January 27, 2005, Introduced by Senator THOMAS and referred to the Committee on Families and Human Services.
A bill to create a child loan guarantee commission and its
powers and duties; to create a child care loan guarantee fund; to
prescribe the powers and duties for certain state agencies and
officers; to prescribe limits on the use of the fund; and to make
an appropriation.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the "child
care loan guarantee act".
Sec. 2. The purpose of this act is to increase the quality and
availability of child care in low-income areas of this state.
Sec. 3. As used in this act:
(a) "Child care and development block grant" means the block
grant established by the child care and development grant act of
1990, subchapter C of chapter 8 of subtitle A of title VI of the
omnibus reconciliation act of 1981, Public Law 97-35, 42 USC 9858
to 9858q.
(b) "Child care provider" or "provider" means a person who
provides child care if both of the following apply:
(i) The care is for less than 18 hours in a 24-hour period.
(ii) The care is provided in a place other than the child's
residence unless both of the following apply:
(A) The provider is the child's primary caregiver.
(B) The provider provides care for other children in the
residence who are not related to the provider.
(c) "Commission" means the child care loan guarantee
commission created in section 4.
(d) "Department" means the department of treasury.
(e) "Fund" means the child care loan guarantee fund created in
section 5.
(f) "Resource and referral agency" means an organization that
does all of the following:
(i) Informs child care providers about applicable federal,
state, and local regulations.
(ii) Explains existing child care programs to parents.
(iii) Refers parents to existing child care programs.
(iv) Suggests criteria, including basic health and safety
guidelines, for parents to use when selecting a child care
provider.
(v) Informs parents how to file complaints about a child care
provider and how to determine the status of an ongoing or
previously substantiated complaint.
Sec. 4. (1) The child care loan guarantee commission is
created within the department of treasury.
(2) The commission shall consist of the following members,
appointed by the governor, and subject to the advice and consent of
the senate:
(a) Two members who have experience in investment finance and
experience in assembling capital, starting new businesses, and
expanding small businesses.
(b) One member who represents a philanthropic organization
with experience in evaluating funding proposals.
(c) One employee of a state agency that has responsibility for
child care or other social programs.
(d) One state employee who has responsibility for banking
regulation.
(e) One member who is an expert in early childhood
development.
(f) One home-based child care provider.
(g) One member who represents a center-based child care
provider.
(h) One member who represents a resource and referral agency.
(i) One parent whose child is under 12 years of age at the
beginning of that member's term.
(3) A member appointed under this section shall not serve more
than 3 terms. The governor shall appoint the members of the child
care loan guarantee commission within 30 days after the effective
date of this act.
(4) A commission member shall serve for a term of 2 years or
until a successor is appointed, whichever is later, except that of
the members first appointed 4 shall serve for 1 year, 3 shall serve
for 2 years, and 3 shall serve for 3 years. If a vacancy occurs on
the commission, the governor shall make an appointment for the
unexpired term in the same manner as the original appointment. The
governor may remove a commission member for incompetency,
dereliction of duty, malfeasance, misfeasance, or nonfeasance in
office, or any other good cause.
(5) The first meeting of the commission shall be called by the
member appointed under subsection (2)(d). At the first meeting, the
commission shall elect from among its members a chairperson and
other officers as it considers necessary or appropriate. After the
first meeting, the commission shall meet at least quarterly or more
frequently at the call of the chairperson or if requested by 5 or
more members. A majority of the members of the commission
constitute a quorum for the transaction of business at a meeting of
the commission. A majority of the members present and serving are
required for official action of the commission.
(6) The business that the commission may perform shall be
conducted at a public meeting of the commission held in compliance
with the open meetings act, 1976 PA 267, MCL 15.261 to 15.275. A
writing prepared, owned, used, in the possession of, or retained by
the commission in the performance of an official function is
subject to the freedom of information act, 1976 PA 442, MCL 15.231
to 15.246.
(7) A commission member shall serve without compensation
except that a public commission member may be reimbursed for his or
her actual and necessary expenses incurred in performing his or her
official duties as a commission member.
Sec. 5. (1) The child care loan guarantee fund is created
within the state treasury.
(2) The state treasurer may receive money or other assets from
any source for deposit into the fund. The state treasurer shall
direct the investment of the fund. The state treasurer shall credit
interest and earnings to the fund from fund investments. Money in
the fund at the close of the fiscal year shall remain in the fund
and shall not lapse to the general fund.
(3) Upon appropriation, the department shall expend money from
the fund only for 1 or more of the following purposes:
(a) Construction, purchase, lease, or improvement of a
building or other facility.
(b) Purchase or improvement of land.
(c) Purchase or loan of equipment, including a vehicle.
(d) Staff training.
(e) Payment of initial operating expenses.
(f) Payment of salaries.
(g) Marketing.
Sec. 6. (1) The commission shall promulgate rules concerning
the application and approval of loan guarantees. The rules shall
give priority to loan guarantees. As directed by the rules, loan
guarantees shall be awarded so that each of the following is
achieved:
(a) The loan guarantees are awarded to providers who serve or
intend to serve families with below median income.
(b) The loan guarantees are awarded in communities that
demonstrate the greatest need for child care services.
(c) The loan guarantees are awarded in geographic distribution
throughout the state.
(2) The commission shall not approve a loan guarantee greater
than $30,000.00. The commission shall not guarantee an amount
greater than 80% of a loan. The commission shall not guarantee an
aggregate amount greater than 5 times the amount in the fund.
(3) In selecting a child care provider for a loan guarantee,
the board shall use the following criteria:
(a) The staff and programming quality of the applicant.
(b) Ratio of children to staff.
(c) Quality of the facilities.
(d) Degree of coordination with head start or other programs.
(e) Quality of administrative and financial management.
(4) An applicant for a child care loan guarantee shall provide
all of the following:
(a) A detailed description of the project.
(b) A disclosure of the money available to the applicant
without assistance from the commission.
(c) Information that relates to the inability of the applicant
to obtain adequate financing on reasonable terms through normal
lending channels, such as a letter from a lender certifying that it
would not approve credit without the loan guarantee.
(d) Credit references for the applicant if available.
(e) A 2-year projected budget.
(f) A comprehensive, 2-year business plan that includes the
applicant's plans in all of the following areas:
(i) Debt reduction.
(ii) Marketing.
(iii) Staff training.
(iv) Facility improvement.
(v) Program improvement.
(vi) Other information that the commission requests.
Sec. 7. An applicant shall provide collateral to the
commission in an amount equal to 10% of the loan guarantee amount.
The commission may seize collateral if the applicant defaults. The
collateral shall be used to offset the cost to the fund.
Sec. 8. (1) There is appropriated an amount of $1,000,000.00
for the fiscal year beginning October 1, 2005. The money shall be
deposited into the fund.
(2) The legislature shall appropriate sufficient money to
carry out the purpose of this act.
Enacting section 1. This act takes effect October 1, 2005.