, GERLACH, HENNESSEY,
CIVERA, VEON, FREEMAN, WILLIAMS, CAPPABIANCA AND JAMES,
DECEMBER 14, 1993
AS REPORTED FROM COMMITTEE ON AGING AND YOUTH, HOUSE OF
REPRESENTATIVES, AS AMENDED, JUNE 8, 1994
AN ACT
1 Establishing the Child Day-care Facilities LOAN AND Loan <--
2 Guarantee Fund; providing for terms and conditions of loans
3 and for a penalty; and making an appropriation.
4 TABLE OF CONTENTS
5 Section 1. Short title.
6 Section 2. Definitions.
7 Section 3. Fund.
8 Section 4. Application for loan AND LOAN guarantee assistance. <--
9 Section 5. Types of financial assistance.
10 Section 6. Prerequisites to guarantee loan FOR LOANS <--
11 AND LOAN GUARANTEES.
12 Section 7. Considerations in guaranteeing loans.
13 Section 8. Terms and conditions.
14 Section 9. Receipts. <--
15 Section 10. Expenses and disbursements.
16 Section 11. Violations of guarantee agreement.
1 Section 12. False statements or reports.
2 Section 13. Rules and regulations.
3 Section 14. Appropriation.
4 Section 15. Effective date.
5 SECTION 9. LOANS. <--
6 SECTION 10. RECEIPTS.
7 SECTION 11. EXPENSES AND DISBURSEMENTS.
8 SECTION 12. LIMITATIONS ON FUND.
9 SECTION 13. VIOLATIONS OF GUARANTEE AGREEMENT.
10 SECTION 14. FALSE STATEMENTS OR REPORTS.
11 SECTION 15. RULES AND REGULATIONS.
12 SECTION 16. APPROPRIATION.
13 SECTION 17. EFFECTIVE DATE.
14 The General Assembly of the Commonwealth of Pennsylvania
15 hereby enacts as follows:
16 Section 1. Short title.
17 This act shall be known and may be cited as the Child Day- <--
18 care Facilities Loan AND LOAN Guarantee Act. <--
19 Section 2. Definitions.
20 The following words and phrases when used in this act shall
21 have the meanings given to them in this section unless the
22 context clearly indicates otherwise:
23 "ADULT DAY CARE." SERVICES SIMULTANEOUSLY PROVIDED AT AN <--
24 OLDER ADULT DAILY LIVING CENTER FOR FOUR OR MORE CLIENTS WHO ARE
25 NOT RELATIVES OF THE OPERATOR FOR PART OF A 24-HOUR DAY.
26 "Child day care." In lieu of parental care given for part of
27 the 24-hour day to children under 16 years of age, away from
28 their own homes. The term does not include child day care
29 furnished in places of worship during religious services.
30 "Department." The Department of Commerce of the
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1 Commonwealth.
2 "Facility." A State-licensed, certified or approved STATE- <--
3 APPROVED CHILD DAY-CARE facility or program, INCLUDING A <--
4 REGISTERED FAMILY DAY-CARE HOME.
5 "Fund." The Child Day-care Facilities Loan AND LOAN <--
6 Guarantee Fund.
7 Section 3. Fund.
8 (a) Establishment.--There is hereby established a nonlapsing
9 revolving fund to be known as the Child Day-care Facilities Loan <--
10 AND LOAN Guarantee Fund within the State Treasury for the <--
11 purpose of MAKING OR guaranteeing loans for the expansion, <--
12 development or upgrading of site improvements for compliance <--
13 with State and local health and safety standards at child day-
14 care OR ADULT DAY-CARE facilities in this Commonwealth. <--
15 (b) Administration.--The fund shall be administered by the
16 department.
17 Section 4. Application for loan AND LOAN guarantee assistance. <--
18 (a) Form.--To apply for financial assistance, an applicant
19 shall submit to the department an application on a form that the
20 department provides.
21 (b) Required information.--The application shall include:
22 (1) A detailed description of the project.
23 (2) An itemization of known and estimated costs.
24 (3) The total amount of investment required to perform
25 the contract.
26 (4) The funds available to the applicant without loan
27 guarantee assistance from the department.
28 (5) The amount of loan guarantee assistance sought from
29 the department OR IN THE CASE OF A LOAN, THE AMOUNT TO BE <--
30 BORROWED.
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1 (6) Information that relates to the inability of the
2 applicant to obtain adequate financing on reasonable terms
3 through normal lending channels.
4 (7) Information that relates to the financial status of
5 the applicant, including, if applicable:
6 (i) A current audited balance sheet.
7 (ii) A profit and loss statement.
8 (iii) Credit references.
9 (IV) PROOF OF VIABLE ADMINISTRATIVE AND FINANCIAL <--
10 MANAGEMENT.
11 (8) Any other relevant information that the department
12 requests.
