8275. (a) The Superintendent may reimburse approvable startup costs
of child development agencies or facilities in an amount not to
exceed 15 percent of the expansion or increase of each agency's total
contract amount. Under no circumstances shall reimbursement for
startup costs result in an increase in the agency's total contract
amount. These funds shall be available for all of the following:
(1) The employment and orientation of necessary staff.
(2) The setting up of the program and facility.
(3) The finalization of rental agreements and the making of
necessary deposits.
(4) The purchase of a reasonable inventory of materials and
supplies.
(5) The purchase of an initial premium for insurance.
(b) Agencies shall submit claims for startup costs with their
first quarterly reports.
(c) The Legislature recognizes that allowances for startup costs
are necessary for the establishment and stability of new child
development programs. Programs initially funded in the 1978-79 fiscal
year and 1979-80 fiscal year are included in this section.
8275.5. The State Department of Education shall promote full
utilization of child care and development funds and match available
unused funds with identified service needs. Notwithstanding the
requirements of Part 2 (commencing with Section 10100) of Division 2
of the Public Contract Code, the department shall arrange interagency
adjustments between different contractors with the same type of
contract when both agencies mutually agree to a temporary transfer of
funds for the balance of the fiscal year.
8276. The Superintendent of Public Instruction shall develop a plan
and procedures for the allocation of expansion funding balances
resulting from the prorata allocation of expansion for the partial
year operations of new agencies.
Such a plan shall provide for the distribution of such funds among
provider agencies whose enrollments include children with special
needs and shall limit provider agencies' use of these funds to the
purchase of Department of Education approved equipment or materials
or one-time-only services, or any of them, that will directly benefit
the children with special needs.
8276.5. The Legislature recognizes the shortage of child care and
development facilities which meet state and local health and safety
standards, and the lack of other sources of funding for renovations
and repairs necessary to upgrade facilities for licensing in order to
accommodate major child care expansion. It is, therefore, the intent
of the Legislature that funds be appropriated for the purpose of
providing small grants, as provided in Section 8277.1, to family day
care homes, and revolving loans with no interest, as provided in
Section 8277.2, to all other types of child care and development
facilities, in order to provide sufficient child care and development
facilities meeting licensing standards to accommodate the level of
child care expansion provided in this chapter.
It is further the intent of the Legislature that funds be
appropriated for the state purchase of relocatable child care and
development facilities as provided in Section 8277.7, for lease to
qualifying contracting agencies in geographic areas with no available
child care and development facilities.
8276.7. Unless specifically exempted by the Legislature, the
administrative cost for all state-funded child care and development
programs and all federal programs administered by the state shall not
exceed 15 percent of the funds provided for those programs.
Eighty-five percent of these funds shall be used to provide direct
services in accordance with rules and regulations, or contractual
funding terms and conditions prescribed by the Superintendent of
Public Instruction.
8277. The Superintendent of Public Instruction shall establish
regulations for the allocation of capital outlay funds provided
pursuant to Section 8277.1 to Section 8277.4, inclusive, to benefit
children most needing child care and development programs. The first
priority for all capital outlay shall be given to facilities located
in geographic areas with no other available enrollment slots in
existing subsidized and nonsubsidized child care and development
facilities. All such capital outlay funding shall be used solely for
purposes of renovation and repair of existing buildings.
The Superintendent of Public Instruction shall establish
qualifications for determining the eligibility of contracting
agencies and day care homes to apply for capital outlay funds.
8277.1. The Superintendent of Public Instruction may allocate to
family day care homes based on need, an amount from the appropriation
in Section 23 of the chapter of the Statutes of 1980 by which this
section was enacted, not to exceed one thousand dollars ($1,000) per
home, for minor capital outlay purchases for the repair and
renovation of homes for the purpose of insuring compliance with state
and local health and safety standards.
It is the intent of the Legislature that capital outlay moneys be
accessible to family day care homes through the auspices of the
contract agency or a family day care association, which may include
resource and referral agencies.
8277.2. The Superintendent of Public Instruction shall establish a
revolving loan fund to provide loans to child care and development
contracting agencies for capital outlay not to exceed 2 percent or
two thousand dollars ($2,000), whichever is greater, of the agency's
contract amount. These loans shall be available with no interest and
shall be used to renovate and repair child care facilities to meet
state and local health and safety standards.
8277.3. Repayments on loans made pursuant to Section 8277.2 shall
commence within one year after allocation of the loan to the
contracting agency. In lieu of payments by the contracting agency,
the Superintendent of Public Instruction shall annually reduce the
agency's contract amount for child care services by at least the
level of normal depreciation allowance on the renovation or repair,
calculated by the straight line method of depreciation.
The entire balance of a loan made pursuant to this section shall
be payable to the Superintendent of Public Instruction immediately if
the contracting agency ceases operation of services to children
subsidized pursuant to this chapter, or if the Superintendent of
Public Instruction fails to renew the agency's contract, or if 10
years have elapsed from the date of the allocation.
The Superintendent of Public Instruction shall deposit all revenue
derived from loan payments made by contracting agencies, or
reductions made by the Superintendent of Public Instruction in
agencies' contracts in lieu of payments, into the revolving loan fund
for allocation to other contracting agencies for capital outlay
projects pursuant to this section.
8277.4. The state shall hold a security interest in all renovations
and repairs funded pursuant to Section 8277.2.
8277.5. (a) For purposes of this section "department" means the
Department of Housing and Community Development.
(b) Subject to appropriation in the annual Budget Act, the Child
Care and Development Facilities Loan Guaranty Fund and the Child Care
and Development Facilities Direct Loan Fund are hereby established
in the State Treasury. The Superintendent of Public Instruction may
transfer state funds appropriated for child care facilities
enhancement and the proceeds derived from any future sales of
tax-exempt child care and development facilities bonds into these
funds.
(c) Notwithstanding Section 13340 of the Government Code, all
moneys in the Child Care and Development Facilities Loan Guaranty
Fund and the Child Care and Development Facilities Direct Loan Fund,
including any interest on loans made from the fund, or loan
repayments to the fund, are hereby continuously appropriated to the
department for carrying out the purposes of this section and Section
8277.6, respectively. Any loan repayment or interest resulting from
investment or deposit of moneys in these funds shall be deposited in
the applicable fund, notwithstanding Section 16305.7 of the
Government Code. Moneys in the funds shall not be subject to transfer
to any other fund pursuant to Part 2 (commencing with Section 16300)
of Division 4 of Title 2 of the Government Code, except the Surplus
Money Investment Fund.
(d) (1) Moneys deposited in the Child Care and Development
Facilities Loan Guaranty Fund shall be used for the purpose of
guaranteeing private sector loans to sole proprietorships,
partnerships, proprietary and nonprofit corporations, and local
public agencies for the purchase, development, construction,
expansion, or improvement of licensed child care and development
facilities, and for the purpose of administering the guarantees of
these loans. The loan guarantees shall be made by the department or
by a public or private entity approved by the department, in
accordance with the priorities established by the department, as
described in Section 8277.6. The full faith and credit of the State
of California is not pledged to the Child Care and Development
Facilities Loan Guaranty Fund and the state is not liable for loan
defaults that exceed the amount of funds deposited with the Child
Care and Development Facilities Loan Guaranty Fund.
(2) A loan guarantee made pursuant to this section may not exceed
80 percent of the principal and interest amount of a private sector
loan guaranteed by the fund and shall be used only to guarantee a
private sector loan for the purchase, development, construction,
expansion, or improvement of facilities described in Section 8277.6
and for related equipment and fixtures, but shall not be used
primarily to refinance an existing loan or for working capital,
supplies, or inventory. A loan guarantee for improvements shall be
limited to those improvements necessary, as determined by the
department, for any of the following purposes:
(A) To obtain, maintain, renew, expand, or revise a child care
license.
(B) To make necessary health and safety improvements.
(C) To make seismic improvements.
(D) To provide access for disabled children.
(E) To expand upon or preserve existing child care operations.
(3) The aggregate amount of outstanding loan guarantees shall not
exceed four times the amount in the Child Care and Development
Facilities Loan Guaranty Fund.
(4) A loan guarantee made pursuant to this section shall be for
the term of the loan or 20 years, whichever is less. Security for the
guaranteed loan may include a deed of trust, personal guarantees of
shareholders and partners in the case of proprietary borrowers, or
other reasonably available collateral. These liens may be
subordinated to other liens. Default provisions and other terms shall
be reasonable and designed to obtain prompt and full repayment of
the guaranteed loan by the borrower. Reasonable loan guarantee fees
and points may be charged to applicants and borrowers by any public
or private entity approved by the department, as described in
regulations adopted by the department.
(5) A loan guarantee made pursuant to this section shall only be
granted if the applicant agrees to provide child care in a facility
for a period of 20 years or the term of the guaranteed loan,
whichever is less.
(6) A loan guarantee made pursuant to this section terminates 120
days after the lender's receipt of notice that the recipient has
either ceased making payments or providing child care in the facility
for which the loan was made, or both, unless the lender takes action
to accelerate the loan. If a family day care provider ceases to
operate, but retains its three-year license, the provider shall give
notice to the department and the lending institution of its intention
to resume offering child care services for the term of its license,
or shall provide notice of its intention to cease providing child
care services. The Child Care and Development Facilities Loan
Guaranty Fund is not liable for a default occurring after the loan
guarantee has ended.
(e) (1) Moneys deposited in the Child Care and Development
Facilities Direct Loan Fund shall be used for the purpose of making
subordinated loans directly or through a public or private entity
approved by the department to sole proprietorships, partnerships,
proprietary and nonprofit corporations, and local public agencies for
the purchase, development, construction, expansion, or improvement
of licensed child care and development facilities, and for the
purpose of administering these loans. Loans shall be made in
accordance with the priorities established by the department as set
forth in Section 8277.6. The full faith and credit of the State of
California is not pledged to the Child Care and Development
Facilities Direct Loan Fund and the state is not liable for loan
defaults that exceed the amount of funds deposited in the Child Care
and Development Facilities Direct Loan Fund.
(2) A loan made pursuant to this section may not exceed 75 percent
of the total amount of investment for the purchase, development,
expansion, or improvement of eligible child care and development
facilities as described in Section 8277.6 and for related equipment
and fixtures, but may not be used primarily to refinance an existing
loan, for working capital, for supplies, or for inventory. A loan
made pursuant to this section may not exceed 20 percent of the total
amount of investment if the same facility is also utilizing a loan
guarantee pursuant to subdivision (c). Investment for purposes of
this paragraph means the total cost paid or incurred by the applicant
in constructing, renovating, or acquiring a facility. A loan for
improvements shall be limited to those improvements necessary, as
determined by the department, for any of the following purposes:
(A) To obtain, maintain, renew, expand, or revise a child care
license.
(B) To make necessary health and safety improvements.
(C) To make seismic improvements.
(D) To provide access for disabled children.
(E) To expand upon or preserve existing child care operations.
(3) The term of a loan made pursuant to this section may not
exceed 30 years. Security for the loan may include a deed of trust,
personal guarantees of shareholders and partners in the case of
proprietary borrowers, or other reasonably available collateral.
These liens may be subordinated to other liens. The payment
provisions, late charges, and other terms may vary based on the
ability of the borrower to repay the loan, but shall be reasonable
and designed to obtain prompt and full repayment of the loan by the
borrower. A direct loan shall bear simple interest at the rate of 3
percent per annum on the unpaid principal balance. Reasonable loan
fees and points may be charged to applicants and borrowers, as
described in regulations adopted by the department. The department
may permit a loan to be assumed by an otherwise qualified borrower
who agrees to continue to provide child care for the balance of the
original term of the loan.
(f) Funds appropriated for the purposes of this section and
Section 8277.6 shall be made from funds that are not designated as
meeting the state's minimum funding obligation under Section 8 of
Article XVI of the California Constitution.
8277.6. (a) For purposes of this section "department" means the
Department of Housing and Community Development.
(b) The department shall administer the Child Care and Development
Facilities Loan Guaranty Fund and the Child Care and Development
Facilities Direct Loan Fund. The department may administer the funds
directly, through interagency agreements with other state agencies,
through contracts with public or private entities, or through any
combination thereof. If the department determines that a public or
private entity is capable of making child care and development
facilities loans or loan guarantees, the department may delegate the
authority to review and approve those loans or guarantees to the
public or private entity. The department is authorized to enter into
interagency agreements to carry out the purposes of this section and
Section 8277.5 by utilizing the services of small business financial
development corporations established pursuant to Chapter 1
(commencing with Section 14000) of Part 5 of Division 3 of the
Corporations Code. Toward this end, the department is authorized to
transfer funds from the Child Care and Development Facilities Direct
Loan Fund to the California Economic Development Grant and Loan Fund
established by Section 15327 of the Government Code and to transfer
funds from the Child Care and Development Facilities Loan Guaranty
Fund to the Small Business Expansion Fund established by Section
14030 of the Corporations Code. Those funds shall be deposited into a
Child Care Direct Loan Fund Account and a Child Care Loan Guaranty
Fund Account hereby established in the respective funds.
