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  1st Session
                                 S. 673

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


                                 A BILL

   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,


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


    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 
            (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 
            (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 
            (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.


    (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:


    ``(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 
                    ``(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 
                    ``(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 
    ``(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''.

Pages: 1

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