364
Disparities 
Elimination’’ 
after 
‘‘Minority 
Health’’; and 
(B) in paragraph (2)—
(i) by striking ‘‘Deputy Assistant’’; 
and 
(ii) by striking ‘‘(10) of subsection 
(b)’’ and inserting ‘‘(9) of subsection (c)’’; 
(5) in subsection (e)(1) (as so redesignated)—
(A) in subparagraph (A), by striking ‘‘sub-
section 
(b)(9)’’ 
and 
inserting 
‘‘subsection 
(b)(7)’’; and 
(B) in subparagraph (B), by striking ‘‘sub-
section (b)(10)’’ and inserting ‘‘subsection 
(b)(8)’’; 
(6) in subsection (f)(3) (as so redesignated), by 
striking ‘‘subsection (f)’’ and inserting ‘‘subsection 
(g)’’; 
(7) in subsection (g)(1) (as so redesignated)—
(A) by striking ‘‘1999 and each second’’ 
and inserting ‘‘2004 and each’’; 
(B) by striking ‘‘Labor and Human Re-
sources’’ and inserting ‘‘Health, Education, 
Labor, and Pensions’’; 
(C) by striking ‘‘2 fiscal years’’ and insert-
ing ‘‘fiscal year’’; and
365
(D) by inserting after ‘‘improving the 
health of racial and ethnic minority groups’’ the 
following: ‘‘reducing and eliminating disparities 
in health and healthcare in racial and ethnic 
minority populations, in accordance with the 
national plan specified under subsection (c) and 
the goals of Healthy People 2010’’; 
(8) by inserting after subsection (g) (as so re-
designated) the following: 
‘‘(h) FEDERAL PARTNERSHIP WITH ACCREDITATION 
ENTITIES.— 
‘‘(1) IN GENERAL.—Not later than 1 year after 
the date of enactment of the Healthcare Equality 
and Accountability Act, the Secretary, in collabora-
tion with the Director of the Agency for Healthcare 
Research and Quality, the Administrator of the Cen-
ters for Medicare and Medicaid Services, the Direc-
tor of the Office for Minority Health, and the heads 
of appropriate State agencies, shall convene a work-
ing group with members of accreditation organiza-
tions and other quality standard setting organiza-
tions to develop guidelines to evaluate and report on 
the health and healthcare of minority populations 
served by health centers, health plans, hospitals, and 
other federally funded health entities.
366
‘‘(2) REPORT.—Not later than 6 months after 
the convening of the working group under paragraph 
(1), the working group shall submit a report to the 
Secretary at such time, in such manner, and con-
taining such information as the Secretary may re-
quire, including guidelines and recommendations on 
how each accreditation body will work with con-
stituent members to ensure the adoption of such 
guidelines. 
‘‘(3) DEMONSTRATION
PROJECTS.—The Sec-
retary, acting through the Administrator of the Cen-
ters for Medicare and Medicaid Services, shall award 
grants for the establishment of demonstration 
projects to assess the impact of providing financial 
incentives for the reporting and analysis of the qual-
ity of minority healthcare by hospitals, health plans, 
health centers, and other healthcare entities. 
‘‘(4) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated to carry out 
this subsection, such sums as may be necessary for 
each of fiscal years 2005 through 2010. 
‘‘(i) PREPARATION OF HEALTH PROFESSIONALS TO 
PROVIDE HEALTHCARE TO MINORITY POPULATIONS.—
The Secretary, in collaboration with the Director of the 
Bureau of Health Professions and the Director of the Of-
367
fice of Minority Health, shall require that health profes-
sional schools that receive Federal funds train future 
health professionals to provide culturally and linguistically 
appropriate healthcare to diverse populations.’’; and 
(9) by striking subsection (k) (as so redesig-
nated) and inserting the following: 
‘‘(k) AUTHORIZATION OF APPROPRIATIONS.—For the 
purpose of carrying out this section (other than subsection 
(h)), there is authorized to be appropriated $100,000,000 
for fiscal year 2004, and such sums as may be necessary 
for each of fiscal years 2005 through 2010.’’. 
SEC. 605. ESTABLISHMENT OF THE INDIAN HEALTH SERV-
ICE AS AN AGENCY OF THE PUBLIC HEALTH 
SERVICE. 