Notwithstanding anything to the contrary in Chapter 1 (commencing
with Section 15310) of Part 6.7 of Division 3 of Title 2 of the
Government Code and Chapter 1 (commencing with Section 14000) of Part
5 of Division 3 of the Corporations Code, the funds in these
accounts shall be administered in compliance with the requirements of
this section and Section 8277.5.
(c) Eligible applicants for the loan guaranty program and the
direct loan program shall include, but not be limited to, sole
proprietorships, partnerships, proprietary and nonprofit
corporations, and local public agencies that are responsible for
contracting with or providing licensed child care and development
services. Eligible facilities shall include licensed full-day and
part-day child care and development facilities and licensed large
family day care homes as described in Section 1597.465 of the Health
and Safety Code, and licensed small family day care homes as
described in Section 1597.44 of the Health and Safety Code.
(d) Loan guarantees and direct loans for family child care homes
shall not be made for the purpose of purchasing a home or any real
property.
(e) The State Department of Education shall provide input
regarding program priorities that shall be considered in the funding
of applications by the department. These priorities shall include,
but are not limited to, the following:
(1) Geographic priorities based on the extent of need for child
care and development supply-building efforts in different parts of
the state.
(A) Not less than 30 percent of the loan guarantee and direct loan
obligations shall benefit providers located in rural areas, as
defined in subparagraph (B). If the amount of qualified applications
from rural providers is insufficient to satisfy this requirement, the
excess capacity reserved for rural providers may be made available
to other qualified applications according to the policies and
procedures of the department. The remaining 70 percent of funds shall
be available to rural or urban areas and other priorities in
accordance with this subdivision.
(B) For purposes of subdivision (a), rural communities are defined
by any county with fewer than 400 residents per square mile.
(2) Age priorities based on the extent of need for child care and
development supply-building efforts for children of different age
groups.
(3) Income priorities shall include families transitioning to work
or other lower income families. For purposes of this section, "lower
income" shall have the same meaning as "income eligible" as set
forth in Section 8263.1.
(4) Program priorities based on the extent of facilities needs
among specific kinds of providers, including those that contract to
administer state and federally funded child care and development
programs administered by the State Department of Education, providers
who have lost classrooms due to class size reduction or other state
or local initiatives, or providers that need to expand to meet the
needs of a child care initiative for recipients of aid under Chapter
3 (commencing with Section 11200) of Part 3 of Division 9 of the
Welfare and Institutions Code, or any successor program.
(f) The program priorities shall reflect input from
representatives of diverse sectors of the child care and development
field, financial institutions, local planning councils, the Child
Development Programs Advisory Committee, and the State Department of
Social Services for purposes of identifying communities with high
percentages of recipients of aid under Chapter 3 (commencing with
Section 11200) of Part 3 of Division 9 of the Welfare and
Institutions Code, or any successor program, who need child care to
meet work requirements. As part of its annual report to the
Legislature, required pursuant to Section 50408 of the Health and
Safety Code, the department shall assess and report, after
consultation with the State Department of Education, on the
performance, effectiveness, and fiscal standing of the Child Care and
Development Facilities Loan Guaranty Fund and the Child Care and
Development Facilities Direct Loan Fund. The report shall include
information on the number of defaults, the types of facilities in
default, and a review of the adequacy of the set-aside for rural
areas specified in paragraph (1) of subdivision (e).
(g) The department shall adopt regulations and establish
priorities, forms, policies and procedures for implementing and
managing the Child Care and Development Facilities Loan Guaranty Fund
and the Child Care and Development Facilities Direct Loan Fund and
making the loan guarantees and direct loans authorized hereunder
consistent with priorities provided by the State Department of
Education. To the extent feasible, the department shall use applicant
fees and points to cover its administrative costs. The department
may utilize an amount of money from the Child Care and Development
Facilities Loan Guaranty Fund and the Child Care and Development
Facilities Direct Loan Fund, as appropriate, for reasonable
administrative costs in any given fiscal year. Unless an
appropriation for administrative costs is made in the annual Budget
Act that exceeds the following limits, administrative expenditures
shall not exceed 3 percent of the amount appropriated to each fund in
the Budget Act of 1997.
(h) (1) The department shall adopt regulations to efficiently and
effectively implement the microenterprise loan program described in
this subdivision, including, but not limited to, the following:
(A) Making loans available from the Child Care and Development
Facilities Direct Loan Fund to local microenterprise loan funds and
other lenders who may relend the funds in appropriate amounts to
eligible small family day care home providers described in Section
1597.44 of the Health and Safety Code, large family day care home
providers described in Section 1597.465 of the Health and Safety
Code, and licensed child care and development facilities that serve
up to 35 children.
(B) Authorizing a specified amount of guarantees of small loans by
local microenterprise loan funds and other lenders serving eligible
small family day care home providers described in Section 1597.44 of
the Health and Safety Code, large family day care home providers
described in Section 1597.465 of the Health and Safety Code, and
licensed child care and development facilities that serve up to 35
children.
(2) Notwithstanding anything to the contrary in this section or
Section 8277.5, a loan made pursuant to this subdivision shall not be
made for less than five thousand dollars ($5,000) or for more than
fifty thousand dollars ($50,000) and shall not be subject to the
75-percent investment restriction contained in paragraph (2) of
subdivision (e) of Section 8277.5.
(i) The department may adopt regulations for the purposes of this
section as emergency regulations in accordance with Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code. For the purposes of the Administrative
Procedure Act, including Section 11349.6 of the Government Code, the
adoption of the regulations shall be deemed to be an emergency and
necessary for the immediate preservation of the public peace, health
and safety, or general welfare, notwithstanding subdivision (e) of
Section 11346.1 of the Government Code. Notwithstanding subdivision
(e) of Section 11346.1, any regulation adopted pursuant to this
section shall not remain in effect more than 180 days unless the
department complies with all provisions of Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code, as required by subdivision (e) of Section 11346.1 of
the Government Code.
8277.65. The Child Care and Development Facilities Loan Guaranty
Fund, the Child Care and Development Facilities Direct Loan Fund, and
the Child Care Loan Guaranty Fund Account in the Small Business
Expansion Fund are abolished. All moneys remaining in the Child Care
and Development Facilities Loan Guaranty Fund, the Child Care and
Development Facilities Direct Loan Fund, and the Child Care Loan
Guaranty Fund Account in the Small Business Expansion Fund shall
revert to the General Fund. The Department of Housing and Community
Development shall deposit all subsequent loan repayments to the
Treasurer to the credit of the General Fund. The abolishment of the
Child Care and Development Facilities Loan Guaranty Fund, the Child
Care and Development Facilities Direct Loan Fund, and the Child Care
Loan Guaranty Fund Account in the Small Business Expansion Fund does
not terminate any of the following rights, obligations, or
authorities, or any provision necessary to carry out those rights,
obligations, or authorities:
(a) The repayment of loans due and payable to the department or
the relevant financial company.
(b) The obligation of the state to pay claims arising from the
default of outstanding loans that have been guaranteed.
(c) Payment to lenders for default of any outstanding guaranteed
loans secured by those moneys.
(d) The resolution of any cost recovery action.
8277.66. Notwithstanding any other provision of law, up to one
hundred thirty-nine thousand dollars ($139,000) may be transferred
from the General Fund to the Small Business Expansion Fund upon the
order of the Director of Finance if funds are needed to pay a loan
guarantee made from the Small Business Expansion Fund pursuant to
Sections 8277.5 and 8277.6. This authority shall expire on the date
upon which all loan guarantees outstanding as of July 1, 2008, are
retired, or January 1, 2020, whichever occurs first.
8277.7. (a) As used in this section:
(1) "Board" means the State Allocation Board.
(2) "Lessee" means a child care and development contracting agency
to whom the board has leased a relocatable facility pursuant to this
section.
(b) The board, with the advice of the Superintendent of Public
Instruction, may do all of the following:
(1) Establish any qualifications that it deems will best serve the
purposes of this section for determining the eligibility of child
care and development contracting agencies to lease relocatable
facilities under this section.
(2) Establish any procedures and policies in connection with the
administration of this section that it deems necessary.
(3) Adopt any rules and regulations for the administration of this
section requiring such procedure, forms, and information that it may
deem necessary.
(4) Have constructed, furnished, equipped, or otherwise require
whatever work is necessary to place relocatable child care and
development facilities where needed.
(5) Own, have maintained, and lease relocatable classrooms to
qualifying child care and development contracting agencies.
(c) The board shall lease relocatable facilities to qualifying
child care and development contracting agencies and shall charge rent
of one dollar ($1) per year. The board shall require lessees to
undertake all necessary maintenance, repairs, renewal, and
replacement to ensure that a project is at all times kept in good
repair, working order, and condition. All costs incurred for this
purpose shall be borne by the lessee.
(d) The board shall require lessees to insure at their own expense
for the benefit of the state, any leased relocatable facility which
is the property of the state, against any risks, including liability
from the use thereof, in the amounts the board may deem necessary to
protect the interest of the state.
(e) The board shall have authority to adopt rules establishing
priorities for the acquisition and leasing of facilities to
contracting agencies which will most benefit children needing child
care and development programs. The board shall require each lessee to
demonstrate that relocatable facilities are utilized solely for
operation of child care and development programs.
(f) No relocatable facilities shall be made available to a
contracting agency unless the agency furnishes evidence, satisfactory
to the board, that the contracting agency has no other facility
available for rental, lease, or purchase in the geographic service
area that is economically or otherwise feasible.
(g) The board shall have prepared for its use, performance
specifications for relocatable facilities and bids for their
construction that can be solicited from more than one responsible
bidder. The board shall from time to time solicit bids from, and
award to, the lowest responsible competitive bidder, contracts for
the construction or purchase of relocatable facilities that have been
approved for lease to eligible child care and development
contracting agencies.
(h) If at any time the board determines that a lessee's need for
particular relocatable facilities which were made available to the
lessee pursuant to this chapter has ceased, the board may take
possession of the relocatable facilities and may lease them to other
eligible contracting agencies or, if there is no longer a need for
the relocatable facilities, the board may dispose of them to public
or private parties in the manner it deems to be in the best interests
of the state.
Any revenue which is derived from a lease or other disposition of
the relocatable facilities pursuant to this section is continuously
appropriated to the board for the purposes of this section to fund
the purchase of other relocatable facilities for child care and
development programs.
8277.8. In the event that a school district elects to discontinue
its contract for child development services, the facilities owned by
the school district and constructed through the provisions of the
local tax override for child development purposes shall be made
available to the local contractor whose bid is accepted for
continuation of the services.
The rent for such facilities shall not exceed the prevailing
rental rate for such facilities.
8278.3. (a) (1) The Child Care Facilities Revolving Fund is hereby
established in the State Treasury to provide funding for the
renovation, repair, or improvement of an existing building to make
the building suitable for licensure for child care and development
services and for the purchase of new relocatable child care
facilities for lease to school districts and contracting agencies
that provide child care and development services, pursuant to this
chapter. The Superintendent of Public Instruction may transfer state
funds appropriated for child care facilities into this fund for
allocation to school districts and contracting agencies, as
specified, for the purchase, transportation, and installation of
facilities for replacement and expansion of capacity. School
districts and contracting agencies using facilities made available by
the use of these funds shall be charged a leasing fee, either at a
fair market value for those facilities or at an amount sufficient to
amortize the cost of purchase and relocation, whichever amount is
lower, over a 10-year period. Upon full repayment of the purchase and
relocation costs, title shall transfer from the State of California
to the school district or contracting agency. The Superintendent of
Public Instruction shall deposit all revenue derived from the lease
payments into the Child Care Facilities Revolving Fund.
(2) Notwithstanding Section 13340 of the Government Code, all
moneys in the fund, including moneys deposited from lease payments,
are continuously appropriated, without regard to fiscal years, to the
Superintendent of Public Instruction for expenditure pursuant to
this article.
(b) On or before August 1 of each fiscal year, the Superintendent
of Public Instruction shall submit to the Office of the Secretary for
Education, the Department of Finance, and the Legislative Analyst's
Office a report detailing the number of funding requests received and
their purpose, the types of agencies that received funding from the
Child Care Facilities Revolving Fund, the increased capacity that
these facilities generated, a description of the manner in which the
facilities are being used, and a projection of the lease payments
collected and the funds available for future use.
(c) A school district or county office of education that provides
child care pursuant to the California School Age Families Education
Program (Article 7.1 (commencing with Section 54740) of Chapter 9 of
Part 29) is eligible to apply for and receive funding pursuant to
this section.
