New Mexico
Register / Volume XXXVI, Issue 16 / August 26, 2025
This is an amendment to 8.9.9 NMAC, Section 6 through
12 effective 8/26/2025.
8.9.9.6 OBJECTIVE:
A. The objective of [8.16.3] 8.9.9 NMAC is to
establish standards and procedures for administering loans under the Child Care
Facility Loan Act. The Child Care
Facility Loan Act directs the early childhood education and care department
(the department) in conjunction with the New Mexico finance authority (the
authority) to adopt rules to administer and implement the Child Care Facility
Loan Act.
B. The Child Care Facility Loan Act creates the child care
facility revolving loan fund in the authority to provide long-term,
low-interest funding for loans to providers to make health and safety
improvements in their facilities, expand their facilities, create new
facilities, [and] for operating capital [to maintain adequate and
appropriate environments for their clients.], and to contract with the
department for the provision of services to repay the loan. The purpose of act is to support the physical
improvement, repair, safety and maintenance of licensed child care facilities
throughout New Mexico to ensure the availability of healthy and safe teaching
environments.
C. These rules establish eligibility guidelines, loan
application requirements and evaluation procedures for loan applications. The authority will adopt a separate policy
governing the structuring and parameters (including interest rates and terms),
and financial monitoring of loans from the child care facility revolving loan
fund.
[8.16.3.6
NMAC - Rp, 8.9.9.6 NMAC, 12/23/2024; A, 8/26/2025]
8.9.9.7 DEFINITIONS:
A. “Act” means the Child Care Facilities Loan Act
(Sections 24-24-1 to 24-24-4 NMSA 1978).
B. “Agreement” means the document or documents signed
by the Authority and the eligible applicant that specifies the terms and
conditions of a loan provided under the program.
C. “Applicant” means a private provider [which],
who is not governed, owned, or managed by a federal, state, or local
government entity (including school districts and charter schools) and has
filed an application for a loan with the department and the authority.
D. “Application” means a written document filed with
the department and the authority by an applicant for the purpose of obtaining a
loan. An application may include a form
prescribed by the department and the authority, written responses to requests
for information by the department and the authority, or another format as
determined by the department and the authority.
E. “Authority” means the New Mexico finance authority.
F. “Authorized representative” means one or more
individuals authorized by the governing body of an applicant to act on behalf
of the applicant in connection with its application. An authorized representative may act on
behalf of the applicant to the extent provided by law.
G. “Board” means the New Mexico finance authority
board of directors as created by the New Mexico Finance Authority Act, Sections
6-21-1 to 6-21-31 NMSA 1978.
H. "Contract for services"
means an agreement between the authority, the department, and an eligible child
care provider in which the provider must meet the following criteria:
(1) be located in
a child care desert;
(2) provide care during non-traditional
hours;
(3) at least fifty percent of the children
served are on child care assistance; and
(4) the number of children served at the
facility has increased by at least ten percent since loan closing.
Once ECECD verifies that a borrower has met all the above requirements
for Contracts for Services, NMFA will abate a predetermined amount of the
original loan and modify the debt service schedule accordingly.
[H.] I. “Department” means the New Mexico early
childhood education and care department.
J. “Entity” means privately
owned child care facility, or one owned and managed by a non-profit
organization as defined by the United States internal revenue service. This does not include any child care facility
owned or managed by a state or local government (including school districts and
charter schools). Child care facilities
located on tribal lands and managed by tribal governments are considered
entities for purposes of these regulations.
[I.] K. “Facility” means a child care
facility operated by a provider, including both family home-based and
center-based programs, licensed by the department to provide care to infants,
toddlers, and children.
[J.] L. “Fund” means the child care facility
revolving loan fund held by the authority pursuant to the act.
[K.] M. “Loan” means a loan from the fund.
[L.] N. “Operating capital” means funds needed
to meet short-term obligations, such as accounts payable, wages, debt
servicing, lease and income tax payments in relation to the creation or
expansion of a child care facility and provider services.
[M.] O. “Project” means health and safety
improvements to a child care facility, including physical improvement, repair, maintenance, expansion and operation
of a child care facility
providing a healthy
and safe teaching environment,
the creation of a new child care facility, or the receipt of operating capital
as provided for in these regulations and the act.
[N.] P. “Provider” means a person, entity or
employer licensed by the department to provide child care to infants,
toddlers and children pursuant to 8.9.4 NMAC, or in receipt of a provisional
loan license as set forth in these regulations.
Federal, state, and local government entities (including school
districts and charter schools) are not considered “providers” for purposes of
these regulations other than entities governed, owned, or managed by tribal
entities located in New Mexico.
Q. “Provisional loan license”
means a license provided for by the department, through its licensing division,
to a proposed or renovated child care facility seeking a loan provided for in
these regulations and the act. A
provisional loan license is only applicable for purposes of the act and these
regulations.
