S 523 IS

Entitled the `Building Better Health Centers Act of 2001'.

March 13, 2001

Mr. BOND introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions

Entitled the `Building Better Health Centers Act of 2001'.

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 2001'.

SEC. 2. FINDINGS.

Congress makes the following findings:

(1) Many health care experts believe that Americans' lack of access to basic health services is our 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.

(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 more than 11,000,000 Americans, at least 7,000,000 minorities, more than 600,000 farmworkers, and at least 600,000 homeless individuals each year.

(4) Studies show that health centers provide high-quality and cost-effective health care. The average yearly cost for a health center patient is less than $1 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 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 right now.

(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 also 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 banks 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, it does not have the authority to provide grants to assist health centers meet capital needs such as new facilities or renovation.

(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 health centers' capital needs.

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

Section 330 of the Public Health Service Act (42 U.S.C. 2546) is amended by adding at the end the following:

`(r) HEALTH CARE FACILITY GRANTS AND LOAN GUARANTEES-

`(1) PROGRAM AUTHORIZED-

`(A) IN GENERAL- The Secretary may award grants to eligible health centers to pay for the costs described in subparagraph (C).

`(B) ELIGIBLE HEALTH CENTERS- The term `eligible health center' means any health center that is receiving a grant under subsections (c)(1)(A), (e), (f), (g), (h), or (i) on or after the date of enactment of this subsection.

`(C) LIMITATION-

`(i) IN GENERAL- A grant awarded under subparagraph (A) to expand or replace an existing facility or construct a new facility shall not exceed 75 percent of the total cost of the project (including interest payments) proposed by the eligible health center.

`(ii) EXCEPTION- Clause (i) shall not apply if the total cost of the project proposed by the eligible health center is less than $750,000, or the Secretary waives the limitation described such clause upon a showing of good cause.

`(D) USE OF FUNDS- An eligible health center that receives a grant under subparagraph (A) shall use funds received through such grant to--

`(i) acquire, lease, modernize, expand and replace existing facilities;

`(ii) construct new facilities; and

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

`(2) FACILITY LOAN GUARANTEES-

`(A) IN GENERAL- The Secretary shall establish a program under which the Secretary may guarantee 100 percent of the principal and interest on loans made by non-Federal lenders to health centers to pay for the costs of acquiring, leasing, modernizing, expanding, or replacing existing facilities, constructing new facilities, or purchasing or leasing equipment, or refinancing loans made for any of the purposes listed above. Any loan guarantee issued pursuant to this paragraph shall not be deemed a Federal subsidy for any other purpose.

`(B) DEFINITIONS- In this section:

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

`(ii) 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 such loan, including a Federally-insured bank, a lending institution authorized or licensed by the State in which it resides to make such loans, and a State or municipal bonding authority or such authority's designee.

`(C) PROTECTION OF FINANCIAL INTERESTS- The Secretary may not approve a loan guarantee under this paragraph unless the Secretary determines that--

`(i) the terms, conditions, security (if any), and schedule and amount of repayments with respect to the loan are sufficient to protect the financial interests of the United States and are otherwise reasonable, including a determination that the rate of interest does not exceed such percent per annum on the principal obligation outstanding as the Secretary determines to be reasonable, taking into account the range of interest rates prevailing in the private market for similar loans and the risks assumed by the United States, except that the Secretary may not require as security any center asset that is, or may be, needed by the center or centers involved to provide health services;

`(ii) the loan would not be available on reasonable terms and conditions without the guarantee under this paragraph; and

`(iii) amounts appropriated for the program under this paragraph are sufficient to provide loan guarantees under this paragraph.

`(D) RECOVERY OF PAYMENTS-

`(i) IN GENERAL- The United States shall be entitled to recover from the applicant for a loan guarantee under this paragraph the amount of any payment made pursuant to such guarantee, unless the Secretary for good cause waives such right of recovery (subject to appropriations remaining available to permit such a waiver) and, upon making any such payment, the United States shall be subrogated to all of the rights of the recipient of the payments with respect to which the guarantee was made. Amounts recovered under this clause shall be credited as reimbursements to the financing account of the program.

`(ii) MODIFICATION OF TERMS AND CONDITIONS- To the extent permitted by clause (iii) and subject to the requirements of section 504(e) of the Federal Credit Reform Act of 1990 (2 U.S.C. 661c(e)), any terms and conditions applicable to a loan guarantee under this paragraph (including terms and conditions imposed under clause (iv)) may be modified or waived by the Secretary to the extent the Secretary determines it to be consistent with the financial interest of the United States.

`(iii) INCONTESTABILITY- Any loan guarantee made by the Secretary under this paragraph shall be incontestable--

`(I) in the hands of an applicant on whose behalf such guarantee is made unless the applicant engaged in fraud or misrepresentation in securing such guarantee; and

`(II) as to any person (or successor in interest) who makes or contracts to make a loan to such applicant in reliance thereon unless such person (or successor in interest) engaged in fraud or misrepresentation in making or contracting to make such loan.

`(iv) FURTHER TERMS AND CONDITIONS- Guarantees of loans under this paragraph shall be subject to such further terms and conditions as the Secretary determines to be necessary to assure that the purposes of this paragraph will be achieved.

`(E) DEFAULTS-

`(i) IN GENERAL- Subject to the requirements of the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.), the Secretary may take such action as may be necessary to prevent a default on a loan guaranteed under this paragraph, including the waiver of regulatory conditions, deferral of loan payments, renegotiation of loans, and the expenditure of funds for technical and consultative assistance, for the temporary payment of the interest and principal on such a loan, and for other purposes. Any such expenditure made under the preceding sentence on behalf of a health center or centers shall be made under such terms and conditions as the Secretary shall prescribe, including the implementation of such organizational, operational, and financial reforms as the Secretary determines are appropriate and the disclosure of such financial or other information as the Secretary may require to determine the extent of the implementation of such reforms.

`(ii) FORECLOSURE- The Secretary may take such action, consistent with State law respecting foreclosure procedures and, with respect to reserves required for furnishing services on a prepaid basis, subject to the consent of the affected States, as the Secretary determines appropriate to protect the interest of the United States in the event of a default on a loan guaranteed under this paragraph, except that the Secretary may only foreclose on assets offered as security (if any) in accordance with subparagraph (C).

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

`(4) LIMITATION- For the purpose of carrying out this subsection, the Secretary shall use no more than 5 percent of any funds appropriated pursuant to subsection (l).'.

END