Sec. 17b-749g. Child care facilities loan guarantee program. Regulations.
Sec. 17b-749g. Child care facilities loan guarantee program. Regulations. (a)
There is established a child care facilities loan guarantee program for the purpose of
guaranteeing loans for the expansion or development of child care and child development centers in the state. The program shall contain any moneys required by law to be
deposited in the program, including, but not limited to, any moneys appropriated by the
state, premiums and fees for guaranteeing loans, and proceeds from the sale, disposition,
lease or rental of collateral relating to loan guarantees. Any balance remaining in the
program at the end of any fiscal year shall be carried forward in the program for the
fiscal year next succeeding. The program shall be used to guarantee loans pursuant to
subsection (b) of this section and to pay reasonable and necessary expenses incurred
for administration under this section. The Commissioner of Social Services may enter
into a contract with a quasi-public agency, banking institution or nonprofit corporation
to provide for the administration of the program, provided no loan guarantee shall be
made from the program without the authorization of the commissioner as provided in
subsection (b) of this section. The total aggregate amount of guarantees from the program, with respect to the insured portions of the loan, may not exceed at any one time
an amount equal to three times the balance in the guarantee program.
(b) The state, acting by and in the discretion of the Commissioner of Social Services,
may guarantee the repayment of loans, including, but not limited to, principal and interest, to a lending institution that has provided funding for the construction, reconstruction,
rehabilitation or improvement of child care and child development facilities. The total
aggregate of any loan guarantee under this section shall be not less than twenty per cent
and shall not exceed fifty per cent of the principal amount of the obligation, as determined
by approved underwriting standards approved by the commissioner, and upon such
terms and conditions as the commissioner may prescribe. The term of any loan guarantee
shall be determined by the useful life of the improvement but in no event shall exceed
thirty years. The commissioner shall arrange by contract with each lending institution
or the borrower to safeguard the interests of the program in the event of a default by the
borrower, including, at the discretion of the commissioner, provision for notice to the
program of default by the borrower, for foreclosure or other realization upon any security
for the loan, for the time and conditions for payment to the lending institution by the
program of the amount of any loss to the lending institution guaranteed by the program
and for the disposition of the proceeds realized from any security for the loan guaranteed.
When it appears desirable for a temporary period upon default or threatened default by
the borrower, the commissioner may authorize payments of installments of principal or
interest, or both, from the program to the lending institution, and of taxes and insurance,
which payments shall be repaid under such conditions as the program may prescribe
and the program may also agree to revise terms of financing when such appears pertinent.
Upon request of the lending institution, the commissioner may at any time, under such
equitable terms and conditions as it may prescribe, consent to the release of the borrower
from his liability under the loan or consent to the release of parts of any secured property
from the lien of the lending institution.
(c) Priority for loan guarantees shall be given to financing child care centers and
child development centers that (1) have obtained accreditation from the National Association for the Education of Young Children or have an application pending for such
accreditation, and (2) are included in a local school readiness plan, and (3) shall promote
the colocation of programs endorsed by the Commissioners of Education and Social
Services pursuant to section 4b-31. School readiness programs, licensed child care providers or nonprofit developers of a child care center operating under a legally enforceable
agreement with child care providers are eligible for such guaranteed loans.
(d) The Commissioner of Social Services may adopt regulations, in accordance with
the provisions of chapter 54, to establish procedures and qualifications for application for
guarantees under this section.
(P.A. 97-259, S. 14, 41.)
History: P.A. 97-259 effective July 1, 1997.