I
106TH CONGRESS
1ST SESSION
H. R. 2236
To authorize the Secretary of Health and Human Services to make grants
in the form of forgiveable capital advances to help preserve community
hospitals experiencing financial difficulties.
IN THE HOUSE OF REPRESENTATIVES
JUNE 16, 1999
Mr. LAFALCE (for himself, Ms. KILPATRICK, and Mr. MEEKS) introduced the
following bill; which was referred to the Committee on Commerce
A BILL
To authorize the Secretary of Health and Human Services
to make grants in the form of forgiveable capital ad-
vances to help preserve community hospitals experiencing
financial difficulties.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Community Hospital
Preservation Act’’.
SEC. 2. AUTHORITY TO MAKE GRANTS.
(a) IN GENERAL.—From any amounts made avail-
able to carry out this Act, the Secretary may make grants
under this Act to eligible community hospitals.
(b) AMOUNT OF GRANT.—The aggregate amount of
grant amounts provided to any single eligible community
hospital that is awarded a grant may not be—
(1) less than $100,000;
(2) greater than $2,500,000; or
(3) greater than 10 percent of the total assets
of the hospital.
(c) MATCHING REQUIREMENT.—The Secretary may
not award grant amounts under this Act to any eligible
community hospital for any fiscal year in an amount that
exceeds the amount that the hospital receives, in cash con-
tributions, loans, or any combination thereof, for that fis-
cal year from non-Federal sources.
(d) 
HOSPITALS
WITH
HUD-INSURED
MORT-
GAGES.—The Secretary may not award grant amounts
under this Act to a hospital that is subject to a mortgage
insured by the Secretary of Housing and Urban Develop-
ment under section 242 of the National Housing Act (12
U.S.C. 1715z-7) unless the Secretary of Housing and
Urban Development approves the award before the date
of the award.
SEC. 3. USE OF GRANT AMOUNTS.
Grant amounts under this Act may be used only for
legitimate hospital purposes.
SEC. 4. APPLICATION.
The Secretary may award grant amounts under this
Act only to an eligible community hospital that has sub-
mitted an application to the Secretary at such time and
in such manner as the Secretary may require, and con-
taining such information and certifications as the Sec-
retary may require to ensure compliance with this Act.
SEC. 5. SELECTION CRITERIA.
The Secretary shall award grant amounts under this
Act in accordance with competitive criteria established by
the Secretary.
SEC. 6. RECOVERY OF GRANT AMOUNTS.
(a) RECOVERY.—For each award of grant amounts
under this Act, the Secretary shall recover, upon the date
specified in subsection (b), the amount specified in sub-
section (c).
(b) DATE OF RECOVERY.—The date specified in this
subsection is the first to occur of the following:
(1) The date on which the recipient fails to
comply substantially with section 3.
(2) The date on which the recipient fails to be
a hospital that meets the requirements of any of
subparagraphs (A), (B), and (C) of section 8(1).
(3) The date of the expiration of the 10-year
period beginning on the date of the award.
(c) AMOUNT OF RECOVERY AND FORGIVENESS OF
SUCH AMOUNT.—The amount specified in this subsection
is an amount equal to the amount of the award, reduced
by 10 percent of the amount of such award for each full
year from the date of the award through the date specified
in subsection (b) throughout which the recipient continues
to be a hospital that meets the requirements of any one
or more of subparagraphs (A), (B), and (C) of section
8(1).
(d) MANNER OF RECOVERY.—Any amount that the
Secretary recovers under this section shall be recovered
as if such amount had been loaned by the Secretary on
the date specified in subsection (b), amortized over a 20-
year period, with interest at a rate equal to the average
annual cost of borrowing by the Department of the Treas-
ury.
SEC. 7. ANNUAL REPORT.
Not later than February 1 of each year, the Secretary
shall submit to the Congress a report describing the activi-
ties carried out under this Act in the preceding calendar
year and containing any related information that the Sec-
retary considers appropriate.
SEC. 8. DEFINITIONS.
For purposes of this Act, the following definitions
shall apply:
(1) ELIGIBLE
COMMUNITY
HOSPITAL.—The
term ‘‘eligible community hospital’’ means a hospital
that meets the following requirements:
(A) The hospital is nonprofit.
(B) The hospital has total assets of not
more than $75,000,000.
(C) The hospital is an essential source of
basic hospital health care services within the
community in which the hospital is located.
(D) The hospital meets objective financial
criteria, to be established by the Secretary, that
indicate the hospital is experiencing ongoing fi-
nancial difficulties.
(E) The hospital is operating in an effi-
cient manner or has a viable financial recovery
plan reviewed by an independent public ac-
countant, or financial consultant, who has ex-
pertise in the industry of providing health care
services.
(2) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Health and Human Services.
SEC. 9. REGULATIONS.
The Secretary shall issue any regulations necessary
to carry out this Act.
SEC. 10. AUTHORIZATION OF APPROPRIATIONS.
For grants under this Act, there is authorized to be
appropriated to the Secretary $1,000,000,000 for each of
fiscal years 2000 through 2004, to remain available until
expended.
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