Sec. 17b-749h. Child care facilities direct revolving loan program. Regulations.
Sec. 17b-749h. Child care facilities direct revolving loan program. Regulations. (a) There is established a program to be known as the "child care facilities direct
revolving loan program". 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, fees, interest payments and principal payments on direct loans and
proceeds from the sale, disposition, lease or rental of collateral relating to direct loans.
Any balance remaining in the program at the end of any fiscal year shall be carried
forward in the program for the next succeeding fiscal year. The program shall be used
to make loans pursuant to subsection (b) of this section, to make loan guarantees and
to pay reasonable and necessary expenses incurred in administering loans and loan
guarantees 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 loan program, provided no loan or loan guarantee
shall be made from the fund without the authorization of the commissioner as provided
in subsection (b) of this section.
(b) The state, acting by and in the discretion of the Commissioner of Social Services,
may enter into a contract to provide financial assistance in the form of interest-free loans,
deferred loans or guaranteed loans to child care providers or to nonprofit developers of
a child care facility operating under a legally enforceable agreement with a child care
provider, for costs or expenses incurred and directly connected with the expansion,
improvement or development of child care facilities. Such costs and expenses may
include: (1) Advances of loan proceeds for direct loans; (2) expenses incurred in project
planning and design, including architectural expenses; (3) legal and financial expenses;
(4) expenses incurred in obtaining required permits and approvals; (5) options to purchase land; (6) expenses incurred in obtaining required insurance; (7) expenses incurred
in meeting state and local child care standards; (8) minor renovations and upgrading
child care facilities to meet such standards and loans for the purpose of obtaining licensure under section 19a-77; (9) purchase and installation of equipment, machinery and
furniture, including equipment needed to accommodate children with special needs;
and (10) other preliminary expenses authorized by the commissioner. Loan proceeds
shall not be used for the refinancing of existing loans, working capital, supplies or
inventory.
(c) The amount of a direct loan under this section may be up to eighty per cent of
the total amount of investment but shall not exceed twenty-five thousand dollars for
such facility as determined by the commissioner except that if an applicant for a loan
under this section has an existing loan that is guaranteed by the child care facilities loan
guarantee program, established under section 17b-749g, the direct loan provided under
this section shall not exceed twenty per cent of the investment. The amount of any
guarantee and a direct loan under this section shall not exceed eighty per cent.
(d) Each provider applying for a loan under this section shall submit an application,
on a form provided by the commissioner that shall include, but is not limited to, the
following information: (1) A detailed description of the proposed or existing child care
facility; (2) an itemization of known and estimated costs; (3) the total amount of investment required to expand or develop the child care facility; (4) the funds available to the
applicant without financial assistance from the department; (5) the amount of financial
assistance sought from the department; (6) information relating to the financial status
of the applicant, including, if available, a current balance sheet, a profit and loss statement and credit references; and (7) evidence that the loan applicant shall, as of the loan
closing, own, have an option to purchase or have a lease for the term of the loan. Security
for the loan may include an assignment of the lease or other subordination of any mortgage and the borrower shall be in default if the loan is not used for the intended purpose.
(e) Payments of principal and interest on such loans shall be paid to the State Treasurer for deposit in the child care facilities direct revolving loan program established in
subsection (a) of this section.
(f) The Commissioner of Social Services may adopt regulations, in accordance with
chapter 54, to carry out the provisions of this section. Such regulations may clarify loan
procedures, repayment terms, security requirements, default and remedy provisions,
and such other terms and conditions as said commissioner shall deem appropriate.
(P.A. 97-259, S. 16, 41; P.A. 99-230, S. 8, 10.)
History: P.A. 97-259 effective July 1, 1997; P.A. 99-230 amended Subsec. (c) to increase the cap from $10,000 to
$25,000, effective July 1, 1999.