8279. Each county shall, as a minimum, maintain the level of
expenditure for child development services provided by the county
during the 1970-71 fiscal year. These funds shall be used exclusively
for child development programs and shall be considered unrestricted
funds unless restricted by the county granting the funds.
8279.1. (a) The Legislature recognizes that child care programs
have made valuable contributions towards ensuring that public
assistance recipients will be able to accept and maintain employment
or employment-related training. Therefore, it is the intent of the
Legislature that the Superintendent ensure that counties comply with
the requirements of Section 8279.
(b) The Superintendent shall ensure each county's compliance with
Section 8279 by not issuing funds to a local child care contractor
within a county until the Superintendent has received written
certification from that county that the level of expenditure for
child care services provided by the county has been maintained at the
1970-71 fiscal year level pursuant to Section 8279. Funding provided
by a county to a local child care contractor shall not adversely
affect the reimbursement received by the agency from the
Superintendent pursuant to Section 8265, 8265.5, or 8266.
8279.2. The Superintendent of Public Instruction shall publish the
methodology and data used, including county-specific data if such
data is used, for the allocation of all child care funds. The
superintendent shall make available to the public, within 90 days of
an allocation, the accounting information for the allocation. It is
the intent of the Legislature to expedite the allocation of funds to
the field as quickly as possible. Nothing in this section shall
create a requirement for a public hearing on the allocation
methodology prior to the issuance of a request for proposal.
8279.3. (a) The department shall disburse augmentations to the base
allocation for the expansion of child care and development programs
to promote equal access to child development services across the
state.
(b) The Superintendent of Public Instruction shall use the formula
developed pursuant to subdivision (c) and the priorities identified
by local child care and development planning councils, unless those
priorities do not meet the requirements of state or federal law, as a
guide in disbursing augmentations pursuant to subdivision (a).
(c) The Superintendent of Public Instruction shall develop a
formula for prioritizing the disbursement of augmentations pursuant
to this section. The formula shall give priority to allocating funds
to underserved areas. The Superintendent of Public Instruction shall
develop the formula by using the definition of "underserved area" in
subdivision (af) of Section 8208 and direct impact indicators of need
for child care and development services in the county or subcounty
areas. For purposes of this section, "subcounty areas" include, but
are not limited to, school districts, census tracts, or ZIP Code
areas that are deemed by the Superintendent of Public Instruction to
be most appropriate to the type of program receiving an augmentation.
Direct impact indicators of need may include, but are not limited
to, the teenage pregnancy rate, the unemployment rate, area household
income, or the number or percentage of families receiving public
assistance, eligible for Medi-Cal, or eligible for free or
reduced-price school meals, and any unique characteristics of the
population served by the type of program receiving an augmentation.
(d) To promote equal access to services, the Superintendent of
Public Instruction shall include in guidelines developed for use by
local planning councils pursuant to subdivision (d) of Section 8499.5
guidance on identifying underserved areas and populations within
counties. This guidance shall include reference to the direct impact
indicators of need described in subdivision (c).
8279.4. The Legislature finds and declares the following:
(a) There is a serious shortage of quality child day care
facilities throughout the state.
(b) It is in the interest of the state's children and families,
and the state's economic growth, to encourage the expansion of
existing child day care facilities by assisting communities and
interested government and private entities to finance child day care
facilities.
(c) In addition to regional resource centers described in
Provision 7(d) of Item 6110-196-0001 of the Budget Act of 1999, which
focus on developing child care capacity in underserved areas of the
state, there is a need to access capital for facilities on a
systematic basis, especially to use limited public sector funds to
leverage a greater private sector role in financing child day care
facilities. The Legislature finds and declares that a financial
intermediary could fill this role and support the regional resource
centers and other local entities that work with potential providers
by functioning as a centralized repository of training, best
practices, and expertise on facilities financing.
8279.5. (a) The Superintendent of Public Instruction shall contract
with a nonprofit organization to serve as a financial intermediary.
The nonprofit organization shall have staff who have expertise in
financing and capital expansion, are knowledgeable about the child
care field, and have the ability to develop and implement a plan to
increase the availability of financing to renovate, expand, and
construct child day care facilities, both in day care centers and
family day care homes.
(b) The financial intermediary selected by the Superintendent of
Public Instruction shall undertake activities designed to increase
funds available from the private and public sectors for the financing
of child day care facilities. These activities shall include, but
are not limited to, all of the following:
(1) Soliciting capital grants and program-related investments from
foundations and corporations.
(2) Building partnerships with foundations and corporations.
(3) Developing lending commitments, linked deposits, and other
financing programs with conventional financial institutions.
(4) Coordinating private sources of capital with existing public
sector sources of financing for child day care facilities, including,
but not limited to, the Department of Housing and Community
Development and the California Infrastructure and Economic
Development Bank.
(5) Coordinating financing efforts with the technical assistance
provided by the regional resource centers described in Provision 7(d)
of Item 6110-196-0001 of the Budget Act of 1999, and other local
entities that work with potential providers.
(c) This section shall only be implemented to the extent that
funds are appropriated for this purpose in the annual Budget Act.
8279.6. (a) Pursuant to funding made available in subdivision (d)
of Provision 7 of Item 6110-196-001 of the Budget Act of 2000, the
Superintendent of Public Instruction shall contract for a financial
intermediary, pursuant to Section 8290.1, by January 1, 2001.
(b) The financial intermediary, during its first six months of
operation, shall do all of the following:
(1) Create and publicize an 800 technical assistance telephone
service number.
(2) Provide financial development training for agencies at the
local level including, but not limited to, Regional Resource Centers,
Resource and Referral Agencies, and local child care planning
councils that are assisting existing and potential providers
renovate, expand, build or purchase facilities.
(3) Determine the financing barriers and impediments to the
development of child care facilities, especially in underserved areas
of the state.
(4) Identify funding sources that may be leveraged by the state,
and partnerships with the philanthropic and corporate sectors that
may be established, with the goal of increasing funding available for
child care facilities for California's CalWORKs and low-income
families.
8279.7. (a) The Legislature recognizes the importance of providing
quality child care services. It is, therefore, the intent of the
Legislature to assist counties in improving the retention of
qualified child care employees who work directly with children who
receive state-subsidized child care services.
(b) It is further the intent of the Legislature, in amending this
section during the 2009-10 Regular Session, to address the unique
challenges of the County of Los Angeles, in which an estimated 60,000
low-income children receive subsidized child care in nonstate-funded
child care settings and an additional 50,000 eligible children are
waiting for subsidized services.
(c) (1) Except as provided in paragraph (2), the funds
appropriated for the purposes of this section by paragraph (11) of
Schedule (b) of Item 6110-196-0001 of Section 2.00 of the Budget Act
of 2000 (Ch. 52, Stats. 2000), and that are described in subdivision
(i) of Provision 7 of that item, and any other funds appropriated for
purposes of this section, shall be allocated to local child care and
development planning councils based on the percentage of
state-subsidized, center-based child care funds received in that
county, and shall be used to address the retention of qualified child
care employees in state-subsidized child care centers.
(2) Of the funds identified in paragraph (1), funds qualified
pursuant to subparagraphs (A) to (C), inclusive, may also be used to
address the retention of qualified persons working in licensed child
care programs that serve a majority of children who receive
subsidized child care services pursuant to this chapter, including,
but not limited to, family day care homes as defined in Section
1596.78 of the Health and Safety Code. To qualify for use pursuant to
this paragraph, the funds shall meet all of the following
requirements:
(A) The funds are allocated for use in the County of Los Angeles.
(B) The funds are appropriated in the annual Budget Act.
(C) The funds are unexpended after addressing the retention of
qualified child care employees in state-subsidized child care centers
and family child care home education networks.
(d) The department shall develop guidelines for use by local child
care and development planning councils in developing county plans
for the expenditure of funds allocated pursuant to this section.
These guidelines shall be consistent with the department's assessment
of the current needs of the subsidized child care workforce, and
shall be subject to the approval of the Secretary for Education and
the Department of Finance. Any county plan developed pursuant to
these guidelines shall be approved by the department prior to the
allocation of funds to the local child care and development planning
council.
(e) Funds provided to a county for the purposes of this section
shall be used in accordance with the plan approved pursuant to
subdivision (d). A county with an approved plan may retain up to 1
percent of the county's total allocation made pursuant to this
section for reimbursement of administrative expenses associated with
the planning process.
(f) The Superintendent of Public Instruction shall provide an
annual report, no later than April 10 of each year, to the
Legislature, the Secretary for Education, the Department of Finance,
and the Governor that includes, but is not limited to, a summary of
the distribution of the funds by county and a description of the use
of the funds.
8275. (a) The Superintendent may reimburse approvable startup costs
of child development agencies or facilities in an amount not to
exceed 15 percent of the expansion or increase of each agency's total
contract amount. Under no circumstances shall reimbursement for
startup costs result in an increase in the agency's total contract
amount. These funds shall be available for all of the following:
(1) The employment and orientation of necessary staff.
(2) The setting up of the program and facility.
(3) The finalization of rental agreements and the making of
necessary deposits.
(4) The purchase of a reasonable inventory of materials and
supplies.
(5) The purchase of an initial premium for insurance.
(b) Agencies shall submit claims for startup costs with their
first quarterly reports.
(c) The Legislature recognizes that allowances for startup costs
are necessary for the establishment and stability of new child
development programs. Programs initially funded in the 1978-79 fiscal
year and 1979-80 fiscal year are included in this section.
8275.5. The State Department of Education shall promote full
utilization of child care and development funds and match available
unused funds with identified service needs. Notwithstanding the
requirements of Part 2 (commencing with Section 10100) of Division 2
of the Public Contract Code, the department shall arrange interagency
adjustments between different contractors with the same type of
contract when both agencies mutually agree to a temporary transfer of
funds for the balance of the fiscal year.
8276. The Superintendent of Public Instruction shall develop a plan
and procedures for the allocation of expansion funding balances
resulting from the prorata allocation of expansion for the partial
year operations of new agencies.
Such a plan shall provide for the distribution of such funds among
provider agencies whose enrollments include children with special
needs and shall limit provider agencies' use of these funds to the
purchase of Department of Education approved equipment or materials
or one-time-only services, or any of them, that will directly benefit
the children with special needs.
8276.5. The Legislature recognizes the shortage of child care and
development facilities which meet state and local health and safety
standards, and the lack of other sources of funding for renovations
and repairs necessary to upgrade facilities for licensing in order to
accommodate major child care expansion. It is, therefore, the intent
of the Legislature that funds be appropriated for the purpose of
providing small grants, as provided in Section 8277.1, to family day
care homes, and revolving loans with no interest, as provided in
Section 8277.2, to all other types of child care and development
facilities, in order to provide sufficient child care and development
facilities meeting licensing standards to accommodate the level of
child care expansion provided in this chapter.
It is further the intent of the Legislature that funds be
appropriated for the state purchase of relocatable child care and
development facilities as provided in Section 8277.7, for lease to
qualifying contracting agencies in geographic areas with no available
child care and development facilities.
8276.7. Unless specifically exempted by the Legislature, the
administrative cost for all state-funded child care and development
programs and all federal programs administered by the state shall not
exceed 15 percent of the funds provided for those programs.
Eighty-five percent of these funds shall be used to provide direct
services in accordance with rules and regulations, or contractual
funding terms and conditions prescribed by the Superintendent of
Public Instruction.
8277. The Superintendent of Public Instruction shall establish
regulations for the allocation of capital outlay funds provided
pursuant to Section 8277.1 to Section 8277.4, inclusive, to benefit
children most needing child care and development programs. The first
priority for all capital outlay shall be given to facilities located
in geographic areas with no other available enrollment slots in
existing subsidized and nonsubsidized child care and development
facilities. All such capital outlay funding shall be used solely for
purposes of renovation and repair of existing buildings.
The Superintendent of Public Instruction shall establish
qualifications for determining the eligibility of contracting
agencies and day care homes to apply for capital outlay funds.
8277.1. The Superintendent of Public Instruction may allocate to
family day care homes based on need, an amount from the appropriation
in Section 23 of the chapter of the Statutes of 1980 by which this
section was enacted, not to exceed one thousand dollars ($1,000) per
home, for minor capital outlay purchases for the repair and
renovation of homes for the purpose of insuring compliance with state
and local health and safety standards.
It is the intent of the Legislature that capital outlay moneys be
accessible to family day care homes through the auspices of the
contract agency or a family day care association, which may include
resource and referral agencies.
8277.2. The Superintendent of Public Instruction shall establish a
revolving loan fund to provide loans to child care and development
contracting agencies for capital outlay not to exceed 2 percent or
two thousand dollars ($2,000), whichever is greater, of the agency's
contract amount. These loans shall be available with no interest and
shall be used to renovate and repair child care facilities to meet
state and local health and safety standards.
