Home > 106th Congressional Bills > H.R. 5266 (eh) For the relief of Saeed Rezai. [Engrossed in House] ...H.R. 5266 (eh) For the relief of Saeed Rezai. [Engrossed in House] ...
108th CONGRESS
2d Session
H. R. 5265
To amend the National Housing Act to authorize the Secretary of Housing
and Urban Development to insure mortgages for the acquisition,
construction, or substantial rehabilitation of child care and
development facilities and to establish the Children's Development
Commission (Kiddie Mac) to certify such facilities for such insurance,
and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 7, 2004
Mrs. Maloney introduced the following bill; which was referred to the
Committee on Financial Services
_______________________________________________________________________
A BILL
To amend the National Housing Act to authorize the Secretary of Housing
and Urban Development to insure mortgages for the acquisition,
construction, or substantial rehabilitation of child care and
development facilities and to establish the Children's Development
Commission (Kiddie Mac) to certify such facilities for such insurance,
and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Children's Development Commission
Act (Kiddie Mac)''.
SEC. 2. CONGRESSIONAL FINDINGS.
The Congress finds the following:
(1) The need for quality nursery schools, both full-time
and part-time child care centers and after-school programs,
neighborhood-run mothers-day-out programs, and family child
care providers has grown among working parents, and parents who
stay at home, who want their children to have access to early
childhood education.
(2) All parents should have access to safe, stimulating,
and educational early childhood education programs for their
children, whether such programs are carried out in a child care
center, a part-time nursery school (including a nursery school
operated by a religious organization), or a certified child
care provider's home.
(3) The number of available enrollment opportunities for
children to receive quality child care services is not meeting
the demand for such services.
(4) In 1995 there were about 21,000,000 children less than
6 years of age, of whom 31 percent were participating in
center-based child care services and 14 percent were receiving
child care in homes. Between 1992 and 2005 the participation of
women 24 to 54 years of age in the labor force is projected to
increase from 75 percent to 83 percent.
(5) In States that have set up a mechanism to provide
capital improvements for child care facilities, the demand for
services of such facilities still has not been met.
(6) The United States is behind other western,
industrialized countries when it comes to providing child care
services. In France, almost 100 percent of all children 3 to 5
years of age attend nursery school. In Germany this number is
78 percent. In Japan 90 percent of such children attend some
form of preschool care. In all of these countries early
childhood care has proven to increase children's development
and performance.
SEC. 3. INSURANCE FOR MORTGAGES ON NEW AND REHABILITATED CHILD CARE AND
DEVELOPMENT FACILITIES.
Title II of the National Housing Act (12 U.S.C. 1707 et seq.) is
amended by adding at the end the following new section:
``SEC. 257. MORTGAGE INSURANCE FOR CHILD CARE AND DEVELOPMENT
FACILITIES.
``(a) Purpose.--The purpose of this section is to facilitate and
assist in the provision and development of licensed child care and
development facilities.
``(b) General Insurance Authority.--The Secretary may insure
mortgages (including advances on such mortgages during construction) in
accordance with the provisions of this section and upon such terms and
conditions as the Secretary may prescribe and may make commitments for
insurance of such mortgages before the date of their execution or
disbursement thereon.
``(c) Eligible Mortgages.--To carry out the purpose of this
section, the Secretary may insure any mortgage that covers a new child
care and development facility, including a new addition to an existing
child care and development facility (regardless of whether the existing
facility is being rehabilitated), or a substantially rehabilitated
child care and development facility, including equipment to be used in
the operation of the facility, subject to the following conditions:
``(1) Approved mortgagor.--The mortgage shall be executed
by a mortgagor approved by the Secretary. The Secretary may, in
the discretion of the Secretary, require any such mortgagor to
be regulated or restricted as to charges and methods of
financing and, if the mortgagor is a corporate entity, as to
capital structure and rate of return. As an aid to the
regulation or restriction of any mortgagor with respect to any
of the foregoing matters, the Secretary may make such contracts
with and acquire for not more than $100 such stock or interest
in such mortgagor as the Secretary may consider necessary. Any
stock or interest so purchased shall be paid for out of the
General Insurance Fund, and shall be redeemed by the mortgagor
at par upon the termination of all obligations of the Secretary
under the insurance.
