[Congressional Record Volume 148, Number 34 (Thursday, March 21, 2002)]
[Senate]
[Pages S2268-S2269]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CRAIG:
  S. 2046. 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; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. CRAIG. Mr. President, I rise today to introduce the Rural Health 
Care Facility Improvement Act.
  Traveling throughout my State of Idaho, I have heard from many people 
about the need for additional funding to keep rural health facilities 
operational and up-to-date. After doing further research, I have found 
that this is true in all States in virtually all rural areas. For this 
reason, I am introducing the Rural Health Care facility Improvement 
Act.
  This bill would allow for $250,000,000 million in guaranteed loans to 
be available to rural health care facilities. Individual facilities 
could borrow up to $5,000,000 to be used for two purposes. First, to 
allow for capital improvements to their facility and equipment and 
second, to allow for the purchase of high-technology equipment.
  Providing health care services to much of rural America has become 
increasingly difficult in recent years. During the 1970s, rural 
communities thrived with economic expansion and unprecedented 
population growth. Rural health providers represented valuable 
institutions offering an array of medical services to their 
communities. Now many of these rural communities are struggling to 
maintain critical health care facilities.
  We all know that rural health care facilities are a vital part of the 
infrastructure of rural communities and the collapse of health care 
services in many areas often contributes to the further decline of 
rural communities. That's why it is so important to make sure that 
rural facilities have access to funds to keep them operational.
  In the 1990's, rural health care providers have begun to rally in the 
face of this challenge. They have developed creative ways to meet the 
needs of their communities with their limited resources. This 
legislation is one more way to help those who are working to guarantee 
health care in rural America.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2046

       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.

[[Page S2269]]

       ``(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.''.
                                 ______