8277.3. Repayments on loans made pursuant to Section 8277.2 shall
commence within one year after allocation of the loan to the
contracting agency. In lieu of payments by the contracting agency,
the Superintendent of Public Instruction shall annually reduce the
agency's contract amount for child care services by at least the
level of normal depreciation allowance on the renovation or repair,
calculated by the straight line method of depreciation.
The entire balance of a loan made pursuant to this section shall
be payable to the Superintendent of Public Instruction immediately if
the contracting agency ceases operation of services to children
subsidized pursuant to this chapter, or if the Superintendent of
Public Instruction fails to renew the agency's contract, or if 10
years have elapsed from the date of the allocation.
The Superintendent of Public Instruction shall deposit all revenue
derived from loan payments made by contracting agencies, or
reductions made by the Superintendent of Public Instruction in
agencies' contracts in lieu of payments, into the revolving loan fund
for allocation to other contracting agencies for capital outlay
projects pursuant to this section.
8277.4. The state shall hold a security interest in all renovations
and repairs funded pursuant to Section 8277.2.
8277.5. (a) For purposes of this section "department" means the
Department of Housing and Community Development.
(b) Subject to appropriation in the annual Budget Act, the Child
Care and Development Facilities Loan Guaranty Fund and the Child Care
and Development Facilities Direct Loan Fund are hereby established
in the State Treasury. The Superintendent of Public Instruction may
transfer state funds appropriated for child care facilities
enhancement and the proceeds derived from any future sales of
tax-exempt child care and development facilities bonds into these
funds.
(c) Notwithstanding Section 13340 of the Government Code, all
moneys in the Child Care and Development Facilities Loan Guaranty
Fund and the Child Care and Development Facilities Direct Loan Fund,
including any interest on loans made from the fund, or loan
repayments to the fund, are hereby continuously appropriated to the
department for carrying out the purposes of this section and Section
8277.6, respectively. Any loan repayment or interest resulting from
investment or deposit of moneys in these funds shall be deposited in
the applicable fund, notwithstanding Section 16305.7 of the
Government Code. Moneys in the funds shall not be subject to transfer
to any other fund pursuant to Part 2 (commencing with Section 16300)
of Division 4 of Title 2 of the Government Code, except the Surplus
Money Investment Fund.
(d) (1) Moneys deposited in the Child Care and Development
Facilities Loan Guaranty Fund shall be used for the purpose of
guaranteeing private sector loans to sole proprietorships,
partnerships, proprietary and nonprofit corporations, and local
public agencies for the purchase, development, construction,
expansion, or improvement of licensed child care and development
facilities, and for the purpose of administering the guarantees of
these loans. The loan guarantees shall be made by the department or
by a public or private entity approved by the department, in
accordance with the priorities established by the department, as
described in Section 8277.6. The full faith and credit of the State
of California is not pledged to the Child Care and Development
Facilities Loan Guaranty Fund and the state is not liable for loan
defaults that exceed the amount of funds deposited with the Child
Care and Development Facilities Loan Guaranty Fund.
(2) A loan guarantee made pursuant to this section may not exceed
80 percent of the principal and interest amount of a private sector
loan guaranteed by the fund and shall be used only to guarantee a
private sector loan for the purchase, development, construction,
expansion, or improvement of facilities described in Section 8277.6
and for related equipment and fixtures, but shall not be used
primarily to refinance an existing loan or for working capital,
supplies, or inventory. A loan guarantee for improvements shall be
limited to those improvements necessary, as determined by the
department, for any of the following purposes:
(A) To obtain, maintain, renew, expand, or revise a child care
license.
(B) To make necessary health and safety improvements.
(C) To make seismic improvements.
(D) To provide access for disabled children.
(E) To expand upon or preserve existing child care operations.
(3) The aggregate amount of outstanding loan guarantees shall not
exceed four times the amount in the Child Care and Development
Facilities Loan Guaranty Fund.
(4) A loan guarantee made pursuant to this section shall be for
the term of the loan or 20 years, whichever is less. Security for the
guaranteed loan may include a deed of trust, personal guarantees of
shareholders and partners in the case of proprietary borrowers, or
other reasonably available collateral. These liens may be
subordinated to other liens. Default provisions and other terms shall
be reasonable and designed to obtain prompt and full repayment of
the guaranteed loan by the borrower. Reasonable loan guarantee fees
and points may be charged to applicants and borrowers by any public
or private entity approved by the department, as described in
regulations adopted by the department.
(5) A loan guarantee made pursuant to this section shall only be
granted if the applicant agrees to provide child care in a facility
for a period of 20 years or the term of the guaranteed loan,
whichever is less.
(6) A loan guarantee made pursuant to this section terminates 120
days after the lender's receipt of notice that the recipient has
either ceased making payments or providing child care in the facility
for which the loan was made, or both, unless the lender takes action
to accelerate the loan. If a family day care provider ceases to
operate, but retains its three-year license, the provider shall give
notice to the department and the lending institution of its intention
to resume offering child care services for the term of its license,
or shall provide notice of its intention to cease providing child
care services. The Child Care and Development Facilities Loan
Guaranty Fund is not liable for a default occurring after the loan
guarantee has ended.
(e) (1) Moneys deposited in the Child Care and Development
Facilities Direct Loan Fund shall be used for the purpose of making
subordinated loans directly or through a public or private entity
approved by the department to sole proprietorships, partnerships,
proprietary and nonprofit corporations, and local public agencies for
the purchase, development, construction, expansion, or improvement
of licensed child care and development facilities, and for the
purpose of administering these loans. Loans shall be made in
accordance with the priorities established by the department as set
forth in Section 8277.6. The full faith and credit of the State of
California is not pledged to the Child Care and Development
Facilities Direct Loan Fund and the state is not liable for loan
defaults that exceed the amount of funds deposited in the Child Care
and Development Facilities Direct Loan Fund.
(2) A loan made pursuant to this section may not exceed 75 percent
of the total amount of investment for the purchase, development,
expansion, or improvement of eligible child care and development
facilities as described in Section 8277.6 and for related equipment
and fixtures, but may not be used primarily to refinance an existing
loan, for working capital, for supplies, or for inventory. A loan
made pursuant to this section may not exceed 20 percent of the total
amount of investment if the same facility is also utilizing a loan
guarantee pursuant to subdivision (c). Investment for purposes of
this paragraph means the total cost paid or incurred by the applicant
in constructing, renovating, or acquiring a facility. A loan for
improvements shall be limited to those improvements necessary, as
determined by the department, for any of the following purposes:
(A) To obtain, maintain, renew, expand, or revise a child care
license.
(B) To make necessary health and safety improvements.
(C) To make seismic improvements.
(D) To provide access for disabled children.
(E) To expand upon or preserve existing child care operations.
(3) The term of a loan made pursuant to this section may not
exceed 30 years. Security for the loan may include a deed of trust,
personal guarantees of shareholders and partners in the case of
proprietary borrowers, or other reasonably available collateral.
These liens may be subordinated to other liens. The payment
provisions, late charges, and other terms may vary based on the
ability of the borrower to repay the loan, but shall be reasonable
and designed to obtain prompt and full repayment of the loan by the
borrower. A direct loan shall bear simple interest at the rate of 3
percent per annum on the unpaid principal balance. Reasonable loan
fees and points may be charged to applicants and borrowers, as
described in regulations adopted by the department. The department
may permit a loan to be assumed by an otherwise qualified borrower
who agrees to continue to provide child care for the balance of the
original term of the loan.
(f) Funds appropriated for the purposes of this section and
Section 8277.6 shall be made from funds that are not designated as
meeting the state's minimum funding obligation under Section 8 of
Article XVI of the California Constitution.
8277.6. (a) For purposes of this section "department" means the
Department of Housing and Community Development.
(b) The department shall administer the Child Care and Development
Facilities Loan Guaranty Fund and the Child Care and Development
Facilities Direct Loan Fund. The department may administer the funds
directly, through interagency agreements with other state agencies,
through contracts with public or private entities, or through any
combination thereof. If the department determines that a public or
private entity is capable of making child care and development
facilities loans or loan guarantees, the department may delegate the
authority to review and approve those loans or guarantees to the
public or private entity. The department is authorized to enter into
interagency agreements to carry out the purposes of this section and
Section 8277.5 by utilizing the services of small business financial
development corporations established pursuant to Chapter 1
(commencing with Section 14000) of Part 5 of Division 3 of the
Corporations Code. Toward this end, the department is authorized to
transfer funds from the Child Care and Development Facilities Direct
Loan Fund to the California Economic Development Grant and Loan Fund
established by Section 15327 of the Government Code and to transfer
funds from the Child Care and Development Facilities Loan Guaranty
Fund to the Small Business Expansion Fund established by Section
14030 of the Corporations Code. Those funds shall be deposited into a
Child Care Direct Loan Fund Account and a Child Care Loan Guaranty
Fund Account hereby established in the respective funds.
Notwithstanding anything to the contrary in Chapter 1 (commencing
with Section 15310) of Part 6.7 of Division 3 of Title 2 of the
Government Code and Chapter 1 (commencing with Section 14000) of Part
5 of Division 3 of the Corporations Code, the funds in these
accounts shall be administered in compliance with the requirements of
this section and Section 8277.5.
(c) Eligible applicants for the loan guaranty program and the
direct loan program shall include, but not be limited to, sole
proprietorships, partnerships, proprietary and nonprofit
corporations, and local public agencies that are responsible for
contracting with or providing licensed child care and development
services. Eligible facilities shall include licensed full-day and
part-day child care and development facilities and licensed large
family day care homes as described in Section 1597.465 of the Health
and Safety Code, and licensed small family day care homes as
described in Section 1597.44 of the Health and Safety Code.
(d) Loan guarantees and direct loans for family child care homes
shall not be made for the purpose of purchasing a home or any real
property.
(e) The State Department of Education shall provide input
regarding program priorities that shall be considered in the funding
of applications by the department. These priorities shall include,
but are not limited to, the following:
(1) Geographic priorities based on the extent of need for child
care and development supply-building efforts in different parts of
the state.
(A) Not less than 30 percent of the loan guarantee and direct loan
obligations shall benefit providers located in rural areas, as
defined in subparagraph (B). If the amount of qualified applications
from rural providers is insufficient to satisfy this requirement, the
excess capacity reserved for rural providers may be made available
to other qualified applications according to the policies and
procedures of the department. The remaining 70 percent of funds shall
be available to rural or urban areas and other priorities in
accordance with this subdivision.
(B) For purposes of subdivision (a), rural communities are defined
by any county with fewer than 400 residents per square mile.
(2) Age priorities based on the extent of need for child care and
development supply-building efforts for children of different age
groups.
(3) Income priorities shall include families transitioning to work
or other lower income families. For purposes of this section, "lower
income" shall have the same meaning as "income eligible" as set
forth in Section 8263.1.
(4) Program priorities based on the extent of facilities needs
among specific kinds of providers, including those that contract to
administer state and federally funded child care and development
programs administered by the State Department of Education, providers
who have lost classrooms due to class size reduction or other state
or local initiatives, or providers that need to expand to meet the
needs of a child care initiative for recipients of aid under Chapter
3 (commencing with Section 11200) of Part 3 of Division 9 of the
Welfare and Institutions Code, or any successor program.
(f) The program priorities shall reflect input from
representatives of diverse sectors of the child care and development
field, financial institutions, local planning councils, the Child
Development Programs Advisory Committee, and the State Department of
Social Services for purposes of identifying communities with high
percentages of recipients of aid under Chapter 3 (commencing with
Section 11200) of Part 3 of Division 9 of the Welfare and
Institutions Code, or any successor program, who need child care to
meet work requirements. As part of its annual report to the
Legislature, required pursuant to Section 50408 of the Health and
Safety Code, the department shall assess and report, after
consultation with the State Department of Education, on the
performance, effectiveness, and fiscal standing of the Child Care and
Development Facilities Loan Guaranty Fund and the Child Care and
Development Facilities Direct Loan Fund. The report shall include
information on the number of defaults, the types of facilities in
default, and a review of the adequacy of the set-aside for rural
areas specified in paragraph (1) of subdivision (e).
(g) The department shall adopt regulations and establish
priorities, forms, policies and procedures for implementing and
managing the Child Care and Development Facilities Loan Guaranty Fund
and the Child Care and Development Facilities Direct Loan Fund and
making the loan guarantees and direct loans authorized hereunder
consistent with priorities provided by the State Department of
Education. To the extent feasible, the department shall use applicant
fees and points to cover its administrative costs. The department
may utilize an amount of money from the Child Care and Development
Facilities Loan Guaranty Fund and the Child Care and Development
Facilities Direct Loan Fund, as appropriate, for reasonable
administrative costs in any given fiscal year. Unless an
appropriation for administrative costs is made in the annual Budget
Act that exceeds the following limits, administrative expenditures
shall not exceed 3 percent of the amount appropriated to each fund in
the Budget Act of 1997.
