MISSISSIPPI LEGISLATURE

1999 Regular Session

To: Economic Dev, Tourism and Parks; Finance

By: Senator(s) Simmons, Walls, Dearing, Horhn, Furniss

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. This act may be cited as the Economic Development Act of 1999.

SECTION 2. Sections 2 through 13 of this act may be cited as the Child Day Care Loan Guarantee Act of 1999.

SECTION 3. The purpose of this act is to encourage lenders to make loans available to child day care providers for the purpose of financing the development and expansion of child day care centers in less developed counties of the state and to increase the quality and availability of child day care and employment opportunities in these areas.

SECTION 4. As used in this act:

(a) "DECD" means the Department of Economic and Community Development.

(b) "Designated entity" means an entity designated to administer the Child Day Care Loan Guarantee Fund pursuant to Section 6 of this act.

(c) "Child day care provider" means a person providing or planning to provide child day care.

(d) "Less developed counties" means those counties designated as less developed as provided for in Section 57-73-21, Mississippi Code of 1972.

(e) "Fund" means the Child Day Care Loan Guarantee Fund.

SECTION 5. There is created in the State Treasury a special fund to be known as the "Child Day Care Loan Guarantee Fund," into which shall be deposited such money as the Legislature may provide by appropriation and any other money received by DECD for the purposes of this act from any other source. Money in the fund shall be used to guarantee loans made by lenders to qualifying child day care providers to finance the development or expansion of child day care centers in less developed counties. The fund shall be administered by DECD or a designated entity and money in the fund shall be expended upon appropriation by the Legislature. Unexpended amounts remaining in the fund at the end of the state fiscal year shall not lapse into the State General Fund, and any interest earned on amount in the fund shall be deposited to the credit of the fund.

SECTION 6. DECD shall:

(a) Administer the fund or designate an appropriate entity to administer the fund.

(b) Develop a loan approval process and such process shall be managed in accordance with the policies DECD establishes.

(c) Monitor projects to ensure compliance with applicable state and federal laws, rules and relevant court decisions.

(d) Develop procedures for managing defaults and for enforcing the obligations of borrowers to repay loans.

SECTION 7. In making loan guarantees under this act, DECD or the designated entity shall give priority to child day care providers that serve or intend to serve less developed counties that demonstrate the greatest need for child day care services. DECD or the designated entity shall attempt to distribute the loan guarantees geographically among less developed counties.

SECTION 8. Loans that are eligible for guarantees under this act may be made only for the following reasons:

(a) The construction, purchase, lease or improvement of buildings or other facilities.

(b) The purchase or improvement of land.

(c) The purchase or lease of equipment, including vehicles.

(d) Start-up and operation costs.

(e) Initial operating expenses.

SECTION 9. Loan guarantees under this act shall be subject to the following restrictions:

(a) A loan guarantee shall not be granted in an amount greater than Seventy-five Thousand Dollars ($75,000.00).

(b) Not more than eighty percent (80%) of a loan shall be guaranteed.

(c) The aggregate amount of loan guarantees issued pursuant to this act shall not exceed five (5) times the amount deposited in the fund.

SECTION 10. In determining whether to grant a loan guarantee to a child day care provider who has a history of operating or owning a child day care center DECD or the designated entity shall use the following criteria:

(a) Quality of programming and staff.

(b) Ratio of children to staff.

(c) Quality of facilities.

(d) Quality of administrative and financial management.

(e) History of compliance with child day care licensing or registration requirements.

(f) Ability to repay.

SECTION 11. DECD shall formulate criteria to be utilized in determining whether to grant a loan guarantee to a child day care provider that does not have a history of operating or owning a child day care center.

SECTION 12. An applicant for a guarantee under this act shall supply DECD or the designated entity with the following:

(a) A detailed description of the project.

(b) A disclosure of additional funds, if any, that are available to the applicant.

(c) Information that relates to the inability of the applicant to obtain adequate financing on reasonable terms through normal lending channels, such as a letter from a lender certifying that it would not grant credit without the loan guarantee.

(d) Credit references, if available, for the applicant.

(e) A five-year projected budget.

