‘‘(1) IN GENERAL.—There shall be created a 
Health Safety Net Infrastructure Trust Fund Board 
of Trustees composed of the Secretary of Health and 
Human Services, the Secretary of the Treasury, the 
Assistant Secretary for Health, the Director of the 
Office of Minority Health, and the Administrator of 
the Centers for Medicare and Medicaid Services (all 
serving in their ex officio capacities), and 5 public 
members who shall be appointed for 4 year terms by 
the President, from the following categories— 
‘‘(A) one chief health officer from a State; 
‘‘(B) one chief executive officer of a health 
care facility that meets the general eligibility 
criteria of this title; 
‘‘(C) one representative of the financial 
community; and 
‘‘(D) two additional public or consumer 
representatives. 
‘‘(2) DUTIES.—The Board of Trustees shall 
meet no less than quarterly and shall have the re-
sponsibility to approve implementing regulations, to 
establish criteria, and to recommend and approve ex-
penditures by the Secretary under the programs set 
forth in this title. 
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‘‘(3) MANAGING TRUSTEE.—The Secretary of 
the Treasury shall serve as the Managing Trustee of 
the Trust Fund, and shall be responsible for the in-
vestment of funds. The provisions of subsections (b) 
through (e) of section 1817 of the Social Security 
Act shall apply to the Trust Fund and the Managing 
Trustee of the Trust Fund in the same manner as 
they apply to the Federal Hospital Insurance Trust 
Fund and the Managing Trustee of that Trust 
Fund. 
‘‘SEC. 2905. ADMINISTRATION. 
‘‘(a) IN GENERAL.—The Administrator of the Cen-
ters for Medicare and Medicaid Services shall serve as Sec-
retary of the Board of Trustees and shall administer the 
programs under this title. 
‘‘(b) LIMITATION ON ADMINISTRATIVE EXPENSES.— 
Not more than 5 percent of the funds annually appro-
priated to the Trust Fund may be available for adminis-
tration of the Trust Fund or programs under this title. 
‘‘Subtitle B—Loan Guarantees 
‘‘SEC. 2911. PROVISION OF LOAN GUARANTEES TO SAFETY 
NET HEALTH CARE FACILITIES. 
‘‘(a) IN GENERAL.—The Safety Net Infrastructure 
Trust Fund will provide a Federal guarantee of loan re-
payment, including guarantees of repayment of refi-
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nancing loans, to non-Federal lenders making loans to eli-
gible health care facilities for health care facility replace-
ment (either by construction or acquisition), moderniza-
tion and renovation projects, and capital equipment acqui-
sition. 
‘‘(b) PURPOSES.—The loan guarantee program shall 
be designed by the Trust Fund Board with the goal of 
rebuilding and maintaining the essential health services of 
health care facilities eligible for assistance under this title. 
‘‘SEC. 2912. ELIGIBLE LOANS. 
‘‘(a) IN GENERAL.—Loan guarantees under this sub-
title are available for loans made to eligible health care 
facilities for replacement facilities (either newly con-
structed or acquired), modernization and renovation of ex-
isting facilities, and for capital equipment acquisition. 
‘‘(b) LOAN GUARANTEE MUST BE ESSENTIAL TO 
BOND FINANCING.—Eligible health care facilities must 
demonstrate that a Federal loan guarantee is essential to 
obtaining bond financing from non-Federal lenders at a 
reasonably affordable rate of interest. 
‘‘(c) ADDITIONAL ELIGIBILITY CRITERIA FOR LOAN 
GUARANTEES.—In order to be eligible for assistance 
under this subtitle, a health care facility must demonstrate 
that the following criteria are met: 
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‘‘(1) The health care facility has evidence of an 
ability to meet debt service. 
‘‘(2) The assistance, when considered with other 
resources available to the project, is necessary and 
will restore, improve, or maintain the financial or 
physical soundness of the health care facility. 
‘‘(3) The applicant agrees to assume the public 
service responsibilities described in section 2903. 
