(a) The State Allocation Board may use up to 5 percent of any appropriation for the purposes of this article to provide loans to private nonsectarian child care and development programs not under contract with the department for renovation and repair of existing program facilities, in accordance with this section.
(b) The Superintendent shall establish qualifications to determine the eligibility of child care agencies for loans pursuant to this section.
Terms Used In California Education Code 8498
- Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
- Child care and development programs: means those programs that offer a full range of services for children from infancy to 13 years of age, for any part of a day, by a public or private agency, in centers and family child care homes. See California Education Code 8208
- Contract: A legal written agreement that becomes binding when signed.
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
(c) The board, with any necessary assistance from the Superintendent, may do any of the following:
(1) Establish procedures and policies in connection with the administration of this section it deems necessary.
(2) Adopt rules and regulations for the administration of this section requiring procedure, forms, and information it deems necessary.
(d) A recipient of a loan pursuant to this section shall do all of the following:
(1) Document that the renovated facility shall comply with all laws and regulations applicable to child care facilities provided for pursuant to Chapter 3.4 (commencing with Section 1596.70) and Chapter 3.5 (commencing with Section 1596.90) of Division 2 of the Health and Safety Code.
(2) Demonstrate to the satisfaction of the board that it will have sufficient revenues to pay the principal and interest on the loan and to maintain the operation of the child care facility.
(e) A recipient of a loan pursuant to this section shall assure the board that the renovated facility shall be used for purposes of the child care and development program for the following periods:
(1) For loans equal to or less than thirty thousand dollars ($30,000), not less than three years from the beginning of the loan period.
(2) For loans exceeding thirty thousand dollars ($30,000), the fixed period of time shall increase one year for each additional ten thousand dollars ($10,000) or part thereof, to a maximum of fifty thousand dollars ($50,000).
(f) The board shall set the period of the loan for each recipient, up to a maximum of 10 years, based upon the amount of the loan, the recipient’s ability to repay the loan, and the length of time the recipient has committed to use the renovated facility for purposes of the child care and development program.
(g) Interest on the loan principal shall be charged at a rate equal to the average of the interest rate applied to the last three bond sales pursuant to Chapter 21.6 (commencing with Section 17695) of Part 10.
(h) In the event that a recipient ceases to use the renovated facility for purposes of the child care and development program prior to the expiration of the period specified pursuant to subdivision (e), the board shall collect the entire outstanding balance of the loan, plus interest, notwithstanding the loan period originally set pursuant to subdivision (f).
(Amended by Stats. 2006, Ch. 538, Sec. 90. Effective January 1, 2007.)