[Congressional Record Volume 149, Number 40 (Wednesday, March 12, 2003)]
[House]
[Pages H1755-H1756]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                HOSPITAL MORTGAGE INSURANCE ACT OF 2003

  Mr. GARY G. MILLER of California. Mr. Speaker, I move to suspend the 
rules and pass the bill (H.R. 659) to amend section 242 of the National 
Housing Act regarding the requirements for mortgage insurance under 
such Act for hospitals, as amended.
  The Clerk read as follows:

                                H.R. 659

       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 ``Hospital Mortgage Insurance 
     Act of 2003''.

     SEC. 2. STANDARDS FOR DETERMINING NEED AND FEASIBILITY FOR 
                   HOSPITALS.

       (a) In General.--Paragraph (4) of section 242(d) of the 
     National Housing Act (12 U.S.C. 1715z-7) is amended to read 
     as follows:
       ``(4)(A) The Secretary shall require satisfactory evidence 
     that the hospital will be located in a State or political 
     subdivision of a State with reasonable minimum standards of 
     licensure and methods of operation for hospitals and 
     satisfactory assurance that such standards will be applied 
     and enforced with respect to the hospital.
       ``(B) The Secretary shall establish the means for 
     determining need and feasibility for the hospital. If the 
     State has an official procedure for determining need for 
     hospitals, the Secretary shall also require that such 
     procedure be followed before the application for insurance is 
     submitted, and the application shall document that need has 
     also been established under that procedure.''.
       (b) Effective Date.--
       (1) In general.--The amendment made by this subsection (a) 
     shall take effect and apply as of the date of the enactment 
     of this Act.
       (2) Effect of regulatory authority.--Any authority of the 
     Secretary of Housing and Urban Development to issue 
     regulations to carry out the amendment made by subsection (a) 
     may not be construed to affect the effectiveness or 
     applicability of such amendment under paragraph (1) of this 
     subsection.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
California (Mr. Gary G. Miller) and the gentlewoman from California 
(Ms. Waters) each will control 20 minutes.
  The Chair recognizes the gentleman from California (Mr. Gary G. 
Miller).


                             General Leave

  Mr. GARY G. MILLER of California. Mr. Speaker, I ask unanimous 
consent that all Members may have 5 legislative days within which to 
revise and extend their remarks on this legislation and to include 
extraneous material thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  Mr. GARY G. MILLER of California. Mr. Speaker, I yield myself such 
time as I may consume.
  I rise in strong support of H.R. 659, the Hospital Mortgage Insurance 
Act of 2003, and I urge my colleagues to vote in favor of this 
important legislation.
  This legislation would give the Department of Housing and Urban 
Development the authority to provide FHA mortgage insurance to 
hospitals across the country which are currently ineligible for the 
insurance due to the lack of a State Certificate of Need Program.
  The reduced costs for these hospitals will allow the modernization 
and rehabilitation of medical facilities across the country.
  We have all heard from hospitals in our districts about the 
significant challenge they are facing in providing care to patients who 
are covered by Medicare and Medicaid. Hospital budgets are further 
strained as improvements in technology and health care knowledge 
require capital improvements such as additions and renovations to 
existing buildings.
  The need for capital improvements at hospitals will continue to grow 
as hospitals are increasingly under pressure to acquire state of the 
art equipment and expand services.
  We all know that modern health care facilities can improve the 
quality of life and the health of the population, yet financing for 
these new improvements at hospital facilities is often not readily 
available.
  To assist States in providing modern health care facilities, Congress 
created section 242 of the National Housing Act.
  Section 242 permits FHA to insure mortgages used to finance the 
replacement, modernization, and rehabilitation of inefficient existing 
hospital facilities. Hospitals benefit from the low interest rate costs 
attributable to FHA-insured financing.
  Under the 1968 law, to be eligible for section 242 financing a 
hospital must obtain a Certificate of Need from a designated State 
agency. The Certificate

[[Page H1756]]

of Need determines whether the hospital applying for the loan meets 
certain eligibility requirements for the receipt of the FHA loan 
guarantee.
  In the absence of Certificate of Need authority, a State is allowed 
to commission a feasibility study. In addition, the hospital is 
required to demonstrate that there is a reasonable State or local 
minimum licensing and operating standard in effect.
  The Certificate of Need Program is established to control the number 
of hospital beds and expenditures. When the Federal Certificate of Need 
Program began, 49 States enacted legislation for its Certificate of 
Need Program. Louisiana was the only State that did not.
  As a result of continuing Federal policies encouraging deregulation, 
Certificate of Need authority has sunsetted in some States. In fact, 
over the last 20 years, at least 18 States have repealed the 
Certificate of Need Programs.
  My own State of California does not have a Certificate of Need 
process. Therefore, it is far more difficult for hospitals to secure 
FHA-insured financing.