‘‘(4) The project is being, or will be, operated 
and managed in accordance with a management-im-
provement-and-operating plan which is designed to 
reduce the operating costs of the project, which has 
been approved by the Trust Fund Board, and which 
includes— 
‘‘(A) a detailed maintenance schedule; 
‘‘(B) a schedule for correcting past defi-
ciencies in maintenance, repairs, and replace-
ments; 
‘‘(C) a plan to upgrade the project to meet 
cost-effective energy efficiency standards pre-
scribed by the Trust Fund Board; 
‘‘(D) a plan to improve financial and man-
agement control systems; 
‘‘(E) a detailed annual operating budget 
taking into account such standards for oper-
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ating costs in the area as may be determined by 
the Trust Fund Board; and 
‘‘(F) such other requirements as the Trust 
Fund Board may determine. 
‘‘(5) The application includes stringent provi-
sions for continued State or local support of the pro-
gram, both with respect to operating and financial 
capital. 
‘‘(6) The terms, conditions, maturity, 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 oth-
erwise reasonable and in accord with regulation, in-
cluding a determination that the rate of interest 
does not exceed such annual percentage on the prin-
cipal obligation outstanding as the Trust Fund 
Board determines to be reasonable, taking into ac-
count the range of interest rates prevailing in the 
private market for similar loans and the risks as-
sumed by the United States. 
‘‘(7) The health care facility must meet such 
other additional criteria as the Secretary may im-
pose. 
‘‘(d) STATE OR LOCAL PARTICIPATION.—Projects in 
which State or local governmental entities participate in 
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the form of first guarantees of part or all of the total loan 
value shall be given a preference for loan guarantees under 
this subtitle. 
‘‘SEC. 2913. GUARANTEE ALLOTMENTS. 
‘‘(a) IN GENERAL.—$150,000,000 shall be annually 
allocated within the Trust Fund to the loan guarantee pro-
gram established by this subtitle in order to create a cu-
mulative reserve in support of loan guarantees. 
‘‘(b) LOAN GUARANTEES FOR RURAL HEALTH CARE 
FACILITIES.—At least 20 percent of the dollar value of 
loan guarantees made under this program during any 
given year shall be allocated for eligible rural health care 
facilities, to the extent a sufficient number of applications 
are made by such health care facilities. 
‘‘(c) GUARANTEES
FOR SMALL LOANS.—At least 
$200,000,000 of the annual dollar value of loan guaran-
tees made under the program shall be reserved for loans 
of under $50,000,000, if there are a sufficient number of 
applicants for loans of that size. 
‘‘(d) SPECIAL RULE FOR REFINANCING LOANS.— 
Not more than 20 percent of the amount allocated each 
year to the loan guarantee program established by this 
subtitle may be allocated to guarantee refinancing loans 
during the year. 
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‘‘SEC. 2914. TERMS AND CONDITIONS OF LOAN GUARAN-
TEES. 
‘‘(a) IN GENERAL.—The principal amount of the 
guaranteed loan, when added to any Federal grant assist-
ance made under this title, may not exceed 95 percent of 
the total value of the project, including land. 
‘‘(b) GUARANTEES PROVIDED MAY NOT SUPPLANT 
OTHER FUNDS.—Guarantees provided under this subtitle 
may not be used to supplant other forms of State or local 
support. 
‘‘(c) RIGHT
TO
RECOVER
FUNDS.—The United 
States shall be entitled to recover from any applicant 
health care facility the amount of payments made pursu-
ant to any loan guarantee under this subtitle, unless the 
Trust Fund Board for good cause waives its right of recov-
ery, and the United States shall, upon making any such 
payment pursuant to any such loan guarantee be sub-
rogated to all of the rights of the recipients of the pay-
ments. 
‘‘(d) MODIFICATION OF TERMS.—Loan guarantees 
made under this subtitle shall be subject to further terms 
and conditions as the Trust Fund Board determines to 
be necessary to assure that the purposes of this Act will 
be achieved, and any such terms and conditions may be 
modified by the Trust Fund Board to the extent that it 
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determines such modifications to be consistent with the 
financial interest of the United States. 
‘‘(e) TERMS ARE INCONTESTABLE ABSENT FRAUD 
OR MISREPRESENTATION.—Any loan guarantee made by 
the Trust Fund Board pursuant to this subtitle shall be 
incontestable in the hands of an applicant on whose behalf 
such guarantee is made, and as to any person who makes 
or contracts to make a loan to such applicant in reliance 
thereon, except for fraud or misrepresentation on the part 
of such applicant or other person. 
‘‘SEC. 2915. PREMIUMS FOR LOAN GUARANTEES. 