(h) (1) The department shall adopt regulations to efficiently and
effectively implement the microenterprise loan program described in
this subdivision, including, but not limited to, the following:
(A) Making loans available from the Child Care and Development
Facilities Direct Loan Fund to local microenterprise loan funds and
other lenders who may relend the funds in appropriate amounts to
eligible small family day care home providers described in Section
1597.44 of the Health and Safety Code, large family day care home
providers described in Section 1597.465 of the Health and Safety
Code, and licensed child care and development facilities that serve
up to 35 children.
(B) Authorizing a specified amount of guarantees of small loans by
local microenterprise loan funds and other lenders serving eligible
small family day care home providers described in Section 1597.44 of
the Health and Safety Code, large family day care home providers
described in Section 1597.465 of the Health and Safety Code, and
licensed child care and development facilities that serve up to 35
children.
(2) Notwithstanding anything to the contrary in this section or
Section 8277.5, a loan made pursuant to this subdivision shall not be
made for less than five thousand dollars ($5,000) or for more than
fifty thousand dollars ($50,000) and shall not be subject to the
75-percent investment restriction contained in paragraph (2) of
subdivision (e) of Section 8277.5.
(i) The department may adopt regulations for the purposes of this
section as emergency regulations in accordance with Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code. For the purposes of the Administrative
Procedure Act, including Section 11349.6 of the Government Code, the
adoption of the regulations shall be deemed to be an emergency and
necessary for the immediate preservation of the public peace, health
and safety, or general welfare, notwithstanding subdivision (e) of
Section 11346.1 of the Government Code. Notwithstanding subdivision
(e) of Section 11346.1, any regulation adopted pursuant to this
section shall not remain in effect more than 180 days unless the
department complies with all provisions of Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code, as required by subdivision (e) of Section 11346.1 of
the Government Code.
8277.65. The Child Care and Development Facilities Loan Guaranty
Fund, the Child Care and Development Facilities Direct Loan Fund, and
the Child Care Loan Guaranty Fund Account in the Small Business
Expansion Fund are abolished. All moneys remaining in the Child Care
and Development Facilities Loan Guaranty Fund, the Child Care and
Development Facilities Direct Loan Fund, and the Child Care Loan
Guaranty Fund Account in the Small Business Expansion Fund shall
revert to the General Fund. The Department of Housing and Community
Development shall deposit all subsequent loan repayments to the
Treasurer to the credit of the General Fund. The abolishment of the
Child Care and Development Facilities Loan Guaranty Fund, the Child
Care and Development Facilities Direct Loan Fund, and the Child Care
Loan Guaranty Fund Account in the Small Business Expansion Fund does
not terminate any of the following rights, obligations, or
authorities, or any provision necessary to carry out those rights,
obligations, or authorities:
(a) The repayment of loans due and payable to the department or
the relevant financial company.
(b) The obligation of the state to pay claims arising from the
default of outstanding loans that have been guaranteed.
(c) Payment to lenders for default of any outstanding guaranteed
loans secured by those moneys.
(d) The resolution of any cost recovery action.
8277.66. Notwithstanding any other provision of law, up to one
hundred thirty-nine thousand dollars ($139,000) may be transferred
from the General Fund to the Small Business Expansion Fund upon the
order of the Director of Finance if funds are needed to pay a loan
guarantee made from the Small Business Expansion Fund pursuant to
Sections 8277.5 and 8277.6. This authority shall expire on the date
upon which all loan guarantees outstanding as of July 1, 2008, are
retired, or January 1, 2020, whichever occurs first.
8277.7. (a) As used in this section:
(1) "Board" means the State Allocation Board.
(2) "Lessee" means a child care and development contracting agency
to whom the board has leased a relocatable facility pursuant to this
section.
(b) The board, with the advice of the Superintendent of Public
Instruction, may do all of the following:
(1) Establish any qualifications that it deems will best serve the
purposes of this section for determining the eligibility of child
care and development contracting agencies to lease relocatable
facilities under this section.
(2) Establish any procedures and policies in connection with the
administration of this section that it deems necessary.
(3) Adopt any rules and regulations for the administration of this
section requiring such procedure, forms, and information that it may
deem necessary.
(4) Have constructed, furnished, equipped, or otherwise require
whatever work is necessary to place relocatable child care and
development facilities where needed.
(5) Own, have maintained, and lease relocatable classrooms to
qualifying child care and development contracting agencies.
(c) The board shall lease relocatable facilities to qualifying
child care and development contracting agencies and shall charge rent
of one dollar ($1) per year. The board shall require lessees to
undertake all necessary maintenance, repairs, renewal, and
replacement to ensure that a project is at all times kept in good
repair, working order, and condition. All costs incurred for this
purpose shall be borne by the lessee.
(d) The board shall require lessees to insure at their own expense
for the benefit of the state, any leased relocatable facility which
is the property of the state, against any risks, including liability
from the use thereof, in the amounts the board may deem necessary to
protect the interest of the state.
(e) The board shall have authority to adopt rules establishing
priorities for the acquisition and leasing of facilities to
contracting agencies which will most benefit children needing child
care and development programs. The board shall require each lessee to
demonstrate that relocatable facilities are utilized solely for
operation of child care and development programs.
(f) No relocatable facilities shall be made available to a
contracting agency unless the agency furnishes evidence, satisfactory
to the board, that the contracting agency has no other facility
available for rental, lease, or purchase in the geographic service
area that is economically or otherwise feasible.
(g) The board shall have prepared for its use, performance
specifications for relocatable facilities and bids for their
construction that can be solicited from more than one responsible
bidder. The board shall from time to time solicit bids from, and
award to, the lowest responsible competitive bidder, contracts for
the construction or purchase of relocatable facilities that have been
approved for lease to eligible child care and development
contracting agencies.
(h) If at any time the board determines that a lessee's need for
particular relocatable facilities which were made available to the
lessee pursuant to this chapter has ceased, the board may take
possession of the relocatable facilities and may lease them to other
eligible contracting agencies or, if there is no longer a need for
the relocatable facilities, the board may dispose of them to public
or private parties in the manner it deems to be in the best interests
of the state.
Any revenue which is derived from a lease or other disposition of
the relocatable facilities pursuant to this section is continuously
appropriated to the board for the purposes of this section to fund
the purchase of other relocatable facilities for child care and
development programs.
8277.8. In the event that a school district elects to discontinue
its contract for child development services, the facilities owned by
the school district and constructed through the provisions of the
local tax override for child development purposes shall be made
available to the local contractor whose bid is accepted for
continuation of the services.
The rent for such facilities shall not exceed the prevailing
rental rate for such facilities.
8278.3. (a) (1) The Child Care Facilities Revolving Fund is hereby
established in the State Treasury to provide funding for the
renovation, repair, or improvement of an existing building to make
the building suitable for licensure for child care and development
services and for the purchase of new relocatable child care
facilities for lease to school districts and contracting agencies
that provide child care and development services, pursuant to this
chapter. The Superintendent of Public Instruction may transfer state
funds appropriated for child care facilities into this fund for
allocation to school districts and contracting agencies, as
specified, for the purchase, transportation, and installation of
facilities for replacement and expansion of capacity. School
districts and contracting agencies using facilities made available by
the use of these funds shall be charged a leasing fee, either at a
fair market value for those facilities or at an amount sufficient to
amortize the cost of purchase and relocation, whichever amount is
lower, over a 10-year period. Upon full repayment of the purchase and
relocation costs, title shall transfer from the State of California
to the school district or contracting agency. The Superintendent of
Public Instruction shall deposit all revenue derived from the lease
payments into the Child Care Facilities Revolving Fund.
(2) Notwithstanding Section 13340 of the Government Code, all
moneys in the fund, including moneys deposited from lease payments,
are continuously appropriated, without regard to fiscal years, to the
Superintendent of Public Instruction for expenditure pursuant to
this article.
(b) On or before August 1 of each fiscal year, the Superintendent
of Public Instruction shall submit to the Office of the Secretary for
Education, the Department of Finance, and the Legislative Analyst's
Office a report detailing the number of funding requests received and
their purpose, the types of agencies that received funding from the
Child Care Facilities Revolving Fund, the increased capacity that
these facilities generated, a description of the manner in which the
facilities are being used, and a projection of the lease payments
collected and the funds available for future use.
(c) A school district or county office of education that provides
child care pursuant to the California School Age Families Education
Program (Article 7.1 (commencing with Section 54740) of Chapter 9 of
Part 29) is eligible to apply for and receive funding pursuant to
this section.
8279. Each county shall, as a minimum, maintain the level of
expenditure for child development services provided by the county
during the 1970-71 fiscal year. These funds shall be used exclusively
for child development programs and shall be considered unrestricted
funds unless restricted by the county granting the funds.
8279.1. (a) The Legislature recognizes that child care programs
have made valuable contributions towards ensuring that public
assistance recipients will be able to accept and maintain employment
or employment-related training. Therefore, it is the intent of the
Legislature that the Superintendent ensure that counties comply with
the requirements of Section 8279.
(b) The Superintendent shall ensure each county's compliance with
Section 8279 by not issuing funds to a local child care contractor
within a county until the Superintendent has received written
certification from that county that the level of expenditure for
child care services provided by the county has been maintained at the
1970-71 fiscal year level pursuant to Section 8279. Funding provided
by a county to a local child care contractor shall not adversely
affect the reimbursement received by the agency from the
Superintendent pursuant to Section 8265, 8265.5, or 8266.
8279.2. The Superintendent of Public Instruction shall publish the
methodology and data used, including county-specific data if such
data is used, for the allocation of all child care funds. The
superintendent shall make available to the public, within 90 days of
an allocation, the accounting information for the allocation. It is
the intent of the Legislature to expedite the allocation of funds to
the field as quickly as possible. Nothing in this section shall
create a requirement for a public hearing on the allocation
methodology prior to the issuance of a request for proposal.
8279.3. (a) The department shall disburse augmentations to the base
allocation for the expansion of child care and development programs
to promote equal access to child development services across the
state.
(b) The Superintendent of Public Instruction shall use the formula
developed pursuant to subdivision (c) and the priorities identified
by local child care and development planning councils, unless those
priorities do not meet the requirements of state or federal law, as a
guide in disbursing augmentations pursuant to subdivision (a).
(c) The Superintendent of Public Instruction shall develop a
formula for prioritizing the disbursement of augmentations pursuant
to this section. The formula shall give priority to allocating funds
to underserved areas. The Superintendent of Public Instruction shall
develop the formula by using the definition of "underserved area" in
subdivision (af) of Section 8208 and direct impact indicators of need
for child care and development services in the county or subcounty
areas. For purposes of this section, "subcounty areas" include, but
are not limited to, school districts, census tracts, or ZIP Code
areas that are deemed by the Superintendent of Public Instruction to
be most appropriate to the type of program receiving an augmentation.
Direct impact indicators of need may include, but are not limited
to, the teenage pregnancy rate, the unemployment rate, area household
income, or the number or percentage of families receiving public
assistance, eligible for Medi-Cal, or eligible for free or
reduced-price school meals, and any unique characteristics of the
population served by the type of program receiving an augmentation.
(d) To promote equal access to services, the Superintendent of
Public Instruction shall include in guidelines developed for use by
local planning councils pursuant to subdivision (d) of Section 8499.5
guidance on identifying underserved areas and populations within
counties. This guidance shall include reference to the direct impact
indicators of need described in subdivision (c).
8279.4. The Legislature finds and declares the following:
(a) There is a serious shortage of quality child day care
facilities throughout the state.
(b) It is in the interest of the state's children and families,
and the state's economic growth, to encourage the expansion of
existing child day care facilities by assisting communities and
interested government and private entities to finance child day care
facilities.
(c) In addition to regional resource centers described in
Provision 7(d) of Item 6110-196-0001 of the Budget Act of 1999, which
focus on developing child care capacity in underserved areas of the
state, there is a need to access capital for facilities on a
systematic basis, especially to use limited public sector funds to
leverage a greater private sector role in financing child day care
facilities. The Legislature finds and declares that a financial
intermediary could fill this role and support the regional resource
centers and other local entities that work with potential providers
by functioning as a centralized repository of training, best
practices, and expertise on facilities financing.
8279.5. (a) The Superintendent of Public Instruction shall contract
with a nonprofit organization to serve as a financial intermediary.
The nonprofit organization shall have staff who have expertise in
financing and capital expansion, are knowledgeable about the child
care field, and have the ability to develop and implement a plan to
increase the availability of financing to renovate, expand, and
construct child day care facilities, both in day care centers and
family day care homes.
(b) The financial intermediary selected by the Superintendent of
Public Instruction shall undertake activities designed to increase
funds available from the private and public sectors for the financing
of child day care facilities. These activities shall include, but
are not limited to, all of the following:
(1) Soliciting capital grants and program-related investments from
foundations and corporations.
