S.273 - Small Business Child Care Investment Act (119th Congress)
Summary
The Small Business Child Care Investment Act (S.273) aims to allow nonprofit child care providers to participate in certain loan programs of the Small Business Administration (SBA). This bill amends the Small Business Act and the Small Business Investment Act of 1958 to include nonprofit child care providers as eligible entities for SBA loans.
The bill defines 'covered nonprofit child care provider' and sets specific eligibility criteria, including compliance with state licensing requirements, IRS 501(c)(3) status, and criminal background checks for employees and volunteers. It also prohibits the SBA from denying loans based on association with entities protected by the First Amendment and restricts the use of loan proceeds for religious activities.
Finally, the bill mandates the SBA Administrator to submit annual reports to Congress on the number and amount of loans and financings made to covered nonprofit child care providers.
Expected Effects
The likely effect of this bill is to increase access to capital for nonprofit child care providers, enabling them to expand or improve their facilities and services. This could lead to an increase in the availability of child care, potentially benefiting working families.
The bill also introduces reporting requirements for the SBA, which will provide Congress with data on the utilization of these loan programs by nonprofit child care providers. This will allow for oversight and potential adjustments to the program in the future.
However, the bill's impact is limited by the requirement for loan guarantees for loans exceeding $500,000 and the prohibition on direct lending by the SBA, which may restrict access for some providers.
Potential Benefits
- Increased access to capital for nonprofit child care providers.
- Potential expansion and improvement of child care facilities.
- Greater availability of child care services for working families.
- Support for organizations primarily engaged in providing child care for young children.
- Enhanced oversight through mandatory reporting to Congress.
Potential Disadvantages
- Requirement for loan guarantees for loans exceeding $500,000 may limit access for some providers.
- Prohibition on direct lending by the SBA may restrict access for some providers.
- Potential administrative burden for the SBA in implementing and overseeing the new loan program.
- The bill's limitations on the use of funds for religious activities may be viewed as discriminatory by some religious organizations.
- Increased government spending on loan programs.
Constitutional Alignment
The bill appears to be generally aligned with the US Constitution. It does not infringe upon individual liberties or rights, and it includes provisions to ensure that the SBA does not discriminate against organizations based on their association with entities protected by the First Amendment.
However, the bill also includes a restriction on the use of loan proceeds for religious activities, which could be interpreted as a potential infringement on the free exercise of religion under the First Amendment. This restriction is likely intended to maintain separation of church and state.
Overall, the bill's alignment with the Constitution is strong, with the exception of the potential First Amendment concerns related to the restriction on the use of funds for religious activities.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).