SECTION 1. SHORT TITLE.

    This Act may be cited as the ``FHA-Insured Hospital Conversion and 
Reinvestment Act of 2001''.

SEC. 2. GRANTS FOR FHA-INSURED HOSPITALS.

    Section 242 of the National Housing Act (12 U.S.C. 1715z-7) is 
amended by adding at the end the following:
    ``(i) Grants for FHA-Insured Hospitals.--
            ``(1) Authority and use.--To the extent that amounts for 
        use under this subsection are made available pursuant to 
        section 519(g), the Secretary may make grants to eligible FHA-
        insured hospitals for use only for purposes that the Secretary 
        determines will reduce the risk of default and loss on 
        mortgages for those hospitals, which purposes shall include--
                    ``(A) carrying out activities to convert the excess 
                capacity of an eligible FHA-insured hospital to 
                facilities that provide health care and supportive 
                housing for elderly persons and families, including 
                assisted living facilities, nursing homes, and 
                supportive housing for the elderly; and
                    ``(B) assisting in paying debt service for an 
                eligible FHA-insured hospital, including service on 
                debt insured under this section.
            ``(2) Treatment of mortgage insurance.--
                    ``(A) In general.--Notwithstanding any provision of 
                this section or of any contract for mortgage insurance 
                provided pursuant to this section, an eligible FHA-
                insured hospital (or a portion of an eligible FHA-
                insured hospital) may be converted in accordance with 
                paragraph (1)(A), using grant amounts under this 
                subsection.
                    ``(B) Continuing coverage.--The Secretary shall 
                provide for the uninterrupted continuation of the 
                mortgage insurance coverage for a hospital that is 
                converted in accordance with paragraph (1)(A), for the 
                duration of the original term of the mortgage insurance 
                contract.
            ``(3) Definitions.--As used in this subsection:
                    ``(A) Assisted living facility; nursing home.--The 
                terms `assisted living facility' and `nursing home' 
                have the same meanings as in section 232 (12 U.S.C. 
                1715w).
                    ``(B) Elderly person.--The term `elderly person' 
                has the same meaning as in section 202(k) of the 
                Housing Act of 1959 (12 U.S.C. 1701q(k)).
                    ``(C) Eligible fha-insured hospitals.--The term 
                `eligible FHA-insured hospital' means a hospital that--
                            ``(i) is subject to a mortgage that is 
                        insured under this section;
                            ``(ii) would, in the determination of the 
                        Secretary, after consultation with the 
                        Secretary of Health and Human Services, improve 
                        its financial soundness as a result of the 
                        proposed activities or costs to be funded with 
                        grant amounts under this subsection; and
                            ``(iii) has submitted an application to the 
                        Secretary for a grant under this subsection, in 
                        accordance with such requirements as the 
                        Secretary shall establish.
                    ``(D) Supportive housing for the elderly.--The term 
                `supportive housing for the elderly' has the same 
                meaning as in section 202(k) of the Housing Act of 1959 
                (12 U.S.C. 1701q(k)).
            ``(4) Funding.--In addition to any amounts made available 
        under section 519(g), there are authorized to be appropriated 
        for grants under this subsection, such sums as may be necessary 
        for each of fiscal years 2002 through 2006.''.

SEC. 3. FUNDING OF GRANTS FROM SURPLUS AMOUNTS IN FHA INSURANCE FUNDS.

    (a) General Insurance Fund Surplus.--Section 519 of the National 
Housing Act (12 U.S.C. 1735c) is amended by adding at the end the 
following:
    ``(g) Availability of Surplus Amounts for Grants for FHA-Insured 
Hospitals.--
            ``(1) In general.--The amount of any negative credit 
        subsidy that is determined for any fiscal year for purposes of 
        title V of the Congressional Budget Act of 1974 (2 U.S.C. 661 
        et seq.), and is attributable to the programs referred to in 
        paragraph (2) shall be considered to be new budget authority 
        and shall be available, without fiscal year limitation, for 
        grants under section 242(i).
            ``(2) Covered programs.--The programs referred to in this 
        paragraph are the programs under this Act for insurance of 
        mortgages and loans that are classified under budget account 
        number 86-0200-0-1-371 and are referred to as `FHA Full 
        Insurance for Health Care Facilities (plus 241/232)', `Health 
        Care Refinances', and `Hospitals' on page 515 of the Appendix 
        to the Budget of the United States Government, Fiscal Year 2001 
        (H. Doc. 106-162, Vol. II), in the table entitled `Summary of 
        Loan Levels, Subsidy Budget Authority and Outlays by 
        Program'.''.

SEC. 4. REGULATIONS.

    Not later than 120 days after the date of enactment of this Act, 
pursuant to the authority in section 211 of the National Housing Act 
(12 U.S.C. 1715b), the Secretary shall issue such rules and regulations 
as may be necessary to carry out the amendments made by this Act.
FHA-Insured Hospital Conversion and Reinvestment Act of 2001 - Amends the National Housing Act to authorize the Secretary of Housing and Urban Development to make grants to eligible FHA-insured hospitals for use only for purposes that the Secretary determines will reduce the risk of default and loss on mortgages for those hospitals. Includes among such purposes: (1) carrying out activities to convert the excess capacity of an eligible FHA-insured hospital to facilities that provide health care and supportive housing for elderly persons and families, including assisted living facilities, nursing homes, and supportive housing for the elderly; and (2) assisting in paying debt service for an eligible FHA-insured hospital, including service on debt insured under this Act.Authorizes such hospital conversions, and requires the Secretary to provide for uninterrupted continuation of a converted hospital's mortgage insurance coverage for the duration of the original term of the mortgage insurance contract.Makes available to fund conversion grants any negative credit subsidies (surplus amounts) attributable to FHA programs for full insurance for health care facilities.
A bill to provide grants for FHA-insured hospitals.