Sec. OOO-1. 10 MRSA §1026-M, sub-§§1, 2 and 5, as enacted by PL 1993, c. 722, Pt. C, §1 and affected by §2, are further amended to read:
1. Established. The Regional Economic Development Revolving Loan Program, referred to in this section as the "program," is established to provide financial assistance to businesses that need assistance in order to create or retain jobs. The authority shall administer the program on behalf of participating eligible economic development corporations or entities. The Regional Economic Development Revolving Loan Program Fund, referred to in this section as the "fund," is established as a revolving fund, into which must be deposited all amounts appropriated to the program, interest earnings on the fund and any amounts repaid to the program by participating corporations. Amounts in the fund must be used by the authority for purposes authorized in this section. The authority shall reserve an amount not less than $300,000 for loans for quality child care projects and may make loans directly to those projects.
2. Eligible corporations. The fund is open to local, regional and statewide nonprofit or governmental economic development corporations or entities, capable of providing financial assistance to businesses in order to create and protect jobs and referred to in this section as "corporations." In the case of loans to quality child care projects, the authority may also provide loans directly to eligible borrowers. To be eligible for assistance from the fund:
A. A corporation must apply to the authority to participate in the fund. The application must describe the corporation and its funding sources, the region it serves, its methods and criteria for qualifying borrowers, including any targeted lending and economic development strategies, its expertise in management assistance and financing of small and emerging businesses, the method by which it will leverage funds from other sources in an amount at least equal to 2 times the amount requested from the fund and other information the authority determines necessary;
B. A corporation must have a strategy for the creation and retention of jobs, an effective small business marketing and technical assistance plan and enough expert assistance available to it to underwrite, document and service loans and assist its clients;
C. The corporation must be determined by the authority to be able to prudently and effectively administer a direct loan fund and to coordinate with other business assistance programs and employment training and social assistance programs; and
D. The corporation must propose performance measurements and goals and a process for monitoring compliance with proposed measurements and goals. The authority shall assist corporations in developing loan underwriting and administrative capacity and in portfolio monitoring and servicing and may establish one or more advisory boards or committees to assist corporations.; and
E. A child care project must apply to the authority or to a corporation and meet the eligibility criteria for a borrower.
5. Administrative costs. A corporation may not use any money disbursed from the fund by the authority for administrative expenses, but may charge a commitment fee of up to 1% and may use interest earnings not to exceed 5% of each loan annually on loans to cover reasonable administrative and, technical assistance and education costs. The authority shall review and approve a corporation's administrative expenses on an annual basis. The authority may establish by rule reasonable administrative fees for its administration of the fund.
Sec. OOO-2. 10 MRSA §1026-M, sub-§6, ¶¶A, B and C, as enacted by PL 1993, c. 722, Pt. C, §1 and affected by §2, are amended to read:
A. Loans may not exceed $200,000 to a borrower, including an affiliated entity, and approval of the authority is required for any loan in excess of $100,000. Loans for quality child care projects may not exceed $100,000 to a borrower. Loans or portions of loans to a quality child care project to be used solely for lead abatement may not exceed $5,000.
B. Loans for borrowers other than quality child care projects may not exceed 1/3 of the net new funds being provided to a borrower. Loans for quality child care projects may be for the total amount of new funds being provided to the borrower.
C. Each The authority and each corporation shall establish interest rates, amortization schedules and repayment terms for each borrower, except that loans may not bear a rate of interest greater than the prime rate of interest plus 7% or may not be for a term longer than 20 years. and:
(1) Loans to a quality child care project may not bear a rate of interest that, when added to the commitment fee and administrative and technical assistance cost, is less than 6% or exceeds the prime rate of interest; or
(2) Loans to any other eligible borrower may not bear a rate of interest greater than the prime rate of interest plus 7%.
Sec. OOO-3. 10 MRSA §1026-M, sub-§7, ¶A, as enacted by PL 1993, c. 722, Pt. C, §1 and affected by §2, is amended to read:
A. The business for which funds are requested has 50 or fewer employees or annual sales of $5,000,000 or less, and it consists of or involves at least one of the following:
(1) Advanced manufacturing technologies, such as value-added wood products and specialty fabricated metal and electronic products;
(2) Advanced information system technologies, such as telecommunications and environmental products and services;
(3) Advanced biological and natural resource technologies, such as aquaculture, agriculture and biotechnology;
(4) A business converting from defense dependency;
(5) A business significantly engaged in export of goods or services to locations outside the State;
(6) A business that dedicates significant resources to research and development activities; and
(7) Other businesses with 5 or fewer employees.; and
(8) A child care project that includes any business that, for compensation, provides a regular service of care and protection for any part of a day less than 24 hours to a child or children under 16 years of age whose parents work outside the home, attend an educational program or are otherwise unable to care for their children.
