A4144

An Act concerning child care, supplementing Chapter 1B of Title 34 of the Revised Statutes, and making an appropriation.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. This act shall be known and may be cited as the “Child Care Loan Fund Act.”

2. As used in this act:

“Authority” means the New Jersey Economic Development Authority in the Department of the Treasury.

“Grow NJ Kids” means the State’s quality rating and improvement system for early childhood education.

“Licensed child care center” means a facility approved by the Office of Licensing in the Department of Children and Families to provide care for six or more children under the age of 13 for fewer than 24 hours of care per day.

“Loan recipient” means the owner of an existing licensed child care center or registered family day care home, or an individual or entity who intends to establish a new licensed child care center or registered family day care home, and who is provided a Child Care Loan Program loan pursuant to section 3 of this act.

“Registered family day care home” means a child care provider that cares for no more than five children at any one time in the provider’s home and has received an initial, temporary, or renewal Certificate of Registration from a sponsoring Child Care Resource and Referral agency and the Office of Licensing in the Department of Children and Families.

3. a. The authority, in collaboration with the Commissioner of Children and Families and the Commissioner of Human Services, shall establish the Child Care Loan Program to provide no-cost, zero percent interest financing loans to the owner of a licensed child care center or a registered family day care home, or an individual or entity that intends to establish a new child care center or family day care home, for qualifying capital expenses. The goal of the loan program shall be to increase the overall number of available child care slots in licensed child care centers and registered family day care homes Statewide.

b. Qualifying capital expenses under the loan program shall be limited to:

(1) the renovation or expansion of an existing licensed child care center or registered family day care home in order to increase the overall capacity of the child care center or the family day care home; or

(2) the construction of a new child care center or family day care home.

Under no circumstances shall loan funds be used for the operating expenses of a licensed child care center or a registered family day care home.

c. The owner of an existing licensed child care center or registered family day care home, or an individual or entity intending to establish a new child care center or family day care home, shall submit an application to the authority on a form and in a manner prescribed by the authority. The applicant shall, at a minimum, submit the following as part of an application:

(1) child care provider information, including licensing or registration information, if applicable;

(2) the requested loan amount;

(3) a detailed project description, including contractor cost estimates, any expected outside funding sources, and the anticipated construction timeline;

(4) information on how the project will expand community access to child care services, and the number of new child care slots that will be directly attributable to the project; and

(5) any additional information that may be required by the authority, the Department of Children and Families, and the Department of Human Services.

d. Upon receipt of an application, the Chief Executive of the authority, in collaboration with the Commissioner of Children and Families and the Commissioner of Human Services, shall review the application and, subject to evaluation and the availability of resources in the Child Care Loan Fund, established pursuant to section 4 of this act, disburse a loan to each approved applicant within 30 days of the receipt of the loan application. To the maximum extent feasible, loans shall be distributed equitably to successful applicants in the northern, central, and southern regions of the State.

e. In awarding Child Care Loan Program loans, the authority shall prioritize applicants who participate in, or agree to apply to participate in, Grow NJ Kids.

f. (1) Except as provided in paragraph (2) of this subsection, a recipient of a Child Care Loan Program loan shall commit to repay the loan within five years of the date of disbursement.

(2) The authority shall establish a financial hardship exemption to provide a loan recipient with additional time in which to repay the loan.

(3) Prepayment of a Child Care Loan Program loan may be made by a loan recipient at any time without penalty.

g. (1) A Child Care Loan Program loan recipient shall agree to secure the loan with collateral, which collateral may include, but shall not be limited to:

(a) liens on business assets;

(b) pledges of accounts; and

(2) Under no circumstances shall a loan recipient be required to provide an equity contribution in excess of five percent of the loan amount.