13 Section 5. Types of financial assistance.
14 Subject to the restrictions of this act, the department, on
15 application, may provide to the applicant the following types of
16 financial assistance:
17 (1) A guarantee of a loan made to the applicant.
18 (2) If the applicant is a corporation, a guarantee of an
19 equity investment in the applicant.
20 (3) DIRECT LOANS TO CHILD DAY-CARE FACILITIES FOR <--
21 IMPROVEMENTS FOR COMPLIANCE WITH STATE AND LOCAL HEALTH AND
22 SAFETY STANDARDS.
23 Section 6. Prerequisites to guarantee loan FOR LOANS AND LOAN <--
24 GUARANTEES.
25 The department may guarantee a loan made OR PROVIDE A LOAN to <--
26 an applicant only if:
27 (1) The applicant meets the qualifications required
28 under this act.
29 (2) The loan is to be used to expand or develop a child
30 day-care OR ADULT DAY-CARE facility project. <--
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1 Section 7. Considerations in guaranteeing loans.
2 In guaranteeing loans under this act, consideration shall be
3 given to:
4 (1) Geographic distribution.
5 (2) Community need.
6 (3) Community income, with priority given to those
7 communities with the lowest median family income.
8 Section 8. Terms and conditions.
9 (a) Authority of department.--The department may set the
10 terms and conditions for LOANS AND guarantees of loans. <--
11 (b) Maximum amount of guarantee.--The total aggregate amount
12 of the loan guarantee may not exceed 80% of the loan OR A FIXED <--
13 DOLLAR AMOUNT NOT TO EXCEED $50,000.
14 (c) Maximum amount of insurance.--The total aggregate amount
15 of insurance from the fund, with respect to the insured portions
16 of the loan, may not exceed at any time an amount equal to five <--
17 THREE times the balance AVAILABLE FOR LOAN GUARANTEES in the <--
18 fund.
19 (D) MAXIMUM AMOUNT OF LOAN.--LOANS FOR FACILITY IMPROVEMENTS <--
20 FOR COMPLIANCE WITH STATE AND LOCAL HEALTH AND SAFETY STANDARDS
21 SHALL NOT EXCEED $5,000.
22 SECTION 9. LOANS.
23 (A) GENERAL RULE.--THE DEPARTMENT MAY MAKE LOANS TO
24 QUALIFIED APPLICANTS IF:
25 (1) THE APPLICANT MEETS THE QUALIFICATIONS REQUIRED BY
26 THIS CHAPTER.
27 (2) THE APPLICANT MEETS ANY ADDITIONAL REQUIREMENTS
28 IMPOSED BY THE DEPARTMENT.
29 (3) THE LOAN WILL BE USED TO ASSIST APPLICANTS FOR
30 FACILITY IMPROVEMENTS FOR COMPLIANCE WITH STATE AND LOCAL
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1 HEALTH AND SAFETY STANDARDS AT CHILD DAY-CARE FACILITIES.
2 (B) APPLICATION.--TO APPLY FOR A LOAN, AN APPLICANT SHALL
3 SUBMIT TO THE DEPARTMENT AN APPLICATION ON THE FORM THAT THE
4 DEPARTMENT REQUIRES.
5 (C) TERMS AND CONDITIONS.--EXCEPT AS PROVIDED IN THIS ACT,
6 THE DEPARTMENT MAY SET THE TERMS AND CONDITIONS FOR LOANS.
7 (D) LOAN DOCUMENTS.--IF THE DEPARTMENT DECIDES TO LEND MONEY
8 TO AN APPLICANT, THE DEPARTMENT SHALL PREPARE LOAN DOCUMENTS.
9 THE LOAN DOCUMENTS SHALL INCLUDE THE FOLLOWING:
10 (1) THE RATE OF INTEREST ON THE LOAN.
11 (2) THE AMOUNT OF THE LOAN.
12 (3) A REQUIREMENT THAT BEFORE EACH DISBURSEMENT OF LOAN
13 PROCEEDS IS RELEASED TO THE APPLICANT THE APPLICANT AND THE
14 DEPARTMENT COSIGN THE REQUEST FOR THE FUNDS.
15 (4) PROVISIONS FOR REPAYMENT OF THE LOAN.
16 (5) ANY OTHER PROVISIONS THAT THE DEPARTMENT DETERMINES
17 ARE NECESSARY, INCLUDING THE TAKING OF LIENS AND SECURITY
18 INTERESTS IN REAL AND PERSONAL PROPERTY.
19 (E) FORECLOSURE.--MORTGAGES OR DEEDS OF TRUST HELD AS
20 SECURITY FOR LOANS MADE UNDER THIS SUBSECTION WHICH ARE IN
21 DEFAULT MAY BE FORECLOSED BY THE DEPARTMENT IN THE SAME MANNER
22 AS PROVIDED BY THE PENNSYLVANIA RULES OF CIVIL PROCEDURE.
23 (F) TERM.--THE TERM OF THE LOAN MAY NOT EXCEED FIVE YEARS.
