What This Bill Does
This bill allows nonprofit child care providers to get loans from the Small Business Administration (a federal agency that helps small businesses). The bill makes certain nonprofit child care organizations eligible for the same loan programs that other small businesses use.
Who It Affects
Nonprofit child care providers (organizations that provide child care and are not run to make a profit), the Small Business Administration, Congress, and banks or lenders that work with the Small Business Administration.
Key Provisions
• Nonprofit child care providers that meet specific requirements are now treated as small business concerns eligible for two types of loans: loans under section 7(a) of the Small Business Act and financing under title V of the Small Business Investment Act of 1958 (Sec. 2(a)).
• For loans or financing over $500,000, the nonprofit must get a guarantee of timely payment from another person or entity. For loans or financing of $500,000 or less, no guarantee is required (Sec. 2(a)).
• The Small Business Administration cannot deny a loan to a covered nonprofit child care provider just because the money will be used for activities protected by the First Amendment (the constitutional right to practice religion) (Sec. 2(a)).
• The Small Business Administration must report to Congress annually on the number and amount of loans made to nonprofit child care providers under these programs (Sec. 2(b)).
What Changes
Nonprofit child care organizations that currently cannot access Small Business Administration loans will now be able to apply for them, provided they meet the bill's requirements.
Important Definitions
A "covered nonprofit child care provider" is an organization that meets all of these conditions: follows state licensing rules for child care, has nonprofit tax-exempt status (organized under Internal Revenue Code section 501(c)(3)), mainly provides child care for children from birth through school age, meets size standards for its industry, requires all employees and regular volunteers to pass criminal background checks as required by the Child Care and Development Block Grant Act, and promises not to discriminate based on race, color, religion, sex, sexual orientation, marital status, age, disability or national origin (Sec. 2(a)).
I
118TH CONGRESS
1ST SESSION H. R. 2602
To allow nonprofit child care providers to participate in certain loan programs
of the Small Business Administration, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 13, 2023
Mrs. LEE of Nevada (for herself and Mr. STAUBER) introduced the following
bill; which was referred to the Committee on Small Business
A BILL
To allow nonprofit child care providers to participate in
certain loan programs of the Small Business Administra-
tion, and for other purposes.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Small Business Child
4
Care Investment Act’’.
5
SEC. 2. SMALL BUSINESS LOANS FOR NONPROFIT CHILD
6
CARE PROVIDERS.
7
(a) IN GENERAL.—Section 3(a) of the Small Busi-
8
ness Act (15 U.S.C. 632(a)) is amended by adding at the
9
end the following:
10
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•HR 2602 IH
‘‘(10) NONPROFIT CHILD CARE PROVIDERS.—
1
‘‘(A) DEFINITION.—In this paragraph, the
2
term ‘covered nonprofit child care provider’
3
means an organization—
4
‘‘(i) that—
5
‘‘(I) is in compliance with licens-
6
ing requirements for child care pro-
7
viders of the State in which the orga-
8
nization is located;
9
‘‘(II) is described in section
10
501(c)(3) of the Internal Revenue
11
Code of 1986 and exempt from tax
12
under section 501(a) of such Code;
13
‘‘(III) is primarily engaged in
14
providing child care for children from
15
birth to compulsory school age; and
16
‘‘(IV) is in compliance with the
17
size standards established under this
18
subsection for business concerns in
19
the applicable industry;
20
‘‘(ii) for which each employee and reg-
21
ular volunteer complies with the criminal
22
background check requirements under sec-
23
tion 658H(b) of the Child Care and Devel-
24
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•HR 2602 IH
opment Block Grant Act of 1990 (42
1
U.S.C. 9858f(b));
2
‘‘(iii) that may—
3
‘‘(I) provide care for school-age
4
children outside of school hours or
5
outside of the school year; or
6
‘‘(II) offer preschool or pre-
7
kindergarten educational programs;
8
and
9
‘‘(iv) subject to any exemption under
10
Federal law applicable to the organization,
11
that certifies to the Administrator that the
12
organization will not discriminate in any
13
business practice, including providing serv-
14
ices to the public, on the basis of race,
15
color, religion, sex, sexual orientation, mar-
16
ital status, age, disability, or national ori-
17
gin.
18
‘‘(B) ELIGIBILITY
FOR
CERTAIN
LOAN
19
PROGRAMS.—
20
‘‘(i) IN
GENERAL.—Notwithstanding
21
any other provision of this subsection, a
22
covered nonprofit child care provider shall
23
be deemed to be a small business concern
24
for purposes of loans under section 7(a) of
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•HR 2602 IH
this Act or financing under title V of the
1
Small Business Investment Act of 1958
2
(15 U.S.C. 695 et seq.).
3
‘‘(ii) LOAN
GUARANTEE.—A covered
4
nonprofit child care center provider—
5
‘‘(I) shall obtain a guarantee of
6
timely payment of the loan or financ-
7
ing from another person or entity to
8
be eligible for a loan or financing of
9
more than $500,000 under the au-
10
thority under clause (i); and
11
‘‘(II) shall not be required to ob-
12
tain a guarantee of timely payment of
13
the loan or financing to be eligible for
14
a loan or financing that is not more
15
than $500,000 under the authority
16
under clause (i).
17
‘‘(C) LIMITATION ON BASIS FOR INELIGI-
18
BILITY.—The Administrator may not determine
19
that a covered nonprofit child care center pro-
20
vider is not eligible for a loan or financing de-
21
scribed in subparagraph (B)(i) on the basis that
22
the proceeds of the loan or financing will be
23
used for a religious activity protected under the
24
First Amendment to the Constitution of the
25
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•HR 2602 IH
United States, as interpreted by the courts of
1
the United States.’’.
2
(b) REPORTING.—
3
(1) DEFINITION.—In this subsection, the term
4
‘‘covered nonprofit child care provider’’ has the
5
meaning given the term in paragraph (10) of section
6
3(a) of the Small Business Act (15 U.S.C. 632(a)),
7
as added by subsection (a).
8
(2) REQUIREMENT.—Not later than 1 year
9
after the date of enactment of this Act, and annually
10
thereafter, the Administrator of the Small Business
11
Administration shall submit to Congress a report
12
that contains—
13
(A) for the year covered by the report—
14
(i) the number of loans made under
15
section 7(a) of the Small Business Act (15
16
U.S.C.
636(a))
and
the
number
of
17
financings provided under title V of the
18
Small Business Investment Act of 1958
19
(15 U.S.C. 695 et seq.) to covered non-
20
profit child care providers; and
21
(ii) the amount of such loans made
22
and the amount of such financings pro-
23
vided to covered nonprofit child care pro-
24
viders; and
25
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•HR 2602 IH
(B) any other information determined rel-
1
evant by the Administrator.
2
Æ
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