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Committee advances bill to expand uses and repayment options for child-care revolving loan fund
Summary
Lawmakers recommended due pass for SB175 to widen who can use the Child Care Revolving Loan Fund and to allow loans to be repaid partly through contracts for services under qualifying conditions.
A sponsor told the committee Senate Bill 175 would expand how the Child Care Revolving Loan Fund may be used and add a contract-for-services loan repayment option intended to help providers expand capacity.
"Senate bill 175 is a simple bill that expands the uses of the Child Care Revolving Loan Fund," the sponsor said. The fund, housed at the New Mexico Finance Authority, was created in 2003 to provide low-cost loans to child-care providers. The sponsor told the committee the fund has been funded only twice since creation and that a $10 million appropriation included this year remains available.
Key provisions: SB175 adds a contract-for-services repayment option that — to qualify — requires a provider to increase the number of children it serves by 10 percent and meet other eligibility criteria (for example, locating in a child-care desert or offering nontraditional hours), according to the bill language and committee discussion. The bill also expands eligibility to employers that wish to operate child-care services for employees.
Supporters included providers who described difficulty accessing capital. "Back in 02/2016, my husband, an army veteran, and I applied for a small business administration loan, which was a very complex task too that took 14 months to get approved," Ruth Porta, owner of Esperanza Preschool, said during public comment, describing private financing challenges for small providers.
Committee questions focused on the practical challenges of expanding capacity, licensing and regulatory hurdles, and which providers and projects would be selected for loans. Committee members pressed staff and experts to clarify that the contract-for-services repayment option applies only to projects that demonstrate the 10 percent expansion requirement and that both for-profit and nonprofit providers are eligible for the loan program; public facilities do not qualify.
Committee action: The committee recorded a due-pass recommendation on SB175; the clerk announced a final tally of 10 yes, 0 no.
What happens next: With committee approval the bill moves forward; the New Mexico Finance Authority and Early Childhood Education and Care partners will handle vetting and application processing if the legislation becomes law.
