New Mexico
Register / Volume XXXV, Issue 24 / December 23, 2024
TITLE 8 SOCIAL SERVICES
CHAPTER 9 EARLY CHILDHOOD EDUCATION AND CARE
PART 9 REQUIREMENTS
GOVERNING THE CHILD CARE FACILITY LOAN ACT
8.9.3.1 ISSUING
AGENCY: Early Childhood Education and
Care Department (ECECD).
[8.16.9.1
NMAC - Rp, 8.9.9.1 NMAC, 12/23/2024]
8.9.9.2 SCOPE: The Child Care Facility Loan Act fund program
regulations shall apply to the use of funds by eligible applicants available
pursuant to the Child Care Facility Loan Act, Sections 24-24-1 to 24-24-4 NMSA
1978.
[8.16.3.2
NMAC - Rp, 8.9.9.2 NMAC, 12/23/2024]
8.9.9.3 STATUTORY
AUTHORITY: The regulations (rules) set forth herein,
have been promulgated by the secretary of the New Mexico Early Childhood
Education and Care Department, by authority of the Early Childhood Education
and Care Department Act, Sections 9-29-1 to 9-29-13 NMSA 1978, and the Child
Care Facility Loan Act, Sections 24-24-1 to 24-24-4 NMSA 1978, in conjunction
with the New Mexico Finance Authority.
[8.16.3.3 NMAC – Rp, 8.9.9.3 NMAC, 12/23/2024]
8.9.9.4 DURATION: Permanent.
[8.16.3.4
NMAC - Rp, 8.9.9.4 NMAC, 12/23/2024]
8.9.9.5 EFFECTIVE
DATE:
December 23, 2024, unless a later date is
cited at the end of a section.
[8.16.3.5
NMAC - Rp, 8.9.9.5 NMAC, 12/23/2024]
8.9.9.6 OBJECTIVE:
A. The objective of 8.16.3 NMAC is to establish standards and
procedures for administering loans under the Child Care Facility Loan Act. The
Child Care Facility Loan Act directs the Early Childhood Education and Care
Department (the Department) in conjunction with the New Mexico Finance
Authority (the Authority) to adopt rules to administer and implement the Child
Care Facility Loan Act.
B. The Child Care Facility Loan Act creates the child care
facility revolving loan fund to provide long-term, low-interest funding for
loans to providers to make health and safety improvements and for operating
capital to maintain adequate and appropriate environments for their clients.
C. These rules establish eligibility guidelines, loan
application requirements and evaluation procedures for loan applications. The
authority will adopt a separate policy governing the structuring and parameters
(including interest rates and terms), and financial monitoring of loans from
the child care facility revolving loan fund.
[8.16.3.6
NMAC - Rp, 8.9.9.6 NMAC, 12/23/2024]
8.9.9.7 DEFINITIONS:
A. “Act” means the Child Care Facilities Loan Act
(Sections 24-24-1 to 24-24-4 NMSA 1978).
B. “Agreement” means the document or documents signed
by the Authority and the eligible applicant that specifies the terms and
conditions of a loan provided under the program.
C. “Applicant” means a provider which has filed an
application for a loan with the department and the authority.
D. “Application” means a written document filed with
the Department and the Authority by an applicant for the purpose of obtaining a
loan. An application may include a form prescribed by the department and the
authority, written responses to requests for information by the department and
the authority, or another format as determined by the department and the
authority.
E. “Authority” means the New Mexico Finance Authority.
F. “Authorized representative” means one or more
individuals authorized by the governing body of an applicant to act on behalf
of the applicant in connection with its application. An authorized representative may act on
behalf of the applicant to the extent provided by law.
G. “Board” means the New Mexico Finance Authority
Board of Directors as created by the New Mexico Finance Authority Act, Sections
6-21-1 to 6-21-31 NMSA 1978.
H. “Department” means the New Mexico Early Childhood
Education and Care Department.
I. “Facility” means a child care facility operated by
a provider, including both family home-based and center-based programs,
licensed by the department to provide care to infants, toddlers, and children.
J. “Fund” means the child care facility revolving
loan fund held by the authority pursuant to the act.
K. “Loan” means a loan from the fund.
L. “Operating Capital” means funds needed to meet
short-term obligations, such as accounts payable, wages, debt servicing, lease
and income tax payments.
M. “Project” means health and safety improvements to a
child care facility, including physical improvement, repair, maintenance,
expansion and operation of a child care facility providing a healthy and safe
teaching environment.
N. “Provider” means a person licensed by the department
to provide child care to infants, toddlers and children pursuant to 8.9.4 NMAC.
O. “Rules” means these Child Care Facility Loan Act
fund program regulations.