``(2) Principal obligation.--
``(A) In general.--Except as provided in
subparagraph (B), the mortgage shall involve a
principal obligation in an amount not to exceed 80
percent of the estimated value of the property or
project, or 85 percent of the estimated value of the
property or project in the case only of a mortgagor
that is a private nonprofit corporation or association
(as such term is defined pursuant to section
221(d)(3)), including--
``(i) equipment to be used in the operation
of the facility when the proposed improvements
are completed and the equipment is installed;
or
``(ii) a solar energy system (as defined in
subparagraph (3) of the last paragraph of
section 2(a)) or residential energy
conservation measures (as defined in
subparagraphs (A) through (G) and (I) of
section 210(11) of the National Energy
Conservation Policy Act), in cases in which the
Secretary determines that such measures are in
addition to those required under the minimum
property standards and will be cost-effective
over the life of the measure.
``(B) Increase for certain distressed areas.--In
the case of any mortgage for a child care and
development facility that is located in a distressed
area and for which more than 50 percent of the children
served by the facility are children of families or
individuals who are eligible for assistance under a
State program for temporary assistance for needy
families that is funded under part A of title IV of the
Social Security Act, the mortgage shall involve
principal obligation in an amount not to exceed the sum
of the amount determined under subparagraph (A) for the
mortgagor and 5 percent of the estimated value of the
property or project.
``(3) Amortization and interest.--The mortgage shall--
``(A) provide for complete amortization by periodic
payments under such terms as the Secretary shall
prescribe;
``(B) have a maturity satisfactory to the
Secretary, but in no event longer than 25 years; and
``(C) bear interest at such rate as may be agreed
upon by the mortgagor and the mortgagee, and the
Secretary shall not issue any regulations or establish
any terms or conditions that interfere with the ability
of the mortgagor and mortgagee to determine the
interest rate.
``(d) Certification by Children's Development Commission.--The
Secretary may not insure a mortgage under this section unless the
Children's Development Commission established under section 258
certifies that the facility is in compliance, or will be in compliance
not later than 12 months after such certification, with--
``(1) any laws, standards, and requirements applicable to
such facilities under the laws of the State, municipality, or
other unit of general local government in which the facility is
or is to be located; and
``(2) after the effective date of the standards and
requirements established under section 258(c)(2), such
standards and requirements.
``(e) Low-Income Clientele.--The Secretary may not insure a
mortgage under this section unless the mortgage certifies, to the
satisfaction of the Secretary, that not less than 20 percent of the
children served by the facility during the period that the mortgage is
outstanding shall be children of families having incomes less than the
median income for the metropolitan statistical area in which the
facility is located.
``(f) Release.--The Secretary may consent to the release of a part
or parts of the mortgaged property or project from the lien of any
mortgage insured under this section upon such terms and conditions as
the Secretary may prescribe.
``(g) Mortgage Insurance Terms.--The provisions of subsections (d),
(e), (g), (h), (i), (j), (k), (l), and (n) of section 207 shall apply
to mortgages insured under this section, except that all references in
such subsections to section 207 shall be considered, for purposes of
mortgage insurance under this section, to refer to this section.
``(h) Mortgage Insurance for Fire Safety Equipment Loans.--
``(1) Authority.--The Secretary may, upon such terms and
condition as the Secretary may prescribe, make commitments to
insure and insure loans made by financial institutions or other
approved mortgagees to child care and development facilities to
provide for the purchase and installation of fire safety
equipment necessary for compliance with the 1967 edition of the
Life Safety Code of the National Fire Protection Association
(or any subsequent edition specified by the Secretary of Health
and Human Services).