(a) ESTABLISHMENT.—
(1) IN GENERAL.—In order to more effectively 
and efficiently carry out the responsibilities, authori-
ties, and functions of the United States to provide 
healthcare services to Indians and Indian tribes, as 
are or may be hereafter provided by Federal statute 
or treaties, there is established within the Public 
Health Service of the Department of Health and 
Human Services the Indian Health Service. 
(2) 
ASSISTANT
SECRETARY
OF
INDIAN 
HEALTH.—The Service shall be administered by an
368
Assistant Secretary of Indian Health, who shall be 
appointed by the President, by and with the advice 
and consent of the Senate. The Assistant Secretary 
shall report to the Secretary. Effective with respect 
to an individual appointed by the President, by and 
with the advice and consent of the Senate the term 
of service of the Assistant Secretary shall be 4 years. 
An Assistant Secretary may serve more than 1 term. 
(b) AGENCY.—The Service shall be an agency within 
the Public Health Service of the Department, and shall 
not be an office, component, or unit of any other agency 
of the Department. 
(c) FUNCTIONS AND DUTIES.—The Secretary shall 
carry out through the Assistant Secretary of the Service—
(1) all functions which were, on the day before 
the date of enactment of the Indian Health Care 
Amendments of 1988, carried out by or under the 
direction of the individual serving as Director of the 
Service on such day; 
(2) all functions of the Secretary relating to the 
maintenance and operation of hospital and health fa-
cilities for Indians and the planning for, and provi-
sion and utilization of, health services for Indians; 
(3) all health programs under which healthcare 
is provided to Indians based upon their status as In-
369
dians which are administered by the Secretary, in-
cluding programs under—
(A) the Indian Health Care Improvement 
Act; 
(B) the Act of November 2, 1921 (25 
U.S.C. 13); 
(C) the Act of August 5, 1954 (42 U.S.C. 
2001, et seq.); 
(D) the Act of August 16, 1957 (42 
U.S.C. 2005 et seq.); 
(E) the Indian Self-Determination Act (25 
U.S.C. 450f, et seq.); and 
(F) title XXIX of the Public Health Serv-
ice Act; and 
(4) all scholarship and loan functions carried 
out under title I of the Indian Health Care Improve-
ment Act. 
(d) AUTHORITY.—
(1) 
IN
GENERAL.—The 
Secretary, 
acting 
through the Assistant Secretary, shall have the au-
thority—
(A) except to the extent provided for in 
paragraph (2), to appoint and compensate em-
ployees for the Service in accordance with title 
5, United States Code;
370
(B) to enter into contracts for the procure-
ment of goods and services to carry out the 
functions of the Service; and 
(C) to manage, expend, and obligate all 
funds appropriated for the Service. 
(2) PERSONNEL
ACTIONS.—Notwithstanding 
any other provision of law, the provisions of section 
12 of the Act of June 18, 1934 (48 Stat. 986; 25 
U.S.C. 472), shall apply to all personnel actions 
taken with respect to new positions created within 
the Service as a result of its establishment under 
subsection (a). 
(e) RATE OF PAY.—
(1) POSITIONS AT LEVEL IV.—Section 5315 of 
title 5, United States Code, is amended by striking 
the following: ‘‘Assistant Secretaries of Health and 
Human Services (6).’’ and inserting ‘‘Assistant Sec-
retaries of Health and Human Services (7).’’. 
(2) POSITIONS AT LEVEL V.—Section 5316 of 
such title is amended by striking the following: ‘‘Di-
rector, Indian Health Service, Department of Health 
and Human Services.’’. 