[8.16.3.7
NMAC - Rp, 8.9.9.7 NMAC, 12/23/2024]
8.9.9.8 ELIGIBILITY
GUIDELINES FOR APPLICANTS AND PROJECTS:
A. An applicant is considered eligible if they
meet the following eligibility requirements:
(1) is a provider as defined by the act and these
rules; and is
(2) is verified as in good standing regarding its
licensure by the department; and
(3) complies with all applicable federal, state
and local laws and regulations.
B. A project is considered eligible if it meets
the following eligibility requirements:
(1) is owned by an eligible applicant; and
(2) the project involves the physical
improvement, repair, maintenance, expansion or operation of a facility, as
defined by the act and these rules; and
(3) involves a facility licensed by the
department under 8.9.4.11 NMAC; and
(4) is verified as supporting healthy and safe
teaching environments by the department.
C. The department may give priority to eligible
applicants that have facilities serving a proportionately high number of
state-subsidized clients and low-income families (by statute, this factor has
priority over all others) or based on other programmatic factors determined at
discretion of the department.
[8.16.3.8
NMAC - Rp, 8.9.9.8 NMAC, 12/23/2024]
8.9.9.9 LOAN
APPLICATION PROCEDURES:
A. Contingent
upon a sufficient balance in the fund, the department and the authority will
accept applications and award loans
B. The department and the authority will provide
applications. Complete applications must be signed by an authorized
representative of the provider. Only applications that are complete will be
considered for a loan. The application shall include the following:
(1) evidence of the eligibility of the applicant and the
project;
(2) proof of applicable licenses and certifications for
the provider and the facility; and
(3) a detailed description of the circumstances that
demonstrate the impact of the project, including a description of the need for
child care services in the community in which the project is located, including
data on licensed capacity and capacity to serve eligible children in the
community.
(4) a description of how the project will benefit the
health and safety of provider’s clients; and provider's clients, the quality of
the provider’s program, or the operation of the facility; and number of state subsidized and low-income families total number of clients
served;
(5) information on the current and proposed services of
the applicant to state-subsidized clients and low-income families.
(6) a detailed description of the project to be financed,
including:
(a) a description of the scope of work of the project;
(b) the estimated cost of the project;
(c) the target date for the initiation of the project and the estimated
time to completion; and
(d) the estimated useful life of the project and selected components;
(7) a copy of the applicant's formation and governance
documents (e.g., articles of incorporation and bylaws) identification of the
source funds to complete the project if the loan requested is not sufficient to
cover the full cost of the project;
(8) identification of the source of funds for repayment of
the loan and the source of funds to operate and maintain the project over its
useful life;
(9) the applicant's financial reports for the most recent
three years and federal and state tax returns;
(10) the applicant’s projected cash flows for at least 3
years;
(11) the applicant’s business plan;
(12) the written assurance that the project is allowed by
the owner of the facility, if the owner is not the applicant;
(13) any existing licenses or certifications that pertain
to the business;
(14) any insurance documents pertaining to the business;
and
(15) any additional information as requested by the
department or authority.
[8.16.3.9 NMAC - Rp, 8.9.9.9
NMAC, 12/23/2024]
8.9.9.10 EVALUATION OF APPLICANT AND PROJECT:
A. Evaluations and determinations by
department.
(1) Once an application is complete, the department will evaluate the applicant
and the proposed project for eligibility and make a
determination as to eligibility.
(2) If the department determines that an applicant is eligible, the
department will determine the programmatic priority for each application.
(3) Upon completion of its evaluation of eligibility and determination of
programmatic priority, the department will refer the applications to the
authority.
B. Financing approval by the authority.
(1) Staff at the authority will perform an independent analysis of the
financial feasibility of each application for a loan. In evaluating an
application, staff of the authority will consider:
(a) the ability of the eligible applicant to secure financing from other
sources;
(b) the terms of any other sources of funding;
(c) the applicant’s ability to repay the loan; and
(d) the applicant’s ability and agreement to satisfy any other requirements
for approval of the loan as the authority requires by its policy or otherwise.
(2) Restrictions on loans:
(a) No more than twenty percent of the fund may be loaned to a single
provider in a single project.
(b) Loans from the fund are to be made at an interest rate greater than
zero.
(c) Loans from the fund are to be made for a term that does not exceed the
useful life of the project being financed.
C. Approval by the authority. Staff of
the authority may recommend applications for approval to the board. The board may approve all or part of any
application recommended or may disapprove the application and deny funding at
its sole discretion.
