Entitles the United States to subrogation and makes such loan guarantees incontestable. Authorizes the Secretary to take such action as may be necessary to prevent a default, subject to the requirements of the Federal Credit Reform Act of 1990. Permits the Secretary to foreclose, as specified.
[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2046 Introduced in Senate (IS)]
107th CONGRESS
2d Session
S. 2046
To amend the Public Health Service Act to authorize loan guarantees for
rural health facilities to buy new and repair existing infrastructure
and technology.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 21, 2002
Mr. Craig introduced the following bill; which was read twice and
referred to the Committee on Health, Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To amend the Public Health Service Act to authorize loan guarantees for
rural health facilities to buy new and repair existing infrastructure
and technology.
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 ``Rural Health Care Facility
Improvement Act of 2002''.
SEC. 2. GUARANTEED LOANS FOR RURAL HEALTH FACILITIES.
Title VI of the Public Health Service Act (42 U.S.C. 291 et seq.)
is amended by adding at the end the following:
``PART E--RURAL HEALTH FACILITIES
``SEC. 651. GUARANTEED LOANS FOR RURAL HEALTH FACILITIES.
``(a) Authorization of Loan Guarantees.--
``(1) Establishment.--The Secretary is authorized to
establish a program under which the Secretary may guarantee 100
percent of the principal and interest on loans made by non-
Federal lenders to rural health facilities to pay for the costs
of--
``(A) buying new or repairing existing
infrastructure; and
``(B) buying new or repairing existing technology.
``(2) Total loan amount available.--The Secretary is
authorized to guarantee not more than--
``(A) $250,000,000 in the aggregate of the
principal and interest on loans for rural health
facilities under paragraph (1); and
``(B) $5,000,000 of the principal and interest on
loans under paragraph (1) for each rural health
facility.
``(b) Protection of Financial Interests.--The Secretary may not
approve a loan guarantee under this section unless the Secretary
determines that--
``(1) 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 rural health
facility asset that is, or may be, needed by the rural health
facility involved to provide health services;
``(2) the loan would not be available on reasonable terms
and conditions without the guarantee under this section; and
``(3) amounts appropriated for the program under this
section are sufficient to provide loan guarantees under this
section.
``(c) Recovery of Payments.--
``(1) In general.--The United States shall be entitled to
recover from the applicant for a loan guarantee under this
section 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 section
shall be credited as reimbursements to the financing account of
the program established under this section.
``(2) Modification of terms and conditions.--To the extent
permitted by paragraph (3) 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 section (including terms and conditions
imposed under paragraph (4)) 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.
``(3) Incontestability.--Any loan guarantee made by the
Secretary under this section shall be incontestable--
``(A) 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
``(B) 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.
``(4) Further terms and conditions.--Guarantees of loans
under this section shall be subject to such further terms and
conditions as the Secretary determines to be necessary to
assure that the purposes of this section will be achieved.
``(d) Defaults.--
``(1) 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 section, 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 rural health facility 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.
``(2) 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 section, except that the Secretary
may only foreclose on assets offered as security (if any) in
accordance with subsection (b).
``(e) Nonapplication of Part D.--The provisions of part D shall not
apply to this part.
``(f) Definitions.--In this part:
``(1) 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.
``(2) Rural area.--The term `rural area' has the meaning
given the term in section 1886(d)(2)(D) of the Social Security
Act (42 U.S.C. 1395ww(d)(2)(D)).
``(3) Rural health facility.--The term `rural health
facility' includes--
``(A) rural health clinics (as defined in section
1861(aa)(2) of the Social Security Act (42 U.S.C.
1395x(aa)(2)));
``(B) critical access hospitals (as defined in
section 1861(mm)(1) of the Social Security Act (42
U.S.C. 1395x(mm)(1))) that are located in rural areas;
``(C) hospitals (as defined in section 1861(e) of
the Social Security Act (42 U.S.C. 1395x(e))) that are
located in rural areas;
``(D) skilled nursing facilities (as defined in
section 1819(a) of the Social Security Act (42 U.S.C.
1395i-3(a))) that are located in rural areas;
``(E) health centers (as defined in section 330)
that are located in rural areas;
``(F) federally qualified health centers (as
defined in section 1861(aa)(3) of the Social Security
Act (42 U.S.C. 1395x(aa)(3))); and
``(G) nursing homes (as defined in section 1908(e)
of the Social Security Act (42 U.S.C. 1396g(e))) that
are located in rural areas.''.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S2268)
Read twice and referred to the Committee on Health, Education, Labor, and Pensions. (text of measure as introduced: CR S2268-2269)
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