                              {time}  1215

  Under this new legislation, California would be put on a level 
playing field with other States.
  Even in States that have retained the Certificate of Need authority, 
some projects do not qualify. In States that do not have a Certificate 
of Need program, the relevant State agency often lacks the authority to 
commission alternative feasibility studies. The result of this is many 
States simply do not have access to this lower-cost FHA-insured 
financing.
  In fact, of the 64 hospital mortgages FHA currently insures under 
this program, only four are located in non-Certificate of Need States. 
Obviously, the section 242 program must be changed so that FHA-insured 
financing is accessible to hospitals in all States.
  H.R. 659 would give HUD the authority to establish a process for 
determining the need and feasibility for a hospital's proposed project, 
thus eliminating the requirement for States to provide a feasibility 
study where no Certificate of Need exists.
  This is an important bill that makes the necessary changes to ensure 
that the section 242 program is a viable program for all States. Again, 
I urge my colleagues to support this legislation and ensure that FHA-
insured financing is available in each State for the purpose of 
building new hospitals.
  Mr. Speaker, I reserve the balance of my time.
  Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of H.R. 659; and I would like to thank 
the subcommittee chairman, the gentleman from Ohio (Mr. Ney), and our 
chairman of the committee, the gentleman from Ohio (Mr. Oxley), for 
expediting this legislation, because it is certainly needed.
  I stand in strong support because FHA insures hospitals certainly 
under the section 242 loan program. The funding year 2004 
administration budget is requesting the authority to insure $700 
million of such hospital loans in funding year 2004. Decade-old 
statutory language authorizing FHA-hospital loans requires as a 
condition of a loan a State certification that there is a need for the 
hospital, or if no State procedure exists for such a certification, the 
State must commission an independent study of market need and 
feasibility.
  H.R. 659 addresses that concern that this Certificate of Need 
requirement makes it difficult, if not impossible, for hospitals in 
many States, including California, as was mentioned, to be eligible for 
FHA loans.
  This bill replaces existing statutory requirements with one that 
simply requires the HUD Secretary to establish a means for determining 
need and feasibility for any hospitals applying for a loan, with a 
proviso that a hospital located in any State with an official procedure 
for determining need, that a Certificate of Need must follow that 
procedure.
  So I think that it has been well stated that the need is there. There 
are so many States that are waiting on us to provide them the 
opportunity to have access to this insurance, and I would ask for an 
``aye'' vote.
  Mr. OXLEY. Mr. Speaker, I rise in strong support of H.R. 659, the 
Hospital Mortgage Insurance Act of 2003 and urge my colleagues support.
  The Committee on Financial Services unanimously approved this 
legislation on February 13, 2003. H.R. 659 amends Section 242 of the 
National Housing Act to ensure that every state will be eligible for 
FHA insured financing to build new hospitals or renovation and updates 
existing hospitals. The version we are considering today includes an 
amendment that will make this legislation effective immediately.
  Back in 1968, Congress enacted Section 242 in recognition that 
hospitals were in need of low cost financing in order to fund capital 
improvements such as additions and renovations to existing buildings, 
and in some cases to build new hospitals. In order to be eligible for 
the financing, the 1968 law required the hospital to obtain a 
certificate of need or to perform a feasibility study. However, over 
the years, as part of the effort to encourage deregulation, certificate 
of needs authority has sunset in some states.
  H.R. 659 recognizes the fact that many states no longer have 
certificate of needs authority or the mechanisms in place for 
feasibility studies. It sets up a more simplified process for states to 
be eligible for the low-cost FHA insured financing.
  H.R. 659 will help to assure that quality, affordable health care is 
more accessible to rural and urban American communities where 
conventional financing may not be readily available.
  According to the Congressional Budget Office, enacting this 
legislation would result in $2 million to $3 million of additional 
collections each year, which will offset any additional costs 
associated with this change in the program.
  I want to thank Housing Subcommittee Chair Bob Ney and Ranking Member 
Maxine Waters for their leadership on this important bill. Mr. Speaker, 
this is a good bill and I urge member's support.
  Ms. WATERS. Mr. Speaker, I yield back the balance of my time.
  Mr. GARY G. MILLER of California. Mr. Speaker, I have no further 
requests for time, and I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. LaHood). The question is on the motion 
offered by the gentleman from California (Mr. Gary G. Miller) that the 
House suspend the rules and pass the bill, H.R. 659, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of 
those present have voted in the affirmative.
  Mr. GARY G. MILLER of California. Mr. Speaker, on that I demand the 
yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

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