I
106TH CONGRESS
2D SESSION
H. R. 5255
To amend the National Housing Act to authorize the Secretary of Housing
and Urban Development to make grants to hospitals with mortgages
insured under such Act for conversion and re-utilization of excess capac-
ity.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 21, 2000
Mr. LAFALCE introduced the following bill; which was referred to the
Committee on Banking and Financial Services
A BILL
To amend the National Housing Act to authorize the Sec-
retary of Housing and Urban Development to make
grants to hospitals with mortgages insured under such
Act for conversion and re-utilization of excess capacity.
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 ‘‘FHA-Insured Hospital
Conversion and Re-Utilization Act’’.
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
new subsections:
‘‘(i) GRANTS FOR HOSPITAL CONVERSION AND RE-
UTILIZATION.—
‘‘(1) IN GENERAL.—To the extent amounts are
made available for grants under this subsection, the
Secretary may make grants in accordance with this
subsection to owners of eligible hospitals under para-
graph (3) for use only for carrying out activities de-
signed to convert hospitals (or portions thereof) to
facilities described in paragraph (4).
‘‘(2) FORM
AND
USE
OF
GRANTS.—Grants
under this subsection may be made only in the fol-
lowing forms for the following uses:
‘‘(A) CAPITAL GRANTS.—In the form of a
capital grant for use only for the capital costs
of conversion activities.
‘‘(B) INTEREST SUBSIDIES.—In the form
of periodic payments of interest subsidies in
connection with any loan made to finance such
conversion activities.
‘‘(3) ELIGIBLE
HOSPITALS.—An eligible hos-
pital under this paragraph is a hospital that—
‘‘(A) is subject to a mortgage that is in-
sured under this section;
‘‘(B)(i) is located in an area that the Sec-
retary determines has excess hospital capacity;
or
‘‘(ii) would, in the determination of the
Secretary, improve its financial soundness as a
result of the proposed conversion and re-utiliza-
tion activities; and
‘‘(C) has submitted an application to the
Secretary for a grant under this subsection,
which has been approved by the Secretary.
‘‘(4) ELIGIBLE
HEALTH
CARE
FACILITIES.—
The Secretary shall determine, for purposes of this
subsection, the types of facilities providing health
care and supportive housing for elderly persons and
families to which hospitals (or portions thereof) may
be converted using grant amounts under this sub-
section. Such facilities shall include assisted living
facilities, nursing homes, supportive housing for the
elderly, and any other facilities that the Secretary
considers appropriate.
‘‘(5) APPLICATIONS.—The Secretary shall pro-
vide for owners of eligible hospitals under paragraph
(3) to submit to the Secretary applications for
grants under this subsection in such form and in ac-
cordance with such procedures as the Secretary shall
provide. An application shall contain—
‘‘(A) a description of the proposed conver-
sion activities for which a grant under this sub-
section is requested and the type of facility to
be established by such activities;
‘‘(B) a statement of the amount of the
grant requested for such conversion activities;
‘‘(C) a description of the resources that are
expected to be made available, if any, in con-
junction with the grant under this subsection;
and
‘‘(D) such other information or certifi-
cations that the Secretary determines to be nec-
essary or appropriate.
‘‘(6) SELECTION
CRITERIA.—The Secretary
shall select applications for grants under this sub-
section based upon selection criteria, which shall be
established by the Secretary and shall include—
‘‘(A) the extent to which the conversion is
likely to meet health care and supportive hous-
ing needs in the local community in which the
hospital (or portion thereof) to be converted is
located;
‘‘(B) the inability of the applicant to fund
the conversion activities from existing financial
resources, as evidenced by the applicant’s finan-
cial records;
‘‘(C) the extent to which the applicant has
evidenced community support for the conver-
sion, by such indicators as letters of support
from the local community for the conversion
and financial contributions from public and pri-
vate sources;
‘‘(D) the capability of the applicant of pro-
viding for the sound operation of the proposed
facility; and
‘‘(E) such other criteria as the Secretary
determines to be appropriate to ensure that
amounts made available for grants under this
subsection are used effectively.
‘‘(7) TREATMENT OF MORTGAGE INSURANCE.—
Notwithstanding any provision of this section or of
any contract for mortgage insurance provided pursu-
ant to this section, an eligible hospital (or a portion
thereof) under paragraph (3) that is subject to a
mortgage insured pursuant to this section may be
converted using grant amounts under this sub-
section. The Secretary shall provide for the uninter-
this section shall be made only in the form of peri-
odic payments of interest subsidies.
‘‘(2) ELIGIBLE
HOSPITALS.—An eligible hos-
pital under this paragraph is a hospital that—
‘‘(A) is subject to a mortgage that is in-
sured under this section;
‘‘(B) in the determination of the Secretary,
is in a distressed financial condition; and
‘‘(C) has submitted an application to the
Secretary for a grant under this subsection, as
the Secretary shall require, which has been ap-
proved by the Secretary.
‘‘(3) FUNDING.—Amounts shall be available for
grants under this subsection as provided in sections
519(g) and 205(i).’’.
SEC. 3. FUNDING OF GRANTS FROM 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 new
subsection:
‘‘(g) AVAILABILITY
OF AMOUNTS
FOR HOSPITAL
CONVERSION GRANTS.—
‘‘(1) IN GENERAL.—The amount of any nega-
tive 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 para-
graph (2) shall be considered to be new budget au-
thority and shall be available, without fiscal year
limitation, for grants under subsections (i) and (j) of
section 242.
‘‘(2) COVERED PROGRAMS.—The programs re-
ferred to in this paragraph are the programs under
this Act for insurance of mortgages and loans that,
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 ‘Sum-
mary of Loan Levels, Subsidy Budget Authority and
Outlays by Program’, are classified under budget ac-
count 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 ‘Hos-
pitals’.’’.
SEC. 4. FUNDING OF GRANTS FROM MUTUAL MORTGAGE
INSURANCE FUND SURPLUS.
Section 205 of the National Housing Act (12 U.S.C.
1711) is amended—
(1) in subsection (e), by inserting ‘‘or for use
for grants pursuant to subsection (i)’’ before the
comma;
(2) in subsection (h)(1), by inserting ‘‘may not
make grants pursuant to subsection (i),’’ after the
4th comma; and
(2) by adding at the end the following new sub-
section:
‘‘(i) AVAILABILITY OF SURPLUS AMOUNTS FOR HOS-
PITAL CONVERSION GRANTS.—Any amounts in the Mu-
tual Mortgage Insurance Fund that are determined by the
Secretary to be surplus to the amount required to meet
the operational goals under subsection (h)(2) shall be
available, without fiscal year limitation, for grants under
subsections (i) and (j) section 242.’’.
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