(f) DUTIES OF ASSISTANT SECRETARY FOR INDIAN 
HEALTH.—Section 601 of the Indian Health Care Im-
371
provement Act (25 U.S.C. 1661) is amended in subsection 
(a)—
(1) by inserting ‘‘(1)’’ after ‘‘(a)’’; 
(2) in the second sentence of paragraph (1), as 
so designated, by striking ‘‘a Director,’’ and insert-
ing ‘‘the Assistant Secretary for Indian Health,’’; 
(3) by striking the third sentence of paragraph 
(1), as so designated, and all that follows through 
the end of the subsection (a) of such section and in-
serting the following: ‘‘The Assistant Secretary for 
Indian Health shall carry out the duties specified in 
paragraph (2).’’; and 
(4) by adding after paragraph (1) the following: 
‘‘(2) The Assistant Secretary for Indian Health 
shall—
‘‘(A) report directly to the secretary con-
cerning all policy and budget-related matters 
affecting Indian health; 
‘‘(B) collaborate with the Assistant Sec-
retary for Health concerning appropriate mat-
ters of Indian health that affect the agencies of 
the Public Health Service; 
‘‘(C) advise each Assistant Secretary of the 
Department of Health and Human Services 
concerning matters of Indian health with re-
372
spect to which that Assistant Secretary has au-
thority and responsibility; 
‘‘(D) advise the heads of other agencies 
and programs of the Department of Health and 
Human Services concerning matters of Indian 
health with respect to which those heads have 
authority and responsibility; and 
‘‘(E) coordinate the activities of the De-
partment of Health and Human Services con-
cerning matters of Indian health.’’. 
(g) CONTINUED SERVICE BY INCUMBENT.—The indi-
vidual serving in the position of Director of the Indian 
Health Service on the date preceding the date of enact-
ment of this Act may serve as Assistant Secretary for In-
dian Health, at the pleasure of the President after the 
date of enactment of this Act. 
(h) CONFORMING AMENDMENTS.—
(1) AMENDMENTS TO INDIAN HEALTH CARE IM-
PROVEMENT
ACT.—The Indian Health Care Im-
provement Act (25 U.S.C. 1601 et seq.) is amend-
ed—
(A) in section 601—
(i) in subsection (c), by striking ‘‘Di-
rector of the Indian Health Service’’ both
373
places it appears and inserting ‘‘Assistant 
Secretary for Indian Health’’; and 
(ii) in subsection (d), by striking ‘‘Di-
rector of the Indian Health Service’’ and 
inserting ‘‘Assistant Secretary for Indian 
Health’’; and 
(B) in section 816(c)(1), by striking ‘‘Di-
rector of the Indian Health Service’’ and insert-
ing ‘‘Assistant Secretary for Indian Health’’. 
(2) AMENDMENTS TO OTHER PROVISIONS OF 
LAW.—The following provisions are each amended 
by striking ‘‘Director of the Indian Health Service’’ 
each place it appears and inserting ‘‘Assistant Sec-
retary for Indian Health’’: 
(A) Section 203(a)(1) of the Rehabilitation 
Act of 1973 (29 U.S.C. 761b(a)(1)). 
(B) Subsections (b) and (e) of section 518 
of the Federal Water Pollution Control Act (33 
U.S.C. 1377 (b) and (e)). 
(C) Section 803B(d)(1) of the Native 
American Programs Act of 1974 (42 U.S.C. 
2991b–2(d)(1)). 
(i) REFERENCES.—Reference in any other Federal 
law, Executive order, rule, regulation, or delegation of au-
thority, or any document of or relating to the Director
374
of the Indian Health Service shall be deemed to refer to 
the Assistant Secretary for Indian Health. 
(j) DEFINITIONS.—For purposes of this section, the 
definitions contained in section 4 of the Indian Health 
Care Improvement Act shall apply. 
SEC. 606. OFFICE OF MINORITY HEALTH AT THE CENTERS 
FOR MEDICARE AND MEDICAID SERVICES. 
(a) IN GENERAL.—Not later than 60 days after the 
date of enactment of this Act, the Secretary of Health and 
Human Services shall establish within the Centers for 
Medicare and Medicaid Services an Office of Minority 
Health (referred to in this section as the ‘‘Office’’). 