(2) Building partnerships with foundations and corporations.
(3) Developing lending commitments, linked deposits, and other
financing programs with conventional financial institutions.
(4) Coordinating private sources of capital with existing public
sector sources of financing for child day care facilities, including,
but not limited to, the Department of Housing and Community
Development and the California Infrastructure and Economic
Development Bank.
(5) Coordinating financing efforts with the technical assistance
provided by the regional resource centers described in Provision 7(d)
of Item 6110-196-0001 of the Budget Act of 1999, and other local
entities that work with potential providers.
(c) This section shall only be implemented to the extent that
funds are appropriated for this purpose in the annual Budget Act.
8279.6. (a) Pursuant to funding made available in subdivision (d)
of Provision 7 of Item 6110-196-001 of the Budget Act of 2000, the
Superintendent of Public Instruction shall contract for a financial
intermediary, pursuant to Section 8290.1, by January 1, 2001.
(b) The financial intermediary, during its first six months of
operation, shall do all of the following:
(1) Create and publicize an 800 technical assistance telephone
service number.
(2) Provide financial development training for agencies at the
local level including, but not limited to, Regional Resource Centers,
Resource and Referral Agencies, and local child care planning
councils that are assisting existing and potential providers
renovate, expand, build or purchase facilities.
(3) Determine the financing barriers and impediments to the
development of child care facilities, especially in underserved areas
of the state.
(4) Identify funding sources that may be leveraged by the state,
and partnerships with the philanthropic and corporate sectors that
may be established, with the goal of increasing funding available for
child care facilities for California's CalWORKs and low-income
families.
8279.7. (a) The Legislature recognizes the importance of providing
quality child care services. It is, therefore, the intent of the
Legislature to assist counties in improving the retention of
qualified child care employees who work directly with children who
receive state-subsidized child care services.
(b) It is further the intent of the Legislature, in amending this
section during the 2009-10 Regular Session, to address the unique
challenges of the County of Los Angeles, in which an estimated 60,000
low-income children receive subsidized child care in nonstate-funded
child care settings and an additional 50,000 eligible children are
waiting for subsidized services.
(c) (1) Except as provided in paragraph (2), the funds
appropriated for the purposes of this section by paragraph (11) of
Schedule (b) of Item 6110-196-0001 of Section 2.00 of the Budget Act
of 2000 (Ch. 52, Stats. 2000), and that are described in subdivision
(i) of Provision 7 of that item, and any other funds appropriated for
purposes of this section, shall be allocated to local child care and
development planning councils based on the percentage of
state-subsidized, center-based child care funds received in that
county, and shall be used to address the retention of qualified child
care employees in state-subsidized child care centers.
(2) Of the funds identified in paragraph (1), funds qualified
pursuant to subparagraphs (A) to (C), inclusive, may also be used to
address the retention of qualified persons working in licensed child
care programs that serve a majority of children who receive
subsidized child care services pursuant to this chapter, including,
but not limited to, family day care homes as defined in Section
1596.78 of the Health and Safety Code. To qualify for use pursuant to
this paragraph, the funds shall meet all of the following
requirements:
(A) The funds are allocated for use in the County of Los Angeles.
(B) The funds are appropriated in the annual Budget Act.
(C) The funds are unexpended after addressing the retention of
qualified child care employees in state-subsidized child care centers
and family child care home education networks.
(d) The department shall develop guidelines for use by local child
care and development planning councils in developing county plans
for the expenditure of funds allocated pursuant to this section.
These guidelines shall be consistent with the department's assessment
of the current needs of the subsidized child care workforce, and
shall be subject to the approval of the Secretary for Education and
the Department of Finance. Any county plan developed pursuant to
these guidelines shall be approved by the department prior to the
allocation of funds to the local child care and development planning
council.
(e) Funds provided to a county for the purposes of this section
shall be used in accordance with the plan approved pursuant to
subdivision (d). A county with an approved plan may retain up to 1
percent of the county's total allocation made pursuant to this
section for reimbursement of administrative expenses associated with
the planning process.
(f) The Superintendent of Public Instruction shall provide an
annual report, no later than April 10 of each year, to the
Legislature, the Secretary for Education, the Department of Finance,
and the Governor that includes, but is not limited to, a summary of
the distribution of the funds by county and a description of the use
of the funds.
8275. (a) The Superintendent may reimburse approvable startup costs
of child development agencies or facilities in an amount not to
exceed 15 percent of the expansion or increase of each agency's total
contract amount. Under no circumstances shall reimbursement for
startup costs result in an increase in the agency's total contract
amount. These funds shall be available for all of the following:
(1) The employment and orientation of necessary staff.
(2) The setting up of the program and facility.
(3) The finalization of rental agreements and the making of
necessary deposits.
(4) The purchase of a reasonable inventory of materials and
supplies.
(5) The purchase of an initial premium for insurance.
(b) Agencies shall submit claims for startup costs with their
first quarterly reports.
(c) The Legislature recognizes that allowances for startup costs
are necessary for the establishment and stability of new child
development programs. Programs initially funded in the 1978-79 fiscal
year and 1979-80 fiscal year are included in this section.
8275.5. The State Department of Education shall promote full
utilization of child care and development funds and match available
unused funds with identified service needs. Notwithstanding the
requirements of Part 2 (commencing with Section 10100) of Division 2
of the Public Contract Code, the department shall arrange interagency
adjustments between different contractors with the same type of
contract when both agencies mutually agree to a temporary transfer of
funds for the balance of the fiscal year.
8276. The Superintendent of Public Instruction shall develop a plan
and procedures for the allocation of expansion funding balances
resulting from the prorata allocation of expansion for the partial
year operations of new agencies.
Such a plan shall provide for the distribution of such funds among
provider agencies whose enrollments include children with special
needs and shall limit provider agencies' use of these funds to the
purchase of Department of Education approved equipment or materials
or one-time-only services, or any of them, that will directly benefit
the children with special needs.
8276.5. The Legislature recognizes the shortage of child care and
development facilities which meet state and local health and safety
standards, and the lack of other sources of funding for renovations
and repairs necessary to upgrade facilities for licensing in order to
accommodate major child care expansion. It is, therefore, the intent
of the Legislature that funds be appropriated for the purpose of
providing small grants, as provided in Section 8277.1, to family day
care homes, and revolving loans with no interest, as provided in
Section 8277.2, to all other types of child care and development
facilities, in order to provide sufficient child care and development
facilities meeting licensing standards to accommodate the level of
child care expansion provided in this chapter.
It is further the intent of the Legislature that funds be
appropriated for the state purchase of relocatable child care and
development facilities as provided in Section 8277.7, for lease to
qualifying contracting agencies in geographic areas with no available
child care and development facilities.
8276.7. Unless specifically exempted by the Legislature, the
administrative cost for all state-funded child care and development
programs and all federal programs administered by the state shall not
exceed 15 percent of the funds provided for those programs.
Eighty-five percent of these funds shall be used to provide direct
services in accordance with rules and regulations, or contractual
funding terms and conditions prescribed by the Superintendent of
Public Instruction.
8277. The Superintendent of Public Instruction shall establish
regulations for the allocation of capital outlay funds provided
pursuant to Section 8277.1 to Section 8277.4, inclusive, to benefit
children most needing child care and development programs. The first
priority for all capital outlay shall be given to facilities located
in geographic areas with no other available enrollment slots in
existing subsidized and nonsubsidized child care and development
facilities. All such capital outlay funding shall be used solely for
purposes of renovation and repair of existing buildings.
The Superintendent of Public Instruction shall establish
qualifications for determining the eligibility of contracting
agencies and day care homes to apply for capital outlay funds.
8277.1. The Superintendent of Public Instruction may allocate to
family day care homes based on need, an amount from the appropriation
in Section 23 of the chapter of the Statutes of 1980 by which this
section was enacted, not to exceed one thousand dollars ($1,000) per
home, for minor capital outlay purchases for the repair and
renovation of homes for the purpose of insuring compliance with state
and local health and safety standards.
It is the intent of the Legislature that capital outlay moneys be
accessible to family day care homes through the auspices of the
contract agency or a family day care association, which may include
resource and referral agencies.
8277.2. The Superintendent of Public Instruction shall establish a
revolving loan fund to provide loans to child care and development
contracting agencies for capital outlay not to exceed 2 percent or
two thousand dollars ($2,000), whichever is greater, of the agency's
contract amount. These loans shall be available with no interest and
shall be used to renovate and repair child care facilities to meet
state and local health and safety standards.
8277.3. Repayments on loans made pursuant to Section 8277.2 shall
commence within one year after allocation of the loan to the
contracting agency. In lieu of payments by the contracting agency,
the Superintendent of Public Instruction shall annually reduce the
agency's contract amount for child care services by at least the
level of normal depreciation allowance on the renovation or repair,
calculated by the straight line method of depreciation.
The entire balance of a loan made pursuant to this section shall
be payable to the Superintendent of Public Instruction immediately if
the contracting agency ceases operation of services to children
subsidized pursuant to this chapter, or if the Superintendent of
Public Instruction fails to renew the agency's contract, or if 10
years have elapsed from the date of the allocation.
The Superintendent of Public Instruction shall deposit all revenue
derived from loan payments made by contracting agencies, or
reductions made by the Superintendent of Public Instruction in
agencies' contracts in lieu of payments, into the revolving loan fund
for allocation to other contracting agencies for capital outlay
projects pursuant to this section.
8277.4. The state shall hold a security interest in all renovations
and repairs funded pursuant to Section 8277.2.
8277.5. (a) For purposes of this section "department" means the
Department of Housing and Community Development.
(b) Subject to appropriation in the annual Budget Act, the Child
Care and Development Facilities Loan Guaranty Fund and the Child Care
and Development Facilities Direct Loan Fund are hereby established
in the State Treasury. The Superintendent of Public Instruction may
transfer state funds appropriated for child care facilities
enhancement and the proceeds derived from any future sales of
tax-exempt child care and development facilities bonds into these
funds.
(c) Notwithstanding Section 13340 of the Government Code, all
moneys in the Child Care and Development Facilities Loan Guaranty
Fund and the Child Care and Development Facilities Direct Loan Fund,
including any interest on loans made from the fund, or loan
repayments to the fund, are hereby continuously appropriated to the
department for carrying out the purposes of this section and Section
8277.6, respectively. Any loan repayment or interest resulting from
investment or deposit of moneys in these funds shall be deposited in
the applicable fund, notwithstanding Section 16305.7 of the
Government Code. Moneys in the funds shall not be subject to transfer
to any other fund pursuant to Part 2 (commencing with Section 16300)
of Division 4 of Title 2 of the Government Code, except the Surplus
Money Investment Fund.
(d) (1) Moneys deposited in the Child Care and Development
Facilities Loan Guaranty Fund shall be used for the purpose of
guaranteeing private sector loans to sole proprietorships,
partnerships, proprietary and nonprofit corporations, and local
public agencies for the purchase, development, construction,
expansion, or improvement of licensed child care and development
facilities, and for the purpose of administering the guarantees of
these loans. The loan guarantees shall be made by the department or
by a public or private entity approved by the department, in
accordance with the priorities established by the department, as
described in Section 8277.6. The full faith and credit of the State
of California is not pledged to the Child Care and Development
Facilities Loan Guaranty Fund and the state is not liable for loan
defaults that exceed the amount of funds deposited with the Child
Care and Development Facilities Loan Guaranty Fund.
(2) A loan guarantee made pursuant to this section may not exceed
80 percent of the principal and interest amount of a private sector
loan guaranteed by the fund and shall be used only to guarantee a
private sector loan for the purchase, development, construction,
expansion, or improvement of facilities described in Section 8277.6
and for related equipment and fixtures, but shall not be used
primarily to refinance an existing loan or for working capital,
supplies, or inventory. A loan guarantee for improvements shall be
limited to those improvements necessary, as determined by the
department, for any of the following purposes:
(A) To obtain, maintain, renew, expand, or revise a child care
license.
(B) To make necessary health and safety improvements.
(C) To make seismic improvements.
(D) To provide access for disabled children.
(E) To expand upon or preserve existing child care operations.
(3) The aggregate amount of outstanding loan guarantees shall not
exceed four times the amount in the Child Care and Development
Facilities Loan Guaranty Fund.
(4) A loan guarantee made pursuant to this section shall be for
the term of the loan or 20 years, whichever is less. Security for the
guaranteed loan may include a deed of trust, personal guarantees of
shareholders and partners in the case of proprietary borrowers, or
other reasonably available collateral. These liens may be
subordinated to other liens. Default provisions and other terms shall
be reasonable and designed to obtain prompt and full repayment of
the guaranteed loan by the borrower. Reasonable loan guarantee fees
and points may be charged to applicants and borrowers by any public
or private entity approved by the department, as described in
regulations adopted by the department.
