(e) The State Department of Social Services shall provide input regarding program priorities that shall be considered in the funding of applications by the department. These priorities shall include, but are not limited to, the following:

1. (1) Geographic priorities based on the extent of need for child care and development and preschool supply-building efforts in different parts of the state.

   1. (A) Not less than 30 percent of the loan guarantee and direct loan obligations shall benefit providers located in rural areas, as defined in subparagraph (B). If the amount of qualified applications from rural providers is insufficient to satisfy this requirement, the excess capacity reserved for rural providers may be made available to other qualified applications according to the policies and procedures of the department. The remaining 70 percent of funds shall be available to rural or urban areas and other priorities in accordance with this subdivision.
   2. (B) For purposes of subdivision (a), rural communities are defined by any county with fewer than 400 residents per square mile.
2. (2) Age priorities based on the extent of need for child care and development or preschool supply-building efforts for children of different age groups.
3. (3) Income priorities shall include families transitioning to work or other lower income families. For purposes of this section, “lower income” shall have the same meaning as “income eligible” as set forth in Section 10271.5.
4. (4) Program priorities based on the extent of facilities needs among specific kinds of providers, including those that contract to administer state and federally funded child care and development or preschool programs administered by the State Department of Social Services or the State Department of Education, providers who have lost classrooms due to class size reduction or other state or local initiatives, or providers that need to expand to meet the needs of a child care or preschool initiative for recipients of aid under Chapter 3 (commencing with Section 11200) of Part 3, or any successor program.

(h)

1. (1) The department shall adopt regulations to efficiently and effectively implement the microenterprise loan program described in this subdivision, including, but not limited to, the following:

   1. (A) Making loans available from the Child Care and Development Facilities Direct Loan Fund to local microenterprise loan funds and other lenders who may relend the funds in appropriate amounts to eligible small family child care home providers described in Section 1597.44 of the Health and Safety Code, large family child care home providers described in Section 1597.465 of the Health and Safety Code, licensed child care and development facilities, and preschool facilities that serve up to 35 children.
   2. (B) Authorizing a specified amount of guarantees of small loans by local microenterprise loan funds and other lenders serving eligible small family child care home providers described in Section 1597.44 of the Health and Safety Code, large family child care home providers described in Section 1597.465 of the Health and Safety Code, licensed child care and development facilities, and preschool facilities that serve up to 35 children.
2. (2) Notwithstanding anything to the contrary in this section or Section 10305, a loan made pursuant to this subdivision shall not be made for less than five thousand dollars ($5,000) or for more than fifty thousand dollars ($50,000) and shall not be subject to the 75-percent investment restriction contained in paragraph (2) of subdivision (e) of Section 10305.