[O.] R. “Rules” means these Child Care
Facility Loan Act fund program regulations.
[8.16.3.7
NMAC - Rp, 8.9.9.7 NMAC, 12/23/2024; A, 8/26/2025]
8.9.9.8 ELIGIBILITY
GUIDELINES FOR APPLICANTS AND PROJECTS:
A. An applicant is considered eligible if they
meet the following eligibility requirements:
(1) is a provider as defined by the act and these
rules; and is
(2) is verified as in good standing regarding its
licensure by the department; and
(3) complies with all applicable federal, state
and local laws and regulations.
B. A project is considered eligible if it meets
the following eligibility requirements:
(1) is owned by an eligible applicant; and
(2) the project involves the physical
improvement, repair, maintenance, expansion or operation of a facility, the
creation of a new child care
facility that has received a provisional loan license from the department, or
has applied for operating capital, as defined by the act and these rules; and
(3) involves a facility licensed by the
department under 8.9.4.11 NMAC; or in
receipt of a provisional loan license as set forth in these rules; and,
(4) is verified as supporting healthy and safe
teaching environments by the department.
C. The department may give priority to eligible
applicants that have facilities serving a proportionately high number of
state-subsidized clients and low-income families [(by statute, this factor
has priority over all others)]that
are located in communities with high poverty rates and that provide
nontraditional-hour child care or based on other programmatic factors determined
at discretion of the department.
[8.16.3.8
NMAC - Rp, 8.9.9.8 NMAC, 12/23/2024; A, 8/26/2025]
8.9.9.9 LOAN
APPLICATION PROCEDURES:
A. Contingent
upon a sufficient balance in the fund, the department and the authority will
accept applications and award loans
B. The
department and the authority will provide applications. Complete applications must be signed by an
authorized representative of the provider.
Only applications that are complete will be considered for a loan. The
application shall include the following:
(1) evidence
of the eligibility of the applicant and the project;
(2) proof of applicable licenses, including a
provisional loan license, and certifications for the provider and the
facility; and
(3) a
detailed description of the circumstances that demonstrate the impact of the
project, including a description of the need for child care services in the
community in which the project is located, including data on licensed capacity
and capacity to serve eligible children in the community.
(4) a
description of how the project will benefit the health and safety of provider’s
clients; [and provider's clients,] the quality of the provider’s program,
or the operation of the facility; and number of state subsidized
and low-income families and total number of clients served;
(5) information on the current and proposed services of
the applicant to state-subsidized clients and low-income families.
(6) a detailed description of the project to be financed,
including:
(a) a description of the scope of work
of the project;
(b) the estimated cost of the project;
(c) the target date for the initiation of the project and the estimated
time to completion; and
(d) the estimated useful life of the project and selected components;
(7) a copy of the applicant's formation and governance
documents (e.g., articles of incorporation and bylaws) [identification of
the source funds to complete the project if the loan requested is not
sufficient to cover the full cost of the project];
(8) identification of the source funds to complete the project
if the loan requested is not sufficient to cover the full cost of the project;
[(8)]
(9) identification of the
source of funds for repayment of the loan and the source of funds to operate
and maintain the project over its useful life;
[(9)]
(10) the
applicant's financial reports for the most recent three years and federal and
state tax returns;
[(10)] (11) the applicant’s projected cash
flows for at least [3] three years;
[(11)]
(12) the
applicant’s business plan;
[(12)] (13) the written assurance that the
project is allowed by the owner of the facility, if the owner is not the
applicant;
[(13)] (14) any existing licenses or
certifications that pertain to the business;
[(14)]
(15) any
insurance documents pertaining to the business; [and]
[(15)]
(16) a request
for a provisional loan license from the department for proposed facilities or
new construction;
(17) The department and the
authority may contract for services with an eligible provider to provide child
care as reasonably adequate legal consideration for money from the fund if the
provider, during the course of the loan, meets the
following criteria:
(a) be located in a designated child care desert;
(b) provides care during
non-traditional hours;
(c) demonstrates that at least fifty
percent of the children that the provider or employer serves are recipients of
a child care assistance program expanded or created by the provider;
(d) demonstrate that the number of
children served by the provider increased by at least ten percent; and
(e) satisfies other qualifications as
determined by the department and the authority as set forth in the agreement;
and
(18) any additional information as requested by the department or
authority.
[8.16.3.9 NMAC - Rp, 8.9.9.9
NMAC, 12/23/2024; A, 8/26/2025]
8.9.9.10 EVALUATION OF APPLICANT AND PROJECT:
A. Evaluations and determinations by
department.
(1) Once an application is complete, the department will evaluate the
applicant and the proposed project for eligibility and make a
determination as to eligibility.
(2) If the department determines that an applicant
is eligible, including whether to issue a provisional loan license, the department will determine the
programmatic priority for each application.
