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.

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.
            ``(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.''.

Summary: Rural Health Care Facility Improvement Act of 2002 - Amends the Public Health Service Act to authorizes the Secretary of Health and Human Services to establish a loan guarantee program for rural health facilities. Defines rural health facility to include the following facilities found in rural areas: health clinics, critical access hospitals, hospitals, skilled nursing facilities, health centers, federally qualified health centers, and nursing homes. Covers the purchase of new and the repair of existing infrastructure and technology. Sets forth loan limits. Entitles the United States to subrogation and makes such loan guarantees incontestable. Authorizes the Secretary to take such action as may be necessary to prevent a default, subject to the requirements of the Federal Credit Reform Act of 1990. Permits the Secretary to foreclose, as specified.