(b) DUTIES.—The Office shall be responsible for the 
coordination and facilitation of activities of the Centers 
for Medicare and Medicaid Services to improve minority 
health and healthcare and to reduce racial and ethnic dis-
parities in health and healthcare, which shall include—
(1) creating a strategic plan, which shall be 
made available for public review, to improve the 
health and healthcare of Medicare, Medicaid, and 
SCHIP beneficiaries; 
(2) promoting agency-wide policies relating to 
healthcare delivery and financing that could have a 
beneficial impact on the health and healthcare of mi-
nority populations;
375
(3) assisting health plans, hospitals, and other 
health entities in providing culturally and linguis-
tically appropriate healthcare services; 
(4) increasing awareness and outreach activities 
for minority healthcare consumers and providers 
about the causes and remedies for health and 
healthcare disparities; 
(5) developing grant programs and demonstra-
tion projects to identify, implement and evaluate in-
novative approaches to improving the health and 
healthcare of minority beneficiaries in the Medicare, 
Medicaid, and SCHIP programs; 
(6) considering incentive programs relating to 
reimbursement that would reward health entities for 
providing quality healthcare for minority populations 
using established benchmarks for quality of care; 
(7) collaborating with the compliance office to 
ensure compliance with the anti-discrimination provi-
sions under title VI of the Civil Rights Act of 1964; 
(8) identifying barriers to enrollment in public 
programs under the jurisdiction of the Centers for 
Medicare and Medicaid Services; 
(9) monitoring and evaluating on a regular 
basis the success of minority health programs and 
initiatives;
376
(10) publishing an annual report about the ac-
tivities of the Centers for Medicare and Medicaid 
Services relating to minority health improvement; 
and 
(11) other activities determined appropriate by 
the Secretary of Health and Human Services. 
(c) STAFF.—The staff at the Office shall include—
(1) one or more individuals with expertise in 
minority health and racial and ethnic health dispari-
ties; and 
(2) one or more individuals with expertise in 
healthcare financing and delivery in underserved 
communities. 
(d) COORDINATION.—In carrying out its duties under 
this section, the Office shall coordinate with—
(1) the Office of Minority Health in the Office 
of the Secretary of Health and Human Services; 
(2) the National Centers for Minority Health 
and Health Disparities in the National Institutes of 
Health; and 
(3) the Office of Minority Health in the Centers 
for Disease Control and Prevention. 
(e) AUTHORIZATION OF APPROPRIATIONS.—For the 
purpose of carrying out this section, there are authorized 
to be appropriated $10,000,000 for fiscal year 2004, and
377
such sums may be necessary for each of fiscal years 2005 
through 2010. 
SEC. 607. OFFICE OF MINORITY AFFAIRS AT THE FOOD AND 
DRUG ADMINISTRATION. 
Chapter IX of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 391 et seq.) is amended by adding at the 
end the following: 
‘‘SEC. 908. OFFICE OF MINORITY AFFAIRS. 
‘‘(a) IN GENERAL.—Not later than 60 days after the 
date of enactment of this section, the Secretary shall es-
tablish within the Office of the Commissioner of the Food 
and Drug Administration an Office of Minority Affairs 
(referred to in this section as the ‘Office’). 
‘‘(b) DUTIES.—The Office shall be responsible for the 
coordination and facilitation of activities of the Food and 
Drug Administration to improve minority health and 
healthcare and to reduce racial and ethnic disparities in 
health and healthcare, which shall include—
‘‘(1) promoting policies in the development and 
review of medical products that reduce racial and 
ethnic disparities in health and healthcare; 
‘‘(2) encouraging appropriate data collection, 
analysis, and dissemination of racial and ethnic dif-
ferences using, at a minimum, the categories de-
scribed in the 1997 Office of Management and
378
Budget standards, in response to different therapies 
in both adult and pediatric populations; 
‘‘(3) providing, in coordination with other ap-
propriate government agencies, education, training, 
and support to increase participation of minority pa-
tients and physicians in clinical trials; 
‘‘(4) collecting and analyzing data using, at a 
minimum, the categories described in the 1997 Of-
fice of Management and Budget standards, on the 
number of participants from minority racial and eth-
nic backgrounds in clinical trials used to support 
medical product approvals; 
‘‘(5) the identification of methods to reduce lan-
guage and literacy barriers; and 
‘‘(6) publishing an annual report about the ac-
tivities of the Food and Drug Administration per-
taining to minority health. 
‘‘(c) STAFF.—The staff of the Office shall include—
‘‘(1) one or more individuals with expertise in 
the design and conduct of clinical trials of drugs, bi-
ological products, and medical devices; and 
‘‘(2) one or more individuals with expertise in 
therapeutic classes or disease states for which med-
ical evidence suggests a difference based on race or 
ethnicity.