4. a. The Child Care Loan Fund is established as a nonlapsing, revolving fund, which shall be administered by the New Jersey Economic Development Authority. The fund shall be credited with monies appropriated from the General Fund pursuant to section 7 of this act, repayments of loan principal, and any grants awarded by the federal government, other State departments, or private foundations for the benefit of the fund.

b. The State Treasurer shall be the custodian of the fund, and all disbursements from the fund shall be made by the State Treasurer upon vouchers signed by the Chief Executive of the authority. The monies in the fund shall be invested and reinvested by the Director of the Division of Investment in the Department of the Treasury as are other trust funds in the custody of the State Treasurer in the manner provided by law. Interest received on the monies in the fund shall be credited to the fund.

5. a. The authority, in coordination with the Department of Children and Families and the Department of Human Services, shall determine the form and scope of technical assistance services that shall be made available to recipients of the loans disbursed pursuant to subsection a. of section 3 of this act, which technical assistance shall include, but shall not be limited to:

(1) assistance with constructing new facilities that will satisfy State and local requirements for use as a licensed child care center or a registered family day care home;

(2) as necessary, support in successfully securing and maintaining licensure as child care center according to the requirements established in P.L.1983, c.492 (C.30:5B-1 et seq.) or registration as a family day care home according to the requirements in P.L.1987, c.27 (C.30:5B-16 et seq.); and

(3) as necessary, and in coordination with the Department of Labor and Workforce Development, guidance and support with respect to attracting, hiring, and retaining a sufficient number of teachers and staff to meet State-mandated staff-to-child ratios and class sizes for licensed child care centers.

b. The authority shall assist loan recipients with identifying and securing approval for any local, State, federal, or private grants, loans, or business development programs available to support individuals or entities with expenses, in excess of any loan amount disbursed pursuant to subsection a. of section 3 of this act, to construct a new licensed child care center or registered family day care home, or to renovate or expand an existing licensed child care center or registered family day care home.

6. The Chief Executive of the New Jersey Economic Development Authority, the State Treasurer, the Commissioner of Children and Families, and the Commissioner of Human Services shall, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.). adopt rules and regulations as necessary to implement this act.

7. There is appropriated from the General Fund to the Child Care Loan Fund, established pursuant to section 4 of this act, $10 million to implement the provisions of the act.

8. The provisions of this act shall take effect on the first day of the third month next following the date of enactment.

STATEMENT

The “Child Care Loan Fund Act” establishes the Child Care Loan Program to provide no-cost, zero percent interest financing loans to current and prospective owners of licensed child care centers (centers) or registered family day care homes (homes) for capital expenses. The goal of the loan program is to increase the overall number of child care slots available Statewide. The New Jersey Economic Development Authority (EDA) will establish the loan program, in collaboration with the Department of Children and Families (DCF) and the Department of Human Services (DHS).

Loan funds may be used to: (1) renovate or expand an existing center or home, or (2) construct a new center or home. The bill prohibits the use of loan funds for the operating expenses of a licensed center or a registered home.

The EDA, in collaboration with the DCF and the DHS, will review loan applications and, subject to the availability of funding in the Child Care Loan Fund, disburse loans within 30 days.

Loan recipients will repay the loan in full within five years of disbursement and will secure the loan with collateral, including liens on business assets, pledges of accounts, and personal guarantees. Loan recipients will not be required to contribute greater than a five percent equity stake to secure a loan.

The bill establishes the Child Care Loan Fund in the Department of the Treasury as the repository for General Fund appropriations to the fund, repayments of loan principal, and any federal, State, or private grants for the benefit of the fund. Interest received on the monies in the fund will be credited to the fund.

The EDA, the DCF, and the DHS will provide technical assistance to loan recipients, including:

(1) assistance with constructing facilities that meet State and local requirements for use as centers or homes;

(2) support to secure and maintain licensure; and

(3) as needed, and in coordination with the Department of Labor and Workforce Development, support to attract, hire, and retain a sufficient number of teachers and staff to meet State requirements.

The EDA will help loan recipients secure any local, State, federal, or private grants, loans, or business development programs available to support individuals or entities with expenses, beyond the Child Care Loan Program loans received, to construct a new center or home or to renovate or expand an existing center or home.

The bill appropriates $10 million from the General Fund to the Child Care Loan Fund to implement the bill’s provisions. The bill’s provisions will take effect on the first day of the third month following the enactment date.