[8.16.3.10 NMAC - Rp, 8.9.9.10 NMAC, 12/23/2024]
8.9.9.11 RECONSIDERATION OF DECISIONS BY DEPARTMENT
AND THE AUTHORITY:
A. Decision by department as to eligibility. An applicant may request reconsideration of a
contrary decision by the department as to whether it is an eligible applicant
under these regulations. Notice must be
given to the department in writing within ten working days of receipt of the
department's decision as to eligibility.
A request for reconsideration not timely or
properly made will be barred. The
department’s secretary or designee will promptly
review each timely request for reconsideration.
The decision of the department secretary or designee as to eligibility
is final.
B. Decision by the authority as to financing. An applicant may request
reconsideration of a decision by the authority denying a loan to an applicant
by notifying the chief executive officer of the authority in
writing within fifteen days of the date on which notice of an adverse decision
is given by the authority to an applicant.
The authority's chief executive officer will promptly review each timely
request for reconsideration. The
authority’s chief executive officer will either consider the request for reconsideration
or reject the appeal. The authority’s
chief executive officer will provide the applicant
written notice of the rejection of a request for reconsideration within five
business days following such decision.
An applicant may appeal the authority’s chief executive officer’s
decision by submitting a notice of appeal to the authority’s board within 10
business days following receipt of the notice of that decision, which notice of
appeal must include any reasons and documentation supporting the applicant’s
position. An applicant’s appeal to the
authority’s board will be considered by the authority’s board at its next
regular meeting. The decision of the
authority’s board is final.
[8.16.3.11
NMAC - Rp, 8.9.9.11 NMAC, 12/23/2024]
8.9.9.12 LOAN AGREEMENTS:
A. The authority and the eligible applicant will enter into an agreement
and any other applicable documentation to establish the terms and conditions of
the loan from the authority. The
agreement will include the terms of repayment and sanctions available to the
authority in the event of a default.
C. The agreement will contain a provision that the eligible
applicant agrees that any contract or subcontract executed for the completion
of any project shall contain a provision that there shall be no discrimination
against any employee or applicant for employment because of race, color, creed,
sex, religion, sexual preference, ancestry or national origin. The authority shall not be responsible for
monitoring the contracts or subcontracts for inclusion of that provision or
compliance with it.
D. The authority will monitor the financial covenants of the agreement and
will enforce all terms and conditions thereof, including prompt notice and
collection. The authority will take
actions as necessary to ensure loan repayment and the integrity of the fund.
E. The department will monitor the performance of an eligible applicant
under department licensure requirements and for programmatic requirements and
will make the necessary site visits. The
authority will not monitor the performance of an eligible applicant under
department licensure requirements nor for programmatic requirements and will
not make site visits. The authority will
not be responsible for any act or omission of the applicant upon which any
claim, by or on behalf of any person, firm, corporation or other legal entity,
may be made, arising from the loan or any establishment or modification of the
project or otherwise. The department
will promptly notify the authority if a loan recipient falls out of compliance
with any licensure or programmatic requirements.
F. In the event the loan recipient defaults, the authority may enforce its
rights by suit or mandamus and may utilize all other available remedies under
state and federal law.
G. If an eligible applicant that has received a loan ceases to maintain
its provider status or ceases to provide child care to infants, toddlers and
children, the state shall have the following remedies available to it:
(1) the acceleration of the loan requiring the immediate repayment of all
amounts due, including all accrued and unpaid interest;
(2) any other remedies available at law or in equity.
[8.16.3.12
NMAC - Rp, 8.9.9.12 NMAC, 12/23/2024]
8.9.9.13 ADMINISTRATION OF THE FUND:
A. The
fund is created in the authority consisting of appropriations, gifts, grants
and donations to the fund, which shall be invested as provided in the New
Mexico Finance Authority Act.
B. Money in the fund shall not revert.
C. Administrative costs of the authority may be paid from the fund.
D. The fund shall be administered by the authority as a separate account, but may consist of such sub-accounts as the
authority deems necessary to carry out the purposes of the fund.
E. Money from repayments of loans or payments on securities held by the
authority for projects authorized specifically by law shall be deposited in the
fund. The fund shall also consist of any other money appropriated, distributed
or otherwise allocated to the fund for the purpose of financing projects
authorized specifically by law.
[8.16.3.13
NMAC - Rp, 8.9.9.13 NMAC, 12/23/2024]
HISTORY OF
8.16.3 NMAC:
History of Repealed Material:
8.16.3 NMAC, Requirements
Governing the Child Care Facility Loan Act, filed 2/15/2005 - Repealed
effective 10/17/2005.
8.16.3 NMAC, Requirements
Governing the Child Care Facility Loan Act, filed 10/3/2005 - Repealed
effective 9/14/2007.
8.16.3 NMAC, Requirements
Governing the Child Care Facility Loan Act, filed 10/3/2005 - Repealed
effective 12/23/2024.