(3) Upon completion of its evaluation of eligibility and determination of
programmatic priority, the department will refer the applications to the
authority.
B. Financing approval by the authority.
(1) Staff at the authority will perform an independent analysis of the
financial feasibility of each application as determined by the authority in
its policy. [for a loan. In
evaluating an application, staff of the authority will consider:
(a) the ability of the eligible applicant to secure
financing from other sources;
(b) the terms of any other sources of funding;
(c) the applicant’s ability to repay the loan; and
(d) the applicant’s ability and agreement to satisfy any
other requirements for approval of the loan as the authority requires by its
policy or otherwise.]
(2) Restrictions on loans:
(a) No more than twenty percent of the fund may be loaned to a single
provider in a single project.
(b) Loans from the fund are to be made at an interest rate greater than
zero.
(c) Loans from the fund are to be made
for a term that does not exceed the useful life of the project being financed.
C. Approval by the authority. Staff of the authority may recommend
applications for approval to the board.
The board may approve all or part of any application recommended or may disapprove
the application and deny funding at its sole discretion.
[8.16.3.10 NMAC - Rp, 8.9.9.10 NMAC, 12/23/2024; A,
8/26/2025]
8.9.9.11 RECONSIDERATION OF DECISIONS BY DEPARTMENT
AND THE AUTHORITY:
A. Decision by department as to eligibility. An applicant may request reconsideration of a
contrary decision by the department as to whether it is an eligible applicant
under these regulations. Notice must be
given to the department in writing within ten working days of receipt of the
department's decision as to eligibility.
A request for reconsideration not timely or
properly made will be barred. The
department’s secretary or designee will promptly review each timely request for
reconsideration. The decision of the
department secretary or designee as to eligibility is final.
B. Decision by the authority as to financing. An applicant may request reconsideration of a
decision by the authority denying a loan to an applicant by notifying the chief
executive officer of the authority in writing within fifteen days of the date
on which notice of an adverse decision is given by the authority to an
applicant. The authority's chief
executive officer will promptly review each timely request for reconsideration. The authority’s chief executive officer will
either consider the request for reconsideration or reject the appeal. The authority’s chief executive officer will
provide the applicant written notice of the rejection of a request for
reconsideration within five business days following such decision. An applicant may appeal the authority’s chief
executive officer’s decision by submitting a notice of appeal to the
authority’s board within [10] ten business days following receipt
of the notice of that decision, which notice of appeal must include any reasons
and documentation supporting the applicant’s position. An applicant’s appeal to the authority’s
board will be considered by the authority’s board at its next regular
meeting. The decision of the authority’s
board is final.
[8.16.3.11
NMAC - Rp, 8.9.9.11 NMAC, 12/23/2024; A, 8/26/2025]
8.9.9.12 LOAN AGREEMENTS:
A. The authority and the eligible applicant will enter into an agreement
and any other applicable documentation to establish the terms and conditions of
the loan from the authority. The
agreement will include the terms of repayment and sanctions available to the
authority in the event of a default.
C. The agreement will contain a provision that the eligible
applicant agrees that any contract or subcontract executed for the completion
of any project shall contain a provision that there shall be no discrimination
against any employee or applicant for employment because of race, color, creed,
sex, religion, sexual preference, ancestry or national origin. The authority shall not be responsible for
monitoring the contracts or subcontracts for inclusion of that provision or
compliance with it.
D. The authority will monitor the financial and reporting covenants
of the agreement and will enforce all terms and conditions thereof, including
prompt notice and collection. The
authority will take actions as necessary to ensure loan repayment and the
integrity of the fund.
E. The department will monitor the performance of an
eligible applicant under department licensure requirements and for programmatic
requirements and will make the necessary site visits. The authority will not monitor the
performance of an eligible applicant under department licensure requirements
nor for programmatic requirements and will not make site visits. The authority will not be responsible for any
act or omission of the applicant upon which any claim, by or on behalf of any
person, firm, corporation or other legal entity, may be made, arising from the
loan or any establishment or modification of the project or otherwise. The department will monitor any approved
applicants who are on a contract for services to determine if the approved
applicant is complying with all requirements of the contract for services. The department will promptly notify the
authority if a loan recipient falls out of compliance with any licensure or
programmatic requirements.
F. In the event the loan recipient defaults, the
authority may enforce its rights by suit or mandamus and may utilize all other
available remedies under state and federal law.
G. If an eligible applicant that has received a loan ceases
to maintain its provider status or ceases to provide child care to infants,
toddlers and children, the state shall have the following remedies available to
it:
(1) the acceleration of the loan
requiring the immediate repayment of all amounts due, including all accrued and
unpaid interest;
(2) any other remedies available at
law or in equity.
[8.16.3.12
NMAC - Rp, 8.9.9.12 NMAC, 12/23/2024; A, 8/26/2025]