(5) A loan guarantee made pursuant to this section shall only be
granted if the applicant agrees to provide child care in a facility
for a period of 20 years or the term of the guaranteed loan,
whichever is less.
(6) A loan guarantee made pursuant to this section terminates 120
days after the lender's receipt of notice that the recipient has
either ceased making payments or providing child care in the facility
for which the loan was made, or both, unless the lender takes action
to accelerate the loan. If a family day care provider ceases to
operate, but retains its three-year license, the provider shall give
notice to the department and the lending institution of its intention
to resume offering child care services for the term of its license,
or shall provide notice of its intention to cease providing child
care services. The Child Care and Development Facilities Loan
Guaranty Fund is not liable for a default occurring after the loan
guarantee has ended.
(e) (1) Moneys deposited in the Child Care and Development
Facilities Direct Loan Fund shall be used for the purpose of making
subordinated loans directly or through a public or private entity
approved by the department to sole proprietorships, partnerships,
proprietary and nonprofit corporations, and local public agencies for
the purchase, development, construction, expansion, or improvement
of licensed child care and development facilities, and for the
purpose of administering these loans. Loans shall be made in
accordance with the priorities established by the department as set
forth in Section 8277.6. The full faith and credit of the State of
California is not pledged to the Child Care and Development
Facilities Direct Loan Fund and the state is not liable for loan
defaults that exceed the amount of funds deposited in the Child Care
and Development Facilities Direct Loan Fund.
(2) A loan made pursuant to this section may not exceed 75 percent
of the total amount of investment for the purchase, development,
expansion, or improvement of eligible child care and development
facilities as described in Section 8277.6 and for related equipment
and fixtures, but may not be used primarily to refinance an existing
loan, for working capital, for supplies, or for inventory. A loan
made pursuant to this section may not exceed 20 percent of the total
amount of investment if the same facility is also utilizing a loan
guarantee pursuant to subdivision (c). Investment for purposes of
this paragraph means the total cost paid or incurred by the applicant
in constructing, renovating, or acquiring a facility. A loan for
improvements shall be limited to those improvements necessary, as
determined by the department, for any of the following purposes:
(A) To obtain, maintain, renew, expand, or revise a child care
license.
(B) To make necessary health and safety improvements.
(C) To make seismic improvements.
(D) To provide access for disabled children.
(E) To expand upon or preserve existing child care operations.
(3) The term of a loan made pursuant to this section may not
exceed 30 years. Security for the loan may include a deed of trust,
personal guarantees of shareholders and partners in the case of
proprietary borrowers, or other reasonably available collateral.
These liens may be subordinated to other liens. The payment
provisions, late charges, and other terms may vary based on the
ability of the borrower to repay the loan, but shall be reasonable
and designed to obtain prompt and full repayment of the loan by the
borrower. A direct loan shall bear simple interest at the rate of 3
percent per annum on the unpaid principal balance. Reasonable loan
fees and points may be charged to applicants and borrowers, as
described in regulations adopted by the department. The department
may permit a loan to be assumed by an otherwise qualified borrower
who agrees to continue to provide child care for the balance of the
original term of the loan.
(f) Funds appropriated for the purposes of this section and
Section 8277.6 shall be made from funds that are not designated as
meeting the state's minimum funding obligation under Section 8 of
Article XVI of the California Constitution.
8277.6. (a) For purposes of this section "department" means the
Department of Housing and Community Development.
(b) The department shall administer the Child Care and Development
Facilities Loan Guaranty Fund and the Child Care and Development
Facilities Direct Loan Fund. The department may administer the funds
directly, through interagency agreements with other state agencies,
through contracts with public or private entities, or through any
combination thereof. If the department determines that a public or
private entity is capable of making child care and development
facilities loans or loan guarantees, the department may delegate the
authority to review and approve those loans or guarantees to the
public or private entity. The department is authorized to enter into
interagency agreements to carry out the purposes of this section and
Section 8277.5 by utilizing the services of small business financial
development corporations established pursuant to Chapter 1
(commencing with Section 14000) of Part 5 of Division 3 of the
Corporations Code. Toward this end, the department is authorized to
transfer funds from the Child Care and Development Facilities Direct
Loan Fund to the California Economic Development Grant and Loan Fund
established by Section 15327 of the Government Code and to transfer
funds from the Child Care and Development Facilities Loan Guaranty
Fund to the Small Business Expansion Fund established by Section
14030 of the Corporations Code. Those funds shall be deposited into a
Child Care Direct Loan Fund Account and a Child Care Loan Guaranty
Fund Account hereby established in the respective funds.
Notwithstanding anything to the contrary in Chapter 1 (commencing
with Section 15310) of Part 6.7 of Division 3 of Title 2 of the
Government Code and Chapter 1 (commencing with Section 14000) of Part
5 of Division 3 of the Corporations Code, the funds in these
accounts shall be administered in compliance with the requirements of
this section and Section 8277.5.
(c) Eligible applicants for the loan guaranty program and the
direct loan program shall include, but not be limited to, sole
proprietorships, partnerships, proprietary and nonprofit
corporations, and local public agencies that are responsible for
contracting with or providing licensed child care and development
services. Eligible facilities shall include licensed full-day and
part-day child care and development facilities and licensed large
family day care homes as described in Section 1597.465 of the Health
and Safety Code, and licensed small family day care homes as
described in Section 1597.44 of the Health and Safety Code.
(d) Loan guarantees and direct loans for family child care homes
shall not be made for the purpose of purchasing a home or any real
property.
(e) The State Department of Education shall provide input
regarding program priorities that shall be considered in the funding
of applications by the department. These priorities shall include,
but are not limited to, the following:
(1) Geographic priorities based on the extent of need for child
care and development supply-building efforts in different parts of
the state.
(A) Not less than 30 percent of the loan guarantee and direct loan
obligations shall benefit providers located in rural areas, as
defined in subparagraph (B). If the amount of qualified applications
from rural providers is insufficient to satisfy this requirement, the
excess capacity reserved for rural providers may be made available
to other qualified applications according to the policies and
procedures of the department. The remaining 70 percent of funds shall
be available to rural or urban areas and other priorities in
accordance with this subdivision.
(B) For purposes of subdivision (a), rural communities are defined
by any county with fewer than 400 residents per square mile.
(2) Age priorities based on the extent of need for child care and
development supply-building efforts for children of different age
groups.
(3) Income priorities shall include families transitioning to work
or other lower income families. For purposes of this section, "lower
income" shall have the same meaning as "income eligible" as set
forth in Section 8263.1.
(4) Program priorities based on the extent of facilities needs
among specific kinds of providers, including those that contract to
administer state and federally funded child care and development
programs administered by the State Department of Education, providers
who have lost classrooms due to class size reduction or other state
or local initiatives, or providers that need to expand to meet the
needs of a child care initiative for recipients of aid under Chapter
3 (commencing with Section 11200) of Part 3 of Division 9 of the
Welfare and Institutions Code, or any successor program.
(f) The program priorities shall reflect input from
representatives of diverse sectors of the child care and development
field, financial institutions, local planning councils, the Child
Development Programs Advisory Committee, and the State Department of
Social Services for purposes of identifying communities with high
percentages of recipients of aid under Chapter 3 (commencing with
Section 11200) of Part 3 of Division 9 of the Welfare and
Institutions Code, or any successor program, who need child care to
meet work requirements. As part of its annual report to the
Legislature, required pursuant to Section 50408 of the Health and
Safety Code, the department shall assess and report, after
consultation with the State Department of Education, on the
performance, effectiveness, and fiscal standing of the Child Care and
Development Facilities Loan Guaranty Fund and the Child Care and
Development Facilities Direct Loan Fund. The report shall include
information on the number of defaults, the types of facilities in
default, and a review of the adequacy of the set-aside for rural
areas specified in paragraph (1) of subdivision (e).
(g) The department shall adopt regulations and establish
priorities, forms, policies and procedures for implementing and
managing the Child Care and Development Facilities Loan Guaranty Fund
and the Child Care and Development Facilities Direct Loan Fund and
making the loan guarantees and direct loans authorized hereunder
consistent with priorities provided by the State Department of
Education. To the extent feasible, the department shall use applicant
fees and points to cover its administrative costs. The department
may utilize an amount of money from the Child Care and Development
Facilities Loan Guaranty Fund and the Child Care and Development
Facilities Direct Loan Fund, as appropriate, for reasonable
administrative costs in any given fiscal year. Unless an
appropriation for administrative costs is made in the annual Budget
Act that exceeds the following limits, administrative expenditures
shall not exceed 3 percent of the amount appropriated to each fund in
the Budget Act of 1997.
(h) (1) The department shall adopt regulations to efficiently and
effectively implement the microenterprise loan program described in
this subdivision, including, but not limited to, the following:
(A) Making loans available from the Child Care and Development
Facilities Direct Loan Fund to local microenterprise loan funds and
other lenders who may relend the funds in appropriate amounts to
eligible small family day care home providers described in Section
1597.44 of the Health and Safety Code, large family day care home
providers described in Section 1597.465 of the Health and Safety
Code, and licensed child care and development facilities that serve
up to 35 children.
(B) Authorizing a specified amount of guarantees of small loans by
local microenterprise loan funds and other lenders serving eligible
small family day care home providers described in Section 1597.44 of
the Health and Safety Code, large family day care home providers
described in Section 1597.465 of the Health and Safety Code, and
licensed child care and development facilities that serve up to 35
children.
(2) Notwithstanding anything to the contrary in this section or
Section 8277.5, a loan made pursuant to this subdivision shall not be
made for less than five thousand dollars ($5,000) or for more than
fifty thousand dollars ($50,000) and shall not be subject to the
75-percent investment restriction contained in paragraph (2) of
subdivision (e) of Section 8277.5.
(i) The department may adopt regulations for the purposes of this
section as emergency regulations in accordance with Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code. For the purposes of the Administrative
Procedure Act, including Section 11349.6 of the Government Code, the
adoption of the regulations shall be deemed to be an emergency and
necessary for the immediate preservation of the public peace, health
and safety, or general welfare, notwithstanding subdivision (e) of
Section 11346.1 of the Government Code. Notwithstanding subdivision
(e) of Section 11346.1, any regulation adopted pursuant to this
section shall not remain in effect more than 180 days unless the
department complies with all provisions of Chapter 3.5 (commencing
with Section 11340) of Part 1 of Division 3 of Title 2 of the
Government Code, as required by subdivision (e) of Section 11346.1 of
the Government Code.
8277.65. The Child Care and Development Facilities Loan Guaranty
Fund, the Child Care and Development Facilities Direct Loan Fund, and
the Child Care Loan Guaranty Fund Account in the Small Business
Expansion Fund are abolished. All moneys remaining in the Child Care
and Development Facilities Loan Guaranty Fund, the Child Care and
Development Facilities Direct Loan Fund, and the Child Care Loan
Guaranty Fund Account in the Small Business Expansion Fund shall
revert to the General Fund. The Department of Housing and Community
Development shall deposit all subsequent loan repayments to the
Treasurer to the credit of the General Fund. The abolishment of the
Child Care and Development Facilities Loan Guaranty Fund, the Child
Care and Development Facilities Direct Loan Fund, and the Child Care
Loan Guaranty Fund Account in the Small Business Expansion Fund does
not terminate any of the following rights, obligations, or
authorities, or any provision necessary to carry out those rights,
obligations, or authorities:
(a) The repayment of loans due and payable to the department or
the relevant financial company.
(b) The obligation of the state to pay claims arising from the
default of outstanding loans that have been guaranteed.
(c) Payment to lenders for default of any outstanding guaranteed
loans secured by those moneys.
(d) The resolution of any cost recovery action.
8277.66. Notwithstanding any other provision of law, up to one
hundred thirty-nine thousand dollars ($139,000) may be transferred
from the General Fund to the Small Business Expansion Fund upon the
order of the Director of Finance if funds are needed to pay a loan
guarantee made from the Small Business Expansion Fund pursuant to
Sections 8277.5 and 8277.6. This authority shall expire on the date
upon which all loan guarantees outstanding as of July 1, 2008, are
retired, or January 1, 2020, whichever occurs first.
8277.7. (a) As used in this section:
(1) "Board" means the State Allocation Board.
(2) "Lessee" means a child care and development contracting agency
to whom the board has leased a relocatable facility pursuant to this
section.
(b) The board, with the advice of the Superintendent of Public
Instruction, may do all of the following:
(1) Establish any qualifications that it deems will best serve the
purposes of this section for determining the eligibility of child
care and development contracting agencies to lease relocatable
facilities under this section.
(2) Establish any procedures and policies in connection with the
administration of this section that it deems necessary.
(3) Adopt any rules and regulations for the administration of this
section requiring such procedure, forms, and information that it may
deem necessary.
(4) Have constructed, furnished, equipped, or otherwise require
whatever work is necessary to place relocatable child care and
development facilities where needed.
