A bill entitled the "Building Better Health Centers Act of 2001".

Summary: Building Better Health Centers Act of 2001 - Amends the Public Health Service Act to authorize the Secretary of Health and Human Services to provide loan guarantees or make grants to eligible health centers for expansion, new construction, or equipment purchase or lease.

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).''.