24 (G) CHILD DAY-CARE FACILITY.--THE APPLICANT FOR A LOAN MUST
25 AGREE TO OPERATE THE CHILD DAY-CARE FACILITY FOR AT LEAST THE
26 TERM OF THE LOAN AND TO REPAY THE OUTSTANDING LOAN IN FULL UPON
27 THE LOSS OF LICENSE, TERMINATION OF LEASE, TRANSFER, SALE OR
28 REFINANCING OF THE CHILD DAY-CARE FACILITY, AS APPLICABLE,
29 BEFORE THE END OF THE TERM OF THE LOAN.
30 (H) MAXIMUM AMOUNT.--THE MAXIMUM AMOUNT OF A DIRECT LOAN
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1 SHALL BE $5,000.
2 Section 9 10. Receipts. <--
3 All receipts designated for the fund, including premiums for <--
4 guaranteeing loans and any interest accruing on investments of
5 fund moneys, shall be placed in the fund, INCLUDING: <--
6 (1) FEDERAL FUNDS ALLOCATED OR GRANTED TO THE FUND.
7 (2) PRIVATE MONEYS DONATED OR GRANTED TO THE FUND.
8 (3) MONEYS APPROPRIATED BY THE STATE TO THE FUND.
9 (4) PREMIUMS FOR GUARANTEEING LOANS, FEES, INTEREST
10 PAYMENTS AND INTEREST ACCRUING ON INVESTMENTS OF FUND MONEYS,
11 AND PRINCIPAL PAYMENTS ON LOANS.
12 (5) PROCEEDS FROM THE SALE, DISPOSITION, LEASE OR RENTAL
13 OF COLLATERAL RELATING TO LOANS.
14 Section 10 11. Expenses and disbursements. <--
15 The fund shall be used to pay all expenses and disbursements
16 authorized by the department for expanding, developing or
17 upgrading site improvements for compliance with State and local
18 health and safety standards at child day-care AND ADULT DAY-CARE <--
19 facilities in this Commonwealth, including:
20 (1) Guarantee payments required by loan defaults.
21 (2) Expenses for administrative, legal, actuarial and
22 other services.
23 SECTION 12. LIMITATIONS ON FUND. <--
24 USE OF MONEYS IN THE FUND FOR THE PURPOSE OF PROVIDING LOAN
25 GUARANTEES SHALL NOT EXCEED 50% OF THE TOTAL AMOUNT IN THE FUND.
26 THE REMAINING 50% SHALL BE AVAILABLE FOR DIRECT LOANS.
27 Section 11 13. Violations of guarantee agreement. <--
28 If an applicant violates any provisions of the loan guarantee
29 agreement or ceases to meet the requirements of this act on
30 reasonable notice to the applicant, the department may:
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1 (1) Withhold from the applicant further loan guarantees
2 until the applicant complies with the agreement or
3 requirements.
4 (2) Exercise any other remedy for which the loan
5 guarantee agreement provides.
6 Section 12 14. False statements or reports. <--
7 (a) Application.--A person may not knowingly make or cause
8 any false statement or report to be made in any application or
9 in any document furnished to the department.
10 (b) Influence of department action.--A person may not
11 knowingly make or cause any false statement or report to be made
12 for the purpose of influencing the action of the department on
13 an application for financial assistance or for the purpose of
14 influencing any action of the department affecting financial
15 assistance whether or not this assistance may have already been
16 extended.
17 (c) Penalty.--Any person or any aider and abettor who
18 violates any provision of this act commits a misdemeanor of the
19 first degree.
20 Section 13 15. Rules and regulations. <--
21 The department shall promulgate rules and regulations to
22 carry out the purposes of this act.
23 Section 14 16. Appropriation. <--
24 The General Assembly shall make an annual appropriation to <--
25 the Department of Commerce to carry out the provisions of this
26 act.
27 AN INITIAL SUM OF $500,000 IS HEREBY APPROPRIATED TO THE <--
28 CHILD DAY-CARE FACILITIES LOAN AND LOAN GUARANTEE FUND TO CARRY
29 OUT THE PROVISIONS OF THIS ACT FOR THE 1994-1995 FISCAL YEAR.
30 THIS APPROPRIATION SHALL NOT LAPSE. ADDITIONALLY, THE FOLLOWING
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1 AMOUNTS ARE HEREBY APPROPRIATED FOR THE FISCAL PERIODS
2 INDICATED:
3 AMOUNT OF FISCAL
4 APPROPRIATION PERIOD
5 $100,000 1995-1996
6 $100,000 1996-1997
7 $100,000 1997-1998
8 $100,000 1998-1999
9 $100,000 1999-2000
10 Section 15 17. Effective date. <--
11 This act shall take effect in 90 days.
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