(5) Own, have maintained, and lease relocatable classrooms to
qualifying child care and development contracting agencies.
(c) The board shall lease relocatable facilities to qualifying
child care and development contracting agencies and shall charge rent
of one dollar ($1) per year. The board shall require lessees to
undertake all necessary maintenance, repairs, renewal, and
replacement to ensure that a project is at all times kept in good
repair, working order, and condition. All costs incurred for this
purpose shall be borne by the lessee.
(d) The board shall require lessees to insure at their own expense
for the benefit of the state, any leased relocatable facility which
is the property of the state, against any risks, including liability
from the use thereof, in the amounts the board may deem necessary to
protect the interest of the state.
(e) The board shall have authority to adopt rules establishing
priorities for the acquisition and leasing of facilities to
contracting agencies which will most benefit children needing child
care and development programs. The board shall require each lessee to
demonstrate that relocatable facilities are utilized solely for
operation of child care and development programs.
(f) No relocatable facilities shall be made available to a
contracting agency unless the agency furnishes evidence, satisfactory
to the board, that the contracting agency has no other facility
available for rental, lease, or purchase in the geographic service
area that is economically or otherwise feasible.
(g) The board shall have prepared for its use, performance
specifications for relocatable facilities and bids for their
construction that can be solicited from more than one responsible
bidder. The board shall from time to time solicit bids from, and
award to, the lowest responsible competitive bidder, contracts for
the construction or purchase of relocatable facilities that have been
approved for lease to eligible child care and development
contracting agencies.
(h) If at any time the board determines that a lessee's need for
particular relocatable facilities which were made available to the
lessee pursuant to this chapter has ceased, the board may take
possession of the relocatable facilities and may lease them to other
eligible contracting agencies or, if there is no longer a need for
the relocatable facilities, the board may dispose of them to public
or private parties in the manner it deems to be in the best interests
of the state.
Any revenue which is derived from a lease or other disposition of
the relocatable facilities pursuant to this section is continuously
appropriated to the board for the purposes of this section to fund
the purchase of other relocatable facilities for child care and
development programs.
8277.8. In the event that a school district elects to discontinue
its contract for child development services, the facilities owned by
the school district and constructed through the provisions of the
local tax override for child development purposes shall be made
available to the local contractor whose bid is accepted for
continuation of the services.
The rent for such facilities shall not exceed the prevailing
rental rate for such facilities.
8278.3. (a) (1) The Child Care Facilities Revolving Fund is hereby
established in the State Treasury to provide funding for the
renovation, repair, or improvement of an existing building to make
the building suitable for licensure for child care and development
services and for the purchase of new relocatable child care
facilities for lease to school districts and contracting agencies
that provide child care and development services, pursuant to this
chapter. The Superintendent of Public Instruction may transfer state
funds appropriated for child care facilities into this fund for
allocation to school districts and contracting agencies, as
specified, for the purchase, transportation, and installation of
facilities for replacement and expansion of capacity. School
districts and contracting agencies using facilities made available by
the use of these funds shall be charged a leasing fee, either at a
fair market value for those facilities or at an amount sufficient to
amortize the cost of purchase and relocation, whichever amount is
lower, over a 10-year period. Upon full repayment of the purchase and
relocation costs, title shall transfer from the State of California
to the school district or contracting agency. The Superintendent of
Public Instruction shall deposit all revenue derived from the lease
payments into the Child Care Facilities Revolving Fund.
(2) Notwithstanding Section 13340 of the Government Code, all
moneys in the fund, including moneys deposited from lease payments,
are continuously appropriated, without regard to fiscal years, to the
Superintendent of Public Instruction for expenditure pursuant to
this article.
(b) On or before August 1 of each fiscal year, the Superintendent
of Public Instruction shall submit to the Office of the Secretary for
Education, the Department of Finance, and the Legislative Analyst's
Office a report detailing the number of funding requests received and
their purpose, the types of agencies that received funding from the
Child Care Facilities Revolving Fund, the increased capacity that
these facilities generated, a description of the manner in which the
facilities are being used, and a projection of the lease payments
collected and the funds available for future use.
(c) A school district or county office of education that provides
child care pursuant to the California School Age Families Education
Program (Article 7.1 (commencing with Section 54740) of Chapter 9 of
Part 29) is eligible to apply for and receive funding pursuant to
this section.
8279. Each county shall, as a minimum, maintain the level of
expenditure for child development services provided by the county
during the 1970-71 fiscal year. These funds shall be used exclusively
for child development programs and shall be considered unrestricted
funds unless restricted by the county granting the funds.
8279.1. (a) The Legislature recognizes that child care programs
have made valuable contributions towards ensuring that public
assistance recipients will be able to accept and maintain employment
or employment-related training. Therefore, it is the intent of the
Legislature that the Superintendent ensure that counties comply with
the requirements of Section 8279.
(b) The Superintendent shall ensure each county's compliance with
Section 8279 by not issuing funds to a local child care contractor
within a county until the Superintendent has received written
certification from that county that the level of expenditure for
child care services provided by the county has been maintained at the
1970-71 fiscal year level pursuant to Section 8279. Funding provided
by a county to a local child care contractor shall not adversely
affect the reimbursement received by the agency from the
Superintendent pursuant to Section 8265, 8265.5, or 8266.
8279.2. The Superintendent of Public Instruction shall publish the
methodology and data used, including county-specific data if such
data is used, for the allocation of all child care funds. The
superintendent shall make available to the public, within 90 days of
an allocation, the accounting information for the allocation. It is
the intent of the Legislature to expedite the allocation of funds to
the field as quickly as possible. Nothing in this section shall
create a requirement for a public hearing on the allocation
methodology prior to the issuance of a request for proposal.
8279.3. (a) The department shall disburse augmentations to the base
allocation for the expansion of child care and development programs
to promote equal access to child development services across the
state.
(b) The Superintendent of Public Instruction shall use the formula
developed pursuant to subdivision (c) and the priorities identified
by local child care and development planning councils, unless those
priorities do not meet the requirements of state or federal law, as a
guide in disbursing augmentations pursuant to subdivision (a).
(c) The Superintendent of Public Instruction shall develop a
formula for prioritizing the disbursement of augmentations pursuant
to this section. The formula shall give priority to allocating funds
to underserved areas. The Superintendent of Public Instruction shall
develop the formula by using the definition of "underserved area" in
subdivision (af) of Section 8208 and direct impact indicators of need
for child care and development services in the county or subcounty
areas. For purposes of this section, "subcounty areas" include, but
are not limited to, school districts, census tracts, or ZIP Code
areas that are deemed by the Superintendent of Public Instruction to
be most appropriate to the type of program receiving an augmentation.
Direct impact indicators of need may include, but are not limited
to, the teenage pregnancy rate, the unemployment rate, area household
income, or the number or percentage of families receiving public
assistance, eligible for Medi-Cal, or eligible for free or
reduced-price school meals, and any unique characteristics of the
population served by the type of program receiving an augmentation.
(d) To promote equal access to services, the Superintendent of
Public Instruction shall include in guidelines developed for use by
local planning councils pursuant to subdivision (d) of Section 8499.5
guidance on identifying underserved areas and populations within
counties. This guidance shall include reference to the direct impact
indicators of need described in subdivision (c).
8279.4. The Legislature finds and declares the following:
(a) There is a serious shortage of quality child day care
facilities throughout the state.
(b) It is in the interest of the state's children and families,
and the state's economic growth, to encourage the expansion of
existing child day care facilities by assisting communities and
interested government and private entities to finance child day care
facilities.
(c) In addition to regional resource centers described in
Provision 7(d) of Item 6110-196-0001 of the Budget Act of 1999, which
focus on developing child care capacity in underserved areas of the
state, there is a need to access capital for facilities on a
systematic basis, especially to use limited public sector funds to
leverage a greater private sector role in financing child day care
facilities. The Legislature finds and declares that a financial
intermediary could fill this role and support the regional resource
centers and other local entities that work with potential providers
by functioning as a centralized repository of training, best
practices, and expertise on facilities financing.
8279.5. (a) The Superintendent of Public Instruction shall contract
with a nonprofit organization to serve as a financial intermediary.
The nonprofit organization shall have staff who have expertise in
financing and capital expansion, are knowledgeable about the child
care field, and have the ability to develop and implement a plan to
increase the availability of financing to renovate, expand, and
construct child day care facilities, both in day care centers and
family day care homes.
(b) The financial intermediary selected by the Superintendent of
Public Instruction shall undertake activities designed to increase
funds available from the private and public sectors for the financing
of child day care facilities. These activities shall include, but
are not limited to, all of the following:
(1) Soliciting capital grants and program-related investments from
foundations and corporations.
(2) Building partnerships with foundations and corporations.
(3) Developing lending commitments, linked deposits, and other
financing programs with conventional financial institutions.
(4) Coordinating private sources of capital with existing public
sector sources of financing for child day care facilities, including,
but not limited to, the Department of Housing and Community
Development and the California Infrastructure and Economic
Development Bank.
(5) Coordinating financing efforts with the technical assistance
provided by the regional resource centers described in Provision 7(d)
of Item 6110-196-0001 of the Budget Act of 1999, and other local
entities that work with potential providers.
(c) This section shall only be implemented to the extent that
funds are appropriated for this purpose in the annual Budget Act.
8279.6. (a) Pursuant to funding made available in subdivision (d)
of Provision 7 of Item 6110-196-001 of the Budget Act of 2000, the
Superintendent of Public Instruction shall contract for a financial
intermediary, pursuant to Section 8290.1, by January 1, 2001.
(b) The financial intermediary, during its first six months of
operation, shall do all of the following:
(1) Create and publicize an 800 technical assistance telephone
service number.
(2) Provide financial development training for agencies at the
local level including, but not limited to, Regional Resource Centers,
Resource and Referral Agencies, and local child care planning
councils that are assisting existing and potential providers
renovate, expand, build or purchase facilities.
(3) Determine the financing barriers and impediments to the
development of child care facilities, especially in underserved areas
of the state.
(4) Identify funding sources that may be leveraged by the state,
and partnerships with the philanthropic and corporate sectors that
may be established, with the goal of increasing funding available for
child care facilities for California's CalWORKs and low-income
families.
8279.7. (a) The Legislature recognizes the importance of providing
quality child care services. It is, therefore, the intent of the
Legislature to assist counties in improving the retention of
qualified child care employees who work directly with children who
receive state-subsidized child care services.
(b) It is further the intent of the Legislature, in amending this
section during the 2009-10 Regular Session, to address the unique
challenges of the County of Los Angeles, in which an estimated 60,000
low-income children receive subsidized child care in nonstate-funded
child care settings and an additional 50,000 eligible children are
waiting for subsidized services.
(c) (1) Except as provided in paragraph (2), the funds
appropriated for the purposes of this section by paragraph (11) of
Schedule (b) of Item 6110-196-0001 of Section 2.00 of the Budget Act
of 2000 (Ch. 52, Stats. 2000), and that are described in subdivision
(i) of Provision 7 of that item, and any other funds appropriated for
purposes of this section, shall be allocated to local child care and
development planning councils based on the percentage of
state-subsidized, center-based child care funds received in that
county, and shall be used to address the retention of qualified child
care employees in state-subsidized child care centers.
(2) Of the funds identified in paragraph (1), funds qualified
pursuant to subparagraphs (A) to (C), inclusive, may also be used to
address the retention of qualified persons working in licensed child
care programs that serve a majority of children who receive
subsidized child care services pursuant to this chapter, including,
but not limited to, family day care homes as defined in Section
1596.78 of the Health and Safety Code. To qualify for use pursuant to
this paragraph, the funds shall meet all of the following
requirements:
(A) The funds are allocated for use in the County of Los Angeles.
(B) The funds are appropriated in the annual Budget Act.
(C) The funds are unexpended after addressing the retention of
qualified child care employees in state-subsidized child care centers
and family child care home education networks.
(d) The department shall develop guidelines for use by local child
care and development planning councils in developing county plans
for the expenditure of funds allocated pursuant to this section.
These guidelines shall be consistent with the department's assessment
of the current needs of the subsidized child care workforce, and
shall be subject to the approval of the Secretary for Education and
the Department of Finance. Any county plan developed pursuant to
these guidelines shall be approved by the department prior to the
allocation of funds to the local child care and development planning
council.
(e) Funds provided to a county for the purposes of this section
shall be used in accordance with the plan approved pursuant to
subdivision (d). A county with an approved plan may retain up to 1
percent of the county's total allocation made pursuant to this
section for reimbursement of administrative expenses associated with
the planning process.
(f) The Superintendent of Public Instruction shall provide an
annual report, no later than April 10 of each year, to the
Legislature, the Secretary for Education, the Department of Finance,
and the Governor that includes, but is not limited to, a summary of
the distribution of the funds by county and a description of the use
of the funds.
