Code of Massachusetts Regulations
606 CMR - DEPARTMENT OF EARLY EDUCATION AND CARE
Title 606 CMR 15.00 - Early Education and Out of School Time Capital Fund Program
Section 15.04 - Type of Grants, Grant Terms, Grant Conditions

Universal Citation: 606 MA Code of Regs 606.15

Current through Register 1531, September 27, 2024

(1) Grant Types. Eligible Projects may receive EEOST Grants for the following uses: the acquisition, design, construction, repair, renovation, recovery from a natural or man-made disaster, rehabilitation, or other capital improvement or deferred maintenance of an Eligible Facility. Eligible Organizations shall complete the application process in accordance with the EEOST Fund Guidelines.

(2) Grant Terms. All grants under the EEOST Capital Fund program shall be made upon the terms included in the EEOST Fund Guidelines and/or the EEOST Grant documents including, but not limited to, the Financing Commitment, as well as the following terms:

(a) Grant Proceeds. The proceeds of the EEOST Grant shall be used solely for the development of the Eligible Project, as approved by EEC or its Financial Intermediary, and as set forth in the Financing Commitment.

(b) Grant Amount. The amount of an EEOST Capital Grant Program shall be established by EEC according to the EEOST Fund Guidelines. EEC may establish a maximum percentage of the Total Development Cost and dollar limits, both by total or by category or both, to which the Grant would also be subject.

(c) Grant Period. The original term of an EEOST Grant shall be at least a minimum of 25 years for grantee-owned Eligible Facilities. The original term of an EEOST Grant shall be at least a minimum of 15 years for grantee-leased facilities, unless the building, structure or site is owned, or will be owned by a municipally controlled entity, in which event, the term of the grant would be 25 years. The EEC Commissioner may shorten the minimum grant term for Grants of less than $500,000 that will be used for projects that promote the health and safety of children and staff.

(d) Grant Recapture. If for any reason the Eligible Organization does not comply with EEC commitments and requirements, EEC or its Financial Intermediary may recapture the grant funds according to the schedules in 606 CMR 15.04(2)(d)1 and 2., except that the EEC Commissioner may modify these schedules for any shortened grant terms as authorized in 606 CMR 15.04(2)(c).
1. For properties owned by the Eligible Organization (25-year grant term):
a. if the noncompliance occurs within nine years of the making of the EEOST Grant, repayment of 100% is due;

b. if the noncompliance occurs between nine years and 16 years after the making of the EEOST Grant, repayment of 67% is due;

c. if the noncompliance occurs between 16 years and 25 years after the making of the EEOST Grant, repayment of 33% is due;

d. if the noncompliance occurs more than 25 years after the making of the EEOST Grant, the grant funds will no longer be subject to recapture.

2. For properties leased by the Eligible Organization (15-year grant term):
a. if the noncompliance occurs within five years of the making of the EEOST Grant, repayment of 100% is due;

b. if the noncompliance occurs between five years and ten years after the making of the EEOST Grant, repayment of 67% is due;

c. if the noncompliance occurs between ten years and 15 years after the making of the EEOST Grant, repayment of 33% is due;

d. if the noncompliance occurs more than 15 years after the making of the EEOST Grant, the grant funds will no longer be subject to recapture.

(e) Land Use Restriction. The Eligible Organization shall record at the appropriate Registry of Deeds or Registry District of the Land Court, or both, a Land Use Restriction. The Land Use Restriction, and the mortgage referred to in 606 CMR 15.04(2)(e)2., shall only be released:
1. at the end of the term of the Grant if all terms and conditions of the Grant have been fulfilled. However, if the Grant is voluntarily repaid in full prior to the expiration of the Grant term, the Land Use Restriction shall run with the land and remain in effect for the length of the original Grant as described in 606 CMR 15.04(2)(c); or

2. upon foreclosure of a bona fide first priority mortgage on the Eligible Facility by the holder thereof, or with EEC's consent a bona fide mortgage that was senior to the lien of the recorded Land Use Restriction and mortgage at the time of the closing, or to which the EEOST Land Use Restriction has been duly subordinated.

The EEC Commissioner may waive the requirement for a Land Use Restriction for any Grant with a shortened grant term as authorized in 606 CMR 15.04(2)(c).

(f) Mortgage Lien. The EEOST Grant shall be secured by a Mortgage Lien in favor of EEC and/or its Financial Intermediary on the fee simple title to the Eligible Facility, if owned by the Eligible Organization, or on the Eligible Organization's leasehold interest, if the Eligible Facility is leased. The mortgage shall be junior only to a bona fide first priority mortgage or such senior mortgage liens as are permitted by EEC or its Financial Intermediary. The EEC Commissioner may waive the requirement for a Mortgage Lien for any Grant with a shortened grant term as authorized in 606 CMR 15.04(2)(c).

(g) Refinancing. Refinancing of Eligible Projects completed under the EEOST Capital Fund program will be allowed if such refinancing protects the interests of the Commonwealth and either is necessary to effect extraordinary repairs or maintenance which have been approved by EEC or its Financial Intermediary or stabilizes or benefits the Eligible Project that is being refinanced, as determined by EEC or its Financial Intermediary. Any new loan must be due and payable on or after the maturity date of the EEOST Grant. All refinancing is subject to the prior written approval of EEC and/or its Financial Intermediary.

(h) Application Process. Application procedures for EEOST Grants are specified in the EEOST Guidelines. EEC reserves the right to hold competitive grant award funding rounds for EEOST Grants and set forth eligibility and scoring criteria in the EEOST Program Guidelines and other materials accompanying the Application and, if applicable, the Preapplication.

(i) Good Standing. All EEOST Grant awards will require that each Eligible Organization receiving an EEOST Grant and all programs and facilities that it operates must be licensed by EEC and have valid licenses that are in good standing with EEC and be free of any pending investigations or any pending or past legal actions including, but not limited to, Deficiency Correction Orders, Sanctions Orders, Suspension Orders, Revocation Orders, Refusal to Renew Orders, Fines, or other actions that call into question the Eligible Organization's capacity to care for children in a manner that ensures their safety. All EEOST Grant awards will also require that each Eligible Organization receiving an EEOST grant is in good financial standing with EEC and has no outstanding audit findings from EEC.

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