To amend part D of title III of the Public Health Service Act to authorize grants and loan guarantees for health centers to enable the centers to fund capital needs projects, and for other purposes.

March 20, 2003

Mr. BONILLA introduced the following bill; which was referred to the Committee on Energy and Commerce

To amend part D of title III of the Public Health Service Act to authorize grants and loan guarantees for health centers to enable the centers to fund capital needs projects, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Building Better Health Centers Act of 2003'.

SEC. 2. FINDINGS.

Congress makes the following findings:

(1) Many health care experts believe that lack of access to basic health services is our Nation's single most pressing health care problem. Nearly 50,000,000 Americans do not have access to a primary care provider, whether they are insured or not. In addition, 43,000,000 Americans lack health insurance and have difficulty accessing care due to the inability to pay for such care.

(2) Health centers, including community health centers, migrant health centers, health centers for the homeless, and public housing health centers, address the health care access problem by providing primary care services in thousands of rural and urban medically-underserved communities throughout the United States.

(3) Health centers provide basic health care services to nearly 14,000,000 Americans each year, including nearly 9,000,000 minorities, 850,000 farmworkers, and 750,000 homeless individuals.

(4) Studies show that health centers provide high-quality and cost-effective health care. The average yearly cost for a health center patient is approximately $1.25 per day.

(5) One of the most effective ways to address America's health care access problem is by dramatically expanding access to health centers, as both the Senate and the President have proposed.

(6) Many existing health centers operate in facilities that desperately need renovation or modernization. Thirty percent of health centers are located in buildings that are more than 30 years old, with 12 percent of such centers operating out of facilities that are more than 50 years old. In a recent survey of health centers in 11 States, 2/3 of those centers identified a need to improve, expand, or replace their current facility. An extrapolation based on this survey indicates there may be as much as $1,200,000,000 in unmet capital needs in our Nation's health centers.

(7) Dramatically increasing access to health centers requires building new facilities in communities that have access problems and lack a health center.

(8) Health centers often do not have the means to pay for capital improvements or new facilities. While most health centers raise some funds through private donations, it is difficult to raise sufficient amounts for capital needs without a middle- and upper-class donor base similar to other nonprofit organizations like universities and hospitals.

(9) Health centers have a limited ability to support loan payments. Due to an increasing number of uninsured patients and the fact that many health care reimbursements are less than the cost of care, health centers rarely have more than minimal positive operating margins. Yet lenders are rarely willing to take risks on nonprofit organizations without these positive margins.

(10) While the Federal Government currently provides grants to health centers to assist with operational expenses used to provide care to a medically-underserved population, there is no authority to provide grants to assist health centers to meet capital needs, such as construction of new facilities or modernization, expansion, or replacement of existing buildings.

(11) To assist health centers with their mission of providing health care to the medically underserved, the Federal Government should supplement local efforts to meet the capital needs of health centers.

SEC. 3. AMENDMENTS TO THE PUBLIC HEALTH SERVICE ACT.

(a) HEALTH CARE FACILITY GRANTS AND LOAN GUARANTEES- Subpart I of part D of title III of the Public Health Service Act (42 U.S.C. 254b et seq.) is amended by adding at the end the following:

`SEC. 330L. HEALTH CARE FACILITY GRANTS AND LOAN GUARANTEES.

`(a) ELIGIBLE HEALTH CENTER DEFINED- In this section, the term `eligible health center' means a health center that receives--

`(1) a grant, on or after the date of enactment of this section, under subsection (c)(1)(A), (e)(1)(A), (f), (g), (h), or (i) of section 330; or

`(2) a subgrant, on or after the date of enactment of this section, from a grant awarded under such provision of law.

`(b) GRANT PROGRAM AUTHORIZED-

`(1) IN GENERAL- The Secretary may award grants to eligible health centers to pay for the costs described in paragraph (2).

`(2) USE OF FUNDS- An eligible health center that receives a grant under paragraph (1) may use the grant funds to--

`(A) modernize, expand, and replace existing facilities at such center;

`(B) construct new facilities at such center; and

`(C) acquire and lease facilities and equipment (including paying the costs of amortizing the principal of, and paying the interest on, loans for such facilities and equipment) to support or further the operation of such center.

`(3) LIMITATION-

`(A) IN GENERAL- Subject to subparagraph (B), the Federal share of a grant awarded under paragraph (1) to expand an existing, or construct a new, facility shall not exceed 90 percent of the total cost of the project (including interest payments) proposed by the eligible health center.

`(B) EXCEPTION- The Federal share maximum under subparagraph (A) shall not apply if--

`(i) the total cost of the project proposed by the eligible health center is less than $750,000; or

`(ii) the Secretary waives such maximum upon a showing of good cause.

`(b) FACILITY LOAN GUARANTEES-

`(1) IN GENERAL-

`(A) IN GENERAL- The Secretary shall establish a program under which the Secretary may guarantee not less than 90 percent of the principal and interest on the total amount of loans made to an eligible health center by non-Federal lenders in order to pay for the costs associated with a capital needs project described in subparagraph (B).

`(B) PROJECTS- Capital needs projects under this subsection include--

`(i)(I) acquiring, leasing, modernizing, expanding, or replacing existing facilities;

`(II) constructing new facilities; or

`(III) purchasing or leasing equipment; or

`(ii) the costs of refinancing loans made for any of the projects described in clause (i).

`(C) NOT A FEDERAL SUBSIDY- Any loan guarantee issued pursuant to this subsection shall not be deemed a Federal subsidy for any other purpose.

`(2) AUTHORITY FOR LOAN GUARANTEE PROGRAM- With respect to the program established under paragraph (1), the Secretary shall assume such authority--

`(A) as the Secretary has under paragraphs (2) and (4) of section 330; and

`(B) under section 1620 as the Secretary determines is necessary and appropriate.

`(3) DEFINITIONS- In this subsection:

`(A) FACILITIES- The term `facilities' means a building or buildings used by a health center, in whole or in part, to provide services permitted under section 330 and for such other purposes as are not specifically prohibited under such section as long as such use furthers the objectives of the health center.

`(B) NON-FEDERAL LENDER- The term `non-Federal lender' means any entity other than an agency or instrumentality of the Federal Government authorized by law to make loans, including a federally-insured bank, a lending institution authorized or licensed to make loans by the State in which it is located, and a State or municipal bonding authority or such authority's designee.

`(c) EVALUATION- Not later than 3 years after the date of enactment of this section, the Secretary shall prepare a report containing an evaluation of the programs authorized under this section. Such report shall include recommendations on how this section can be improved to better help health centers meet such centers' capital needs in order to expand access to health care in the United States.

`(d) AUTHORIZATION- For the purpose of carrying out this section, the Secretary shall use no more than 5 percent of any funds appropriated pursuant to section 330(s) (the subsection relating to authorization of appropriations). In addition, funds appropriated for fiscal years 1997 and 1998 under the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Acts of 1997 and 1998, which were made available for loan guarantees for loans made by non-Federal lenders for construction, renovation, and modernization of medical facilities that are owned and operated by health centers and which have not been expended, shall be made available for loan guarantees under this section.'.

(b) AUTHORIZATION OF APPROPRIATIONS- Section 330(s) of the Public Health Service Act (the subsection relating to authorization of appropriations) is amended by striking `this section' and inserting `this section and section 330L'.

END