Home > 105th Congressional Bills > H.R. 896 (ih) To amend section 108(q)(4) of the Housing and Community Development Act of 1974 to promote regional cooperation in proposed plans for economic development grants. ...H.R. 896 (ih) To amend section 108(q)(4) of the Housing and Community Development Act of 1974 to promote regional cooperation in proposed plans for economic development grants. ...
108th CONGRESS
1st Session
H. R. 895
To provide for the construction and renovation of child care
facilities, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 25, 2003
Mrs. McCarthy of New York introduced the following bill; which was
referred to the Committee on Financial Services
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A BILL
To provide for the construction and renovation of child care
facilities, 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 ``Child Care Construction and
Renovation Act''.
SEC. 2. USE OF COMMUNITY DEVELOPMENT BLOCK GRANTS TO ESTABLISH CHILD
CARE FACILITIES.
Section 105(a) of the Housing and Community Development Act of 1974
(42 U.S.C. 5305(a)) is amended--
(1) in paragraph (22), by striking ``and'' at the end;
(2) in paragraph (23), by striking the period at the end
and inserting a semicolon;
(3) in paragraph (24), by striking ``and'' at the end;
(4) in paragraph (25), by striking the period at the end
and inserting ``; and''; and
(5) by adding at the end the following:
``(26) the construction and renovation of child care
facilities.''.
SEC. 3. INSURANCE FOR MORTGAGES ON NEW AND REHABILITATED CHILD CARE
FACILITIES.
Title II of the National Housing Act (12 U.S.C. 1707 et seq.) is
amended by adding at the end the following:
``SEC. 257. MORTGAGE INSURANCE FOR CHILD CARE FACILITIES.
``(a) Definitions.--In this section:
``(1) Child care facility.--The term `child care
facility'--
``(A) means a public or private facility that--
``(i) has as its purpose the care and
development of--
``(I) children who are less than 16
years of age; or
``(II) school-age children and
youth during non-school hours; and
``(ii) is operated in accordance with all
applicable State and local laws and
regulations; and
``(B) does not include any facility for school-age
children that is primarily for use during normal school
hours.
``(2) Equipment.--The term `equipment' includes--
``(A) machinery, utilities, and built-in equipment,
and any necessary enclosure or structure to house them;
and
``(B) any other items necessary for the functioning
of a particular facility as a child care facility,
including necessary furniture, books, and curricular
and program materials.
``(3) First mortgage.--The term `first mortgage'--
``(A) 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
``(B) includes any mortgage in the form of 1 or
more trust mortgages or mortgage indentures or deeds of
trust, securing notes, bonds, or other credit
instruments, that, by the same instrument or by a
separate instrument, creates a security interest in
initial equipment, whether or not attached to the
realty.
``(4) Mortgage.--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.
``(5) Mortgagor.--The term `mortgagor' has the meaning
given the term in section 207(a).
``(b) Insurance of Mortgages.--In order to facilitate the
establishment and rehabilitation of child care facilities, the
Secretary may--
``(1) insure a mortgage that is secured by a property or
project that is--
``(A) a new child care facility, including a new
addition to an existing child care facility (regardless
of whether the existing facility is being
rehabilitated); or
``(B) a substantially rehabilitated child care
facility, including equipment to be used in the
operation of the facility; and
``(2) make a commitment to insure any mortgage described in
paragraph (1) before the date of execution or disbursement of
the mortgage.
``(c) Terms and Conditions.--
``(1) Eligible child care facilities.--Each mortgage
insured under this section shall be secured by a child care
facility for which a certification of compliance has been
issued by the Secretary under section 258(c) during the 12-
month period preceding the date on which the commitment to
insure the mortgage is issued under this section.
``(2) Approved mortgagor.--
``(A) In general.--Each mortgage insured under this
section shall be executed by a mortgagor approved by
the Secretary.
``(B) Regulation.--The Secretary may--
``(i) require an approved mortgagor who
executes a mortgage under subparagraph (A) to
be regulated with respect to charges and
methods of financing and, if the mortgagor is a
corporate entity, with respect to capital
structure and rate of return; and
``(ii) as an aid to the regulation of any
mortgagor under clause (i), make such contracts
with and acquire for not more than $100 such
stock or interest in such mortgagor as the
Secretary considers to be necessary.
``(C) Stock or interest.--Any stock or interest
purchased under subparagraph (B)(ii) shall be--
``(i) paid for out of the General Insurance
Fund; and
``(ii) redeemed by the mortgagor at par
upon the termination of all obligations of the
Secretary under the insurance.