(f) A comprehensive business plan that includes the applicant's plans in the areas of:

(i) Debt reduction;

(ii) Marketing;

(iii) Staff training;

(iv) Facility improvement; and

(v) Program improvement.

(g) Such other information as DECD may require.

SECTION 13. Upon default by a borrower, the lender, consistent with its current collections policies, shall exercise reasonable diligence in its collection efforts before the fund shall be liable for the default.

SECTION 14. Sections 14 and 15 of this act may be cited as the "Community Development Corporation Grant Act of 1999."

SECTION 15. (1) As used in this section:

(a) "Community development corporation" means a nonprofit corporation:

(i) Tax-exempt pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986;

(ii) Whose primary mission is to develop and improve low-income communities and neighborhoods through economic and related development;

(iii) Whose activities and decisions are initiated, managed and controlled by the constituents of those local communities; and

(iv) Whose primary function is to act as deal-maker and packager of opportunities to become owners, managers and producers of small businesses, affordable housing and jobs designed to produce positive cash flow and curb blight in the target community.

(b) "DECD" means the Department of Economic and Community Development.

(c) "Fund" means the Community Development Grant Fund.

(2) There is created in the State Treasury a special fund to be known as the "Community Development Grant Fund" into which shall be deposited such money as the Legislature shall provide by appropriation and any money received by DECD from any other source for the purpose of providing grants pursuant to this section. Money in the fund shall be used to provide grants to community development corporations. The fund shall be administered by DECD, and money in the fund shall be expended upon appropriation by the Legislature. Unexpended amounts remaining in the fund and the end of the state fiscal year shall not lapse into the State General Fund, and any interest earned on amounts in the fund shall be deposited to the credit of the fund.

(3) DECD shall award grants to community development corporations from the fund to support the operations and activities of community development corporations. All community development corporations shall be eligible for grants. DECD shall establish and implement performance-based criteria for determining which community development corporations shall receive a grant and the amount of grants awarded.

SECTION 16. The Department of Economic and Community Development shall establish and maintain a job recruitment, training, development, counseling, motivation and referral services program for less developed counties of this state. The focus of such program shall be to assist chronically unemployed persons in less developed counties in overcoming barriers that may block successful employment. The services provided under this program shall include, but not be limited to, the following:

(a) Recruitment for available positions;

(b) Job orientation;

(c) Job related counseling;

(d) Motivational services;

(e) Tutoring of job applicants when appropriate;

(f) Training;

(g) Job placement;

(h) Follow-up services to ensure successful employment;

(i) Referrals to social services where appropriate.

(2) The Department of Economic and Community Development may contract with a public or private entity to administer the program authorized in subsection (1) of this section.

(3) As used in this section the term "less developed counties" shall mean the counties designated as such under Section 57-73-21, Mississippi Code of 1972.

SECTION 17. Section 57-61-34, Mississippi Code of 1972, is amended as follows:

57-61-34. Notwithstanding any provision of this chapter to the contrary, the Department of Economic and Community Development shall utilize not more than Eight Million Dollars ($8,000,000.00) out of the proceeds of bonds authorized to be issued in this chapter to be made available as interest-bearing loans to municipalities or private companies to aid in the establishment of business incubation centers and the creation of new and expanding technology-based business and industry.

In exercising the power given it under this section, the department shall work in conjunction with the University Research Center * * *.

The requirements of Section 57-61-9 shall not apply to any loan made under this section. The Department of Economic and Community Development shall establish criteria and guidelines to govern loans made pursuant to this section.

SECTION 18. The following provision shall be codified as Section 51-61-45, Mississippi Code of 1972:

57-61-45. Notwithstanding any provision of this chapter to the contrary, the Department of Economic and Community Development shall utilize not more than Two Million Dollars ($2,000,000.00) out of the proceeds of bonds issued in this chapter to provide a grant to provide funds for the Community Development Grant Fund established in Section 15 of Senate Bill No. 2423, 1999 Regular Session.

The requirements of Section 57-61-9, Mississippi Code of 1972, shall not apply to the grant made under this section.

SECTION 19. This act shall take effect and be in force from and after July 1, 1999.