Sec. OOO-4. 10 MRSA §1026-Q is enacted to read:
§1026-Q. Early Care and Education Revolving Loan Program
1. Established. The Early Care and Education Revolving Loan Program, referred to in this section as the "program," is established to provide financial assistance to businesses providing early care and education. The authority shall administer the program, which may include direct loans to early care and education providers, as well as loans or grants by the authority to eligible economic development corporations or entities for the purpose of providing loans to early care and education providers. The Early Care and Education Revolving Loan Program Fund, referred to in this section as the "fund," is established as a revolving fund, into which must be deposited all amounts appropriated to the program, interest earnings on the fund, any amounts repaid to the program by loan recipients and funds from any other source. Amounts in the fund must be used by the authority for purposes authorized in this section.
2. Eligible corporations. The program is open to local, regional and statewide nonprofit or governmental economic development corporations or entities capable of providing financial assistance to businesses providing early child care and education. To be eligible to participate in the program:
A. A corporation must apply to the authority to participate in the program. The application must describe the corporation and its funding sources, the region it serves, its methods and criteria for qualifying borrowers, strategies in locating qualified borrowers, its expertise in management assistance and financing of early child care and education businesses, its ability to leverage funds from other sources and other information the authority determines necessary;
B. A corporation must have a strategy for the provision of marketing and technical assistance to early child care and education businesses and enough expert assistance available to underwrite, document and process loans and assist its clients; and
C. A corporation must be determined by the authority to be able to prudently and effectively administer a direct loan fund and to coordinate the administration of a loan fund with other business assistance programs and employment training and social assistance programs.
3. Disbursements from fund. If an application is approved, the authority shall determine the amount to be disbursed to the corporation, taking into account:
A. The size of the region served by the corporation and the expected demand for loan funds in that region;
B. The demand for funds from other eligible corporations in relation to the total amount available in the fund; and
C. Whether an eligible corporation serves a geographic area or segment of potential business borrowers not served by other applicants.
The authority shall allocate funds in the program considering each of the factors in this subsection and such other factors as the authority establishes by rule. The authority may reserve up to 50% of the funds appropriated for loans to be made by the authority. Funds allocated to a corporation must be disbursed directly to and retained by the eligible corporation in accordance with the contract between the corporation and the authority. Funds must be disbursed to the corporation in the form of a loan or grant. The authority may disburse fund amounts in one lump sum or periodic disbursements.
4. Contract. A corporation that has been approved for participation in the program may enter into a contract with the authority. The contract governs the administration of the program and the use of funds. The contract must provide that a corporation may disburse program funds statewide. The contract must provide that a corporation shall, at a minimum, conform to the following terms and conditions:
A. The corporation shall certify that it will use funds only for eligible purposes;
B. The corporation shall review each application for financial assistance, determine the feasibility of the application and approve or deny the application;
C. An officer or employee of the corporation or a member of its credit committee may not participate in any way in, or have any influence over, a decision on a project in which that officer, employee or member has a direct or indirect personal financial interest;
D. If the corporation breaches its contract with the authority or ceases to operate a loan program in substantial conformance with its proposal to the authority, the authority may withhold further funding and may require repayment of any undisbursed loan funds and loan repayments to the authority; and
E. Other terms and conditions as the authority determines appropriate.
5. Administrative costs. A corporation may not use any money disbursed from the fund by the authority for administrative expenses, but may charge a commitment fee on each loan of up to 1% and may use interest earnings not to exceed 5% of each loan annually to cover reasonable administrative and technical assistance costs. The authority shall review and approve a corporation's administrative expenses on an annual basis. The authority may establish by rule reasonable administrative fees for its origination of loans and administration of the fund.
6. Financing terms and conditions. Loans may be made from program funds under the following terms and conditions.
A. Loans may not exceed $100,000 to an eligible borrower, except that loans or portions of loans to be used for lead abatement may not exceed $5,000.
