As used in this chapter:

Capital improvements means improvements to real property or improvements or acquisition of personal property which is depreciable under the Federal Tax Code.

Existing child care facility means that facility which holds a current license for a child care facility from the department of social and health services (DSHS) at the time of application to the child care facility fund.

New child care facility means that facility that does not hold a current license for a child care facility from the department of social and health services (DSHS) at the time of application to the child care facility fund.

Applicant means either:

(1) One or more businesses seeking to establish or cause to be established a child care facility primarily for use of the children of its employees; or

(2) A child care facility that has a written contract with one or more private sector businesses to provide child care for the employees of that business.

(3) A business, organization or person whose primary purpose is to provide child care services. Sectarian organizations are not eligible organizations.

(1) Loans that are awarded to an applicant through a lending institution can be guaranteed by the child care facility fund up to eighty percent of the loan or to a maximum of twenty-five thousand dollars. Such loan must be intended to start or expand a child care facility and be made by a state or federally regulated financial institution.

(2) The loan guarantee shall be awarded on a one-time-only basis and shall not exceed twenty-five thousand dollars.

(3) Applicants must provide sufficient collateral for funds under this section, as determined by the child care facility fund committee.

(1) Direct loans may be awarded to the applicant on a one-time-only basis and shall not exceed a maximum of one hundred thousand dollars.

(2) Repayment of the direct loan shall be made to the child care facility revolving fund.

(3) Interest rates for a direct loan may be up to prime rate, negotiated on a case-by-case basis, fixed for the life of the loan. Loan terms shall be negotiated on a case-by-case basis.

(4) Applicants must provide sufficient collateral for funds loaned under this section, as determined by the child care facility fund committee.

(5) Applicants may be charged a one-time loan origination fee.

(1) A grant may be awarded to the applicant on a one-time-only basis.

(2) A grant shall not exceed a maximum of twenty-five thousand dollars and must be matched on a dollar-for-dollar basis with cash or goods or services that would otherwise have required cash outlay and are necessary for start up or capital improvement expenses.

(3) Full repayment of a grant to the child care facility revolving fund is required if the child care facility ceases to provide child care earlier than the following time periods from the date the grant is made:

(a) Twelve months for a grant up to five thousand dollars;

(b) Twenty-four months for a grant over five thousand dollars to ten thousand dollars;

(c) Thirty-six months for a grant over ten thousand dollars to fifteen thousand dollars;

(d) Forty-eight months for a grant over fifteen thousand dollars to twenty thousand dollars;

(e) Sixty months for a grant over twenty thousand dollars to twenty-five thousand dollars.

(4) Applicants must provide sufficient collateral for funds for this section, as determined by the child care facility fund committee.

To receive child care facility funds under these provisions, an applicant must:

(1) Include with their application a copy of the required state license for child care services.

(2) Submit a plan that includes a description of:

(a) The need for a new or improved child care facility in the area to be served by the applicant;

(b) The steps to be taken to serve a reasonable number of:

(i) Handicapped children;

(ii) Sick children;

(iii) Infants;

(iv) Children requiring nighttime or weekend care;

(v) Children whose costs of care are subsidized by the government;

(c) Why financial assistance from the state is needed to start or improve the child care facility;

(d) How the guaranteed loan, direct loan, or grant will be used, and how such use will meet the described need;

(e) The child care services to be available at the facility and the capacity of the applicant to provide these services;

(f) The financial status of the applicant, including other resources available to the applicant which will ensure the viability of the facility and the availability of its described services.

Eligible activities and uses of child care facility funds include:

(1) Capital improvements for new or existing licensed child care facilities;

(2) Operating capital for new facilities which are available for a period limited to the first three months of operation.

(3) Purchase of land or buildings which enables a child care business to increase the number licensed child care slots.

Recipients shall annually for two years following the receipt of the loan guarantee, direct loan, or grant, submit to the child care facility fund committee a report on the facility and how it is meeting the child care needs for which it was intended.