# Montgomery County Code — Part II. Local Laws, Ordinances, Resolutions, Etc.

## Chapter 10A. Child Care.

### Article 5. Child Day Care Facilities Loan Program.

**Sec. 10A-6. Purpose and objectives.**

  (a)    The Director of the Department of Health and Human Services must establish and administer a Child Day Care Facilities Loan Program.

  (b)    The purpose of the program is to increase the number of children who receive licensed day care services in Montgomery County at reasonable costs.

  (c)    The Director may loan funds to operators of child care centers or family day care homes if the funds will:

    (1)   Increase the number of children served;

    (2)   Help a center or home begin operation; or

    (3)   Keep in operation a center or home that otherwise is likely to stop operating.

**Sec. 10A-7. Eligibility.**

  (a)    The director may loan funds to nonprofit or profit-making centers or homes.

  (b)    The director must give highest priority to loans to centers or homes that serve significant percentages of low-income or handicapped children.

  (c)    The recipient of any loan must agree to provide child day care services, to an extent or in an amount set by the department, for at least the term of the loan.

**Sec. 10A-8. Uses of funds.**

  (a)    All funds loaned must be used for capital improvements that are needed to:

    (1)   Establish, or increase the capacity of, the center or home; or

    (2)   Meet licensing, zoning, building, or other government-imposed requirements.

  (b)    Eligible capital improvements include:

    (1)   Buying land or a building;

    (2)   Building, repairing or renovating all or part of a building;

    (3)   Buying furniture or equipment with a useful life of at least 3 years; and

    (4)   Fees for architects, engineers, accountants, lawyers or other professional services needed to buy, build, repair or renovate a building.

**Sec. 10A-9. Loan amounts and rates.**

  (a)    The amount loaned to any single family must not exceed $10,000.

  (b)    The director must charge an interest rate that is below prevailing commercial rates, and which reflects the county’s current cost of borrowing funds and the cost of administering the program.

  (c)    A loan made under this program may supplement a loan made or guaranteed under any other government program.

**Sec. 10A-10. Loan procedures.**

  (a)    The director must select a loan review committee to recommend the disposition of each loan application. The director must approve each loan.

  (b)    The County Executive must adopt regulations under method (2) to administer the loan program. These regulations should include:

    (1)   Lending standards and priorities;

    (2)   Interest rates, terms and conditions;

    (3)   Payment schedules, which may be granted;

    (4)   Application procedures, and ways to document need;

    (5)   Procedures for referring applicants to other sources of funds, and for cooperating with other public and private sources of funds;

    (6)   Procedures to ask the director to reconsider any denial of a loan or any decision on interest rate, terms and conditions;

    (7)   Criteria for adequate security; and

    (8)   Procedures for nonpayment or default.

**Sec. 10A-11. Revolving loan fund.**

  (a)    The Department of Finance must create and administer a revolving fund for the Child Day Care Facilities Loan Program. All appropriations and other receipts for the program must be placed in the fund, and all payments for the program must originate in the fund. The outstanding loan balance must not exceed $500,000 at any time. If at any time the assets of the fund exceed the $500,000 limit, any surplus must be returned to the General Fund.

  (b)    The Department of Finance must:

    (1)   Disburse funds and collect payments for any loan made under the program;

    (2)   Report any nonpayment or default to the Department of Health and Human Services; and

    (3)   Maintain loan records and provide an annual report to the Department of Health and Human Services.