B. Each corporation and the authority shall establish interest rates, amortization schedules and repayment terms for each borrower, except that loans may not bear a rate of interest that, when added to the commitment fee and administrative and technical assistance cost, is less than 6% or exceeds the prime rate of interest.
C. A corporation or the authority may provide for flexible repayment terms.
D. A corporation or the authority shall require collateral for loans when available, but may subordinate to loans from other lenders.
7. Eligible borrower. A project or borrower is eligible for financial assistance under the program if the following criteria are met.
A. The business for which funds are requested must provide early child care and education services to at least 3 children who are not related to the owner of the business or any provider of early care and education services working for the borrower.
B. The borrower has insufficient access to funding for the project from other public and private sources.
C. The borrower has committed all reasonably available resources to the project, obtained financial commitment from other sources of financing and demonstrated a reasonable likelihood that the loan can be repaid.
D. In selecting child care providers to receive loan guarantees, the authority must use the following criteria:
(1) An applicant's status as a licensed or certified child care center;
(2) An applicant's interest in obtaining and ability to obtain accreditation by a nationally recognized program that utilizes recognized quality indicators for child care services that have been approved by the Office of Head Start and Child Care, including input from parents or clients or both, reviews of policies, procedures and program records and on-site program reviews;
(3) The degree of coordination with Head Start and other community programs; and
(4) The quality of the child care provider's administrative and financial management.
8. Reports. A corporation shall report at least semiannually to the authority on the projects the corporation funds and the administration of the program. The report must include a description of each borrower, the amount, type and terms of assistance each borrower received and other information the authority requires. The report must contain an accounting of the loan portfolio and any loans that are in default, as well as an accounting of the corporation's administrative and technical assistance expenses incurred and charged to the program.
9. Audit. The authority shall periodically review each corporation's participation in the program and may, at its discretion, require an independent audit at the expense of the corporation. If the authority determines that a corporation has used funds for ineligible purposes, the corporation shall repay those funds to the authority for deposit into the fund. The authority may not disburse additional funds to a corporation until the corporation has repaid the misapplied funds and has fully complied with its obligations under the contract with the authority.
10. Written procedures. The authority shall adopt rules governing the program. Rules adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter II-A.
11. Annual report. The authority shall report by the last business day of each year on the Early Care and Education Revolving Loan Program to the joint standing committee of the Legislature having jurisdiction over business and economic development matters.
Sec. OOO-5. 20-A MRSA c. 419-D is enacted to read:
CHAPTER 419-D
QUALITY CHILD CARE EDUCATION SCHOLARSHIP FUND
§11670. Quality Child Care Education Scholarship Fund
The Quality Child Care Education Scholarship Fund is created and established as a nonlapsing fund under the jurisdiction and control of the Finance Authority of Maine. All revenues credited to this fund must be distributed as scholarships based on financial need for residents of the State who are enrolled in one or more courses related to early childhood education or child development at accredited institutions of higher education. The Finance Authority of Maine shall award scholarships and adopt rules for determining eligibility, amounts, terms and conditions of scholarships. Interest earned on amounts in the fund may be used for the costs of administering the scholarships. Rules adopted pursuant to this section are routine technical rules pursuant to Title 5, chapter 375, subchapter II-A.
Sec. OOO-6. 20-A MRSA §12502, as amended by PL 1995, c. 117, Pt. E, §5 and affected by §13, is further amended to read:
§12502. Teachers for Maine Program
There is established the Teachers for Maine Program to provide financial assistance to college students, graduating high school seniors and students pursuing postbaccalaureate teacher certification or child development associate certification or an associate's degree in child development who demonstrate an interest in pursuing a career in teaching in this State for postsecondary education and to teachers for advanced degree or continued study. The program recognizes outstanding graduating high school seniors, college students and students pursuing postbaccalaureate teacher certification or child development associate certification or an associate's degree in child development. The chief executive officer shall administer the program and shall establish by rule the rates of interest or fees to be charged.
Sec. OOO-7. Appropriation. The following funds are appropriated from the General Fund to carry out the purposes of this Part.
1999-00
FINANCE AUTHORITY OF MAINE
Quality Child Care Education Scholarship Fund
All Other $150,000
Provides funds on a one-time basis to be used for scholarships under the Quality Child Care Education Scholarship Fund pursuant to the Maine Revised Statutes, Title 20-A, chapter 419-D.
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