‘‘(a) IN GENERAL.—The Trust Fund Board shall de-
termine a reasonable loan insurance premium which shall 
be charged for loan guarantees under this subtitle, taking 
into account the availability of the reserves created under 
section 2913. Premium charges shall be payable in cash 
to the Trust Fund Board, either in full upon issuance, 
or annually in advance. In addition to the premium charge 
herein provided for, the Trust Fund Board is authorized 
to charge and collect such amount as it may deem reason-
able for the appraisal of a property or project offered for 
insurance and for the inspection of such property or 
project. 
‘‘(b) PAYMENT IN ADVANCE.—In the event that the 
principal obligation of any loan accepted for insurance 
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under this subtitle is paid in full prior to the maturity 
date, the Trust Fund Board is authorized in its discretion 
to require the payment by the borrower of an adjusted 
premium charge in such amount as the Board determines 
to be equitable, but not in excess of the aggregate amount 
of the premium charges that the health care facility would 
otherwise have been required to pay if the loan had contin-
ued to be insured until maturity date. 
‘‘(c) CANCELLATION OF LOAN.—In the event that 
any portion of a loan accepted for insurance under this 
subtitle is cancelled by the lender, the Trust Fund Board 
shall cancel the obligation of the borrower to pay premium 
charges on such portion for the period remaining through 
the maturity date of the loan. 
‘‘(d) TRUST FUND BOARD MAY WAIVE PREMIUMS.— 
The Trust Fund Board may in its discretion partially or 
totally waive premiums charged for loan insurance under 
this section for financially distressed health care facilities 
(as described by the Secretary). 
‘‘SEC. 2916. PROCEDURES IN THE EVENT OF LOAN DE-
FAULT. 
‘‘(a) IN GENERAL.—Failure of the borrower to make 
payments due under or provided by the terms of a loan 
accepted for insurance under this subtitle shall constitute 
a default. 
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‘‘(b) ASSIGNMENT OF DEFAULTED LOANS.—If a de-
fault continues for 30 days, then, upon the lender’s trans-
fer to the Trust Fund Board of all its rights and interests 
arising under the defaulted loan or in connection with the 
loan transaction, the lender shall be entitled to debentures 
which, together with a certificate of claim, are equal in 
value to the amount the lender would have received if, on 
the date of transfer, the borrower had repaid the loan in 
full, together with the amount of necessary expenses in-
curred by the lender in connection with the default. 
‘‘(c) FORECLOSURE BY LENDER.—Subject to the ap-
proval of the Trust Fund Board, or as provided in regula-
tions, the lender may foreclose on the property securing 
the defaulted loan. 
‘‘(d) FORECLOSURE BY TRUST FUND BOARD.—The 
Trust Fund Board is authorized to— 
‘‘(1) acquire possession of and title to any prop-
erty securing a defaulted loan by voluntary convey-
ance in extinguishment of the indebtedness, or 
‘‘(2) institute proceedings for foreclosure on the 
property securing any such defaulted loan and pros-
ecute such proceedings to conclusion. 
‘‘(e) HANDLING AND DISPOSAL OF PROPERTY; SET-
TLEMENT OF CLAIMS.— 
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‘‘(1) PAYMENT FOR CERTAIN EXPENSES.—Not-
withstanding any other provision of law relating to 
the acquisition, handling, or disposal of real and 
other property by the United States, the Trust Fund 
Board shall also have power, for the protection of 
the interests of the Trust Fund, to pay out of the 
Trust Fund all expenses or charges in connection 
with, and to deal with, complete, reconstruct, rent, 
renovate, modernize, insure, make contracts for the 
management of, or establish suitable agencies for 
the management of, or sell for cash or credit or lease 
in its discretion, any property acquired by the Trust 
Fund under this section. 
‘‘(2) 
SETTLEMENT
OF
CLAIMS.—Notwith-
standing any other provision of law, the Trust Fund 
Board shall also have the power to pursue to final 
collection by way of compromise or otherwise all 
claims assigned and transferred to the Trust Fund 
in connection with the assignment, transfer, and de-
livery provided for in this section, and at any time, 
upon default, to foreclose or refrain from foreclosing 
on any property secured by any defaulted loan as-
signed and transferred to or held by the Trust 
Fund. 
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