Section 8271 - Legal Documents(a) As a condition of receiving a direct loan, a successful applicant shall be required to enter into a loan agreement with the department or its contractor. The loan agreement shall require the applicant to execute a promissory note in favor of the department or its contractor in the principal amount of the direct loan, and to provide the loan security documents specified in the loan agreement for the benefit of the department or its contractor. The promissory note shall provide that a default under the loan agreement shall be a default under the promissory note.(b) The loan agreement shall contain the following terms and conditions: (1) Interest rate of the loan;(3) Amortization schedule;(4) Description of the project and a time frame for completion, and a provision that if the work is not completed by the completion date set forth in the construction contract, the loan will be in default unless an extension of time is given in writing by the department or its contractor;(5) Description of security for the loan;(6) Description of the documents to be provided by the applicant to secure repayment of the loan (e.g., promissory note, deed of trust, security agreement, fixture filing, UCC-1);(7) A borrower covenant to require the borrower to maintain a current, valid child care license for the facility during the term of the direct loan;(8) A borrower covenant that the borrower shall provide child care and development services of the priority type identified in the borrower's application at the facility for which the loan was made, unless the department has approved, in writing, provision of child care and development services of a different type, for the lesser of twenty (20) years or the term of the direct loan, unless the borrower is a family child care provider temporarily ceasing providing child are and development services and complying with section 8271(b)(10);(9) A borrower covenant that the borrower shall notify the department or its contractor within fourteen (14) calendar days of the cessation of child care and development services in the facility for which the direct loan was made ("cessation notice");(10) A borrower covenant for family child care provider borrowers only, that in the event the borrower: (i) ceases to provide services;(ii) retains its license; and(iii) intends to resume child care and development services, the cessation notice shall include: (i) the reasons for the interruption in services; and(ii) a date for resuming services. The borrower may amend the resumption of services date declared in the cessation notice by submitting an amended cessation notice to the lender and the department or its contractor. The covenant shall also include that any cessation of services exceeding three years from the date of the initial cessation notice shall constitute a default of the loan;(11) A requirement that the borrower maintain appropriate insurance on the facility during the term of the direct loan naming the department or its contractor as an additional loss payee and in an amount sufficient to repay the direct loan;(12) A list of the acts and omissions that shall constitute a default or breach under the loan agreement, and the department's or contractor's remedies in the event of default or breach. The submittal of information in support of an application for a direct loan which was or has become untrue, shall constitute a default or breach under the loan agreement and promissory note;(13) A borrower covenant providing that, with the exception of a family child care provider temporarily ceasing to provide services in compliance with section 8271(b)(10), failure by the borrower to continue operation of the licensed facility assisted with the direct loan for child care and development shall constitute a default or breach under the loan agreement; and(14) Any other terms or conditions required by the department or its contractor which are reasonably necessary to insure compliance of the particular facility and applicant with the requirements of this subchapter and to protect the interests of the State.Cal. Code Regs. Tit. 25, § 8271
1. New section filed 4-16-99 as an emergency; operative 4-16-99 (Register 99, No. 16). A Certificate of Compliance must be transmitted to OAL by 10-13-99 pursuant to Education Code section 8277.6 or emergency language will be repealed by operation of law on the following day.
2. New section refiled 10-1-99 as an emergency; operative 10-13-99 (Register 99, No. 40). A Certificate of Compliance must be transmitted to OAL by 2-10-2000 or emergency language will be repealed by operation of law on the following day.
3. Repealed by operation of Government Code section 11346.1(g) (Register 2000, No. 9).
4. New section filed 2-2-2001; operative 2-2-2001 pursuant to Government Code section 11343.4(c) (Register 2001, No. 5). Note: Authority cited: Section 8277.6(g), Education Code. Reference: Sections 8277.5(e), 8277.6(b) and (g), Education Code.
1. New section filed 4-16-99 as an emergency; operative 4-16-99 (Register 99, No. 16). A Certificate of Compliance must be transmitted to OAL by 10-13-99 pursuant to Education Code section 8277.6 or emergency language will be repealed by operation of law on the following day.
2. New section refiled 10-1-99 as an emergency; operative 10-13-99 (Register 99, No. 40). A Certificate of Compliance must be transmitted to OAL by 2-10-2000 or emergency language will be repealed by operation of law on the following day.
3. Repealed by operation of Government Code section 11346.1(g) (Register 2000, No. 9).
4. New section filed 2-2-2001; operative 2-2-2001 pursuant to Government Code section 11343.4(c) (Register 2001, No. 5).