``(3) Principal obligation.--Each mortgage insured under
this section shall involve a principal obligation in an amount
not to exceed 90 percent of the estimated value of the property
or project, or 95 percent of the estimated value of the
property or project in the case of a mortgagor that is a
private nonprofit corporation or association (as defined
pursuant to section 221(d)(3)), including--
``(A) equipment to be used in the operation of the
facility when the proposed improvements are completed
and the equipment is installed; or
``(B) 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.
``(4) Amortization and interest.--Each mortgage insured
under this section shall--
``(A) provide for complete amortization by periodic
payments under such terms as the Secretary shall
prescribe;
``(B) have a maturity date 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.
``(5) 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.
``(6) Mortgage insurance terms.--Subsections (d), (e), (g),
(h), (i), (j), (k), (l), and (n) of section 207 apply to any
mortgage insured under this section, except that all references
in such subsections to section 207 shall be construed, for
purposes of mortgage insurance under this section, to refer to
this section.
``(d) Mortgage Insurance for Fire Safety Equipment Loans.--
``(1) Authority.--The Secretary may, upon such terms and
conditions as the Secretary may prescribe, make commitments to
insure and insure loans made by financial institutions or other
approved mortgagees to child care 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 estimate by the Secretary 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 date 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 facility
for which a certification of compliance has been issued
by the Secretary under section 258(c) during the 12-
month period preceding the date on which the commitment to insure is
issued under this subsection.
``(3) Insurance requirements.--
``(A) Section 2.--Subsections (c), (d), and (h) of
section 2 shall apply to any loan insured under this
subsection, except that all references in such
subsections to `this section' or `this title' shall be
construed, for purposes of this subsection, to refer to
this subsection.
``(B) Section 220.--Paragraphs (5), (6), (7), (9),
and (10) of section 220(h) shall apply to any loan
insured under this subsection, except that all
references in such paragraphs to home improvement loans
shall be construed, for purposes of this subsection, to
refer to loans under this subsection.
``(e) 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.
``(f) Limitation on Insurance Authority.--
``(1) Termination.--No mortgage may be insured under this
section or section 223(h) after September 30, 2005, except
pursuant to a commitment to insure issued on or before such
date.
``(2) Aggregate principal amount limitation.--
``(A) In general.--The aggregate principal amount
of mortgages for which the Secretary enters into
commitments to insure under this section or section
223(h) on or before the date described in paragraph (1)
may not exceed $2,000,000,000.
``(B) Report.--If, on the date described in
paragraph (1), the aggregate insurance authority
provided under this paragraph has not been fully used,
the Secretary of the Treasury shall submit to Congress
a report evaluating the need for continued mortgage
insurance under this section.
``(g) Nondiscrimination Requirement.--
``(1) In general.--A child care facility receiving
assistance under this title may not discriminate on the basis
of race, color, or national origin (to the extent provided in
title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et
seq.)), religion (subject to subparagraph (B)), national
origin, sex (to the extent provided in title IX of the
Education Amendments of 1972 (20 U.S.C. 1681 et seq.)), or
disability (to the extent provided in section 504 of the
Rehabilitation Act of 1973 (29 U.S.C. 794)), under any program
or activity receiving Federal financial assistance under this
title.
``(2) Facilities of religious organizations.--The
prohibition with respect to religion under paragraph (1) shall
not apply to a child care facility that is controlled by, or
that is closely identified with, the tenets of a particular
religious organization, if the application of this paragraph
would not be consistent with the religious tenets of such
organization.
``(h) Liability Insurance.--A child care provider operating a child
care facility assisted under this section or section 223(h) shall
obtain and maintain liability insurance in such amounts and subject to
such requirements as the Secretary considers to be appropriate.
``(i) Small Purpose Loans.--
``(1) In general.--To the extent that amounts are made
available pursuant to subsection (l), the Secretary shall make
loans, directly or indirectly, to providers of child care
facilities for reconstruction or renovation of such facilities,
in accordance with this subsection.
``(2) Requirements.--A loan under this subsection--
``(A) may be made only for a child care facility
that is financially and operationally viable, as
determined under standards established by the
Secretary;
``(B) may not have a term to maturity exceeding 7
years;
``(C) shall bear interest at a rate established by
the Secretary; and
``(D) shall be subject to such other terms and
conditions as the Secretary may establish by
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