``(2) Loan requirements.--To be eligible for insurance
under this subsection a loan shall--
``(A) not exceed the Secretary's estimate of the
reasonable cost of the equipment fully installed;
``(B) bear interest at such rate as may be agreed
upon by the mortgagor and the mortgagee;
``(C) have a maturity satisfactory to the
Secretary;
``(D) be made by a financial institution or other
mortgagee approved by the Secretary as eligible for
insurance under section 2 or a mortgagee approved under
section 203(b)(1);
``(E) comply with other such terms, conditions, and
restrictions as the Secretary may prescribe; and
``(F) be made with respect to a child care and
development facility that complies with the requirement
under subsection (d).
``(3) Insurance requirements.--The provisions of paragraphs
(5), (6), (7), (9), and (10) of section 220(h) shall apply to
loans insured under this subsection, except that all references
in such paragraphs to home improvement loans shall be
considered, for purposes of this subsection, to refer to loans
under this subsection. The provisions of subsections (c), (d),
and (h) of section 2 shall apply to loans insured under this
subsection, except that all references in such subsections to
`this section' or `this title' shall be considered, for
purposes of this subsection, to refer to this subsection.
``(i) Schedules and Deadlines.--The Secretary shall establish
schedules and deadlines for the processing and approval (or provision
of notice of disapproval) of applications for mortgage insurance under
this section.
``(j) Definitions.--For the purposes of this section, the following
definitions shall apply:
``(1) Child care and development facility.--The term `child
care and development facility' means a public facility,
proprietary facility, or facility of a private nonprofit
corporation or association that--
``(A) has as its purpose the care and development
of children less than 12 years of age; and
``(B) is licensed or regulated by the State in
which it is located (or, if there is no State law
providing for such licensing and regulation by the
State, by the municipality or other political
subdivision in which the facility is located).
The term does not include facilities for school-age children
primarily for use during normal school hours. The term includes
facilities for training individuals to provide child care and
development services.
``(2) Distressed area.--The term `distressed area' means an
area that--
``(A) meets the requirements under subchapter U of
chapter I of the Internal Revenue Code (26 U.S.C. 1391
et seq.) for designation as an enterprise community or
empowerment zone under such subchapter; or
``(B) is a census tract that has a median income
that does not exceed 50 percent of the median income
for the region in which the census tract is located, as
determined by the Secretary.
For purposes of subparagraph (B), a region shall be determined
by the Secretary in the same manner as areas are determined for
purposes of determining income limitations for assistance under
section 8 of the United States Housing Act of 1937 (42 U.S.C.
1437f).
``(3) Equipment.--The term `equipment' includes machinery,
utilities, and built-in equipment and any necessary enclosures
or structures to house them, and any other items necessary for
the functioning of a particular facility as a child care and
development facility, including necessary furniture. Such term
includes books, curricular, and program materials.
``(4) Mortgage; first mortgage; mortgagee.--The term
`mortgage' means a first mortgage on real estate in fee simple,
or on the interest of either the lessor or lessee thereof under
a lease having a period of not less than 7 years to run beyond
the maturity date of the mortgage. The term `first mortgage'
means such classes of first liens as are commonly given to
secure advances (including advances during construction) on, or
the unpaid purchase price of, real estate under the laws of the
State in which the real estate is located, together with the
credit instrument or instruments (if any) secured thereby, and
any mortgage may be in the form of one or more trust mortgages
or mortgage indentures or deeds of trust, securing notes,
bonds, or other credit instruments, and, by the same instrument
or by a separate instrument, may create a security interest in
initial equipment, whether or not attached to the realty. The
term `mortgagor' has the meaning given the term in section
207(a).
``(k) Limitation on Insurance Authority.--
``(1) Termination.--No mortgage may be insured under this
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