379
‘‘(d) COORDINATION.—In carrying out its duties 
under this section, the Office shall coordinate with—
‘‘(1) the Office of Minority Health in the Office 
of the Secretary of Health and Human Services; 
‘‘(2) the National Center for Minority Health 
and Health Disparities in the National Institutes of 
Health; and 
‘‘(3) the Office of Minority Health in the Cen-
ters for Disease Control and Prevention. 
‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—For the 
purpose of carrying out this section, there are authorized 
to be appropriated such sums as may be necessary for 
each of the fiscal years 2005 through 2010.’’. 
SEC. 608. SAFETY AND EFFECTIVENESS OF DRUGS WITH 
RESPECT TO RACIAL AND ETHNIC BACK-
GROUND. 
(a) IN GENERAL.—Chapter V of the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) is amend-
ed by adding after section 505B the following: 
‘‘SEC. 505C. SAFETY AND EFFECTIVENESS OF DRUGS WITH 
RESPECT TO RACIAL AND ETHNIC BACK-
GROUND. 
‘‘(a) PRE-APPROVAL STUDIES.—If there is evidence 
that there may be a disparity on the basis of racial or
380
ethnic background as to the safety or effectiveness of a 
drug, then—
‘‘(1)(A) the investigations required under sec-
tion 505(b)(1)(A) shall include adequate and well-
controlled investigations of the disparity; or 
‘‘(B) the evidence required under section 351(a) 
of the Public Health Service Act for approval of a 
biologics license application for the drug shall in-
clude adequate and well-controlled investigations of 
the disparity; and 
‘‘(2) if the investigations confirm that there is 
a disparity, the labeling of the drug shall include ap-
propriate information about the disparity. 
‘‘(b) POST-MARKET STUDIES.—
‘‘(1) IN GENERAL.—If there is evidence that 
there may be a disparity on the basis of racial or 
ethnic background as to the safety or effectiveness 
of a drug for which there is an approved application 
under section 505 or a license under section 351 of 
the Public Health Service Act, the Secretary may by 
order require the holder of the approved application 
or license to conduct, by a date specified by the Sec-
retary, post-marketing studies to investigate the dis-
parity.
381
‘‘(2) LABELING.—If the Secretary determines 
that the post-market studies confirm that there is a 
disparity described in paragraph (1), the labeling of 
the drug shall include appropriate information about 
the disparity. 
‘‘(3) STUDY
DESIGN.—The Secretary may 
specify all aspects of study design, including the 
number of studies and study participants, in the 
order requiring post-market studies of the drug. 
‘‘(4) MODIFICATIONS OF STUDY DESIGN.—The 
Secretary may by order modify any aspect of the 
study design as necessary after issuing an order 
under paragraph (1). 
‘‘(5) STUDY RESULTS.—The results from stud-
ies required under paragraph (1) shall be submitted 
to the Secretary as supplements to the drug applica-
tion or biological license application. 
‘‘(c) DISPARITY.—The term ‘evidence that there may 
be a disparity on the basis of racial or ethnic background 
for adult and pediatric populations as to the safety or ef-
fectiveness of a drug’ includes—
‘‘(1) evidence that there is a disparity on the 
basis of racial or ethnic background as to safety or 
effectiveness of a drug in the same chemical class as 
the drug;
382
‘‘(2) evidence that there is a disparity on the 
basis of racial or ethnic background in the way the 
drug is metabolized; and 
‘‘(3) other evidence as the Secretary may deter-
mine. 
‘‘(d) APPLICATIONS UNDER SECTION 505(b)(2) AND 
505(j).—
‘‘(1) IN GENERAL.—A drug for which an appli-
cation has been submitted or approved under section 
505(j) shall not be considered ineligible for approval 
under that section or misbranded under section 502 
on the basis that the labeling of the drug omits in-
formation relating to a disparity on the basis of ra-
cial or ethnic background as to the safety or effec-
tiveness of the drug, whether derived from investiga-
tions or studies required under this section or de-
rived from other sources, when the omitted informa-
tion is protected by patent or by exclusivity under 
clause (iii) or (iv) of section 505(j)(5)(D). 
‘‘(2) LABELING.—Notwithstanding clauses (iii) 
and (iv) of section 505(j)(5)(D), the Secretary may 
require that the labeling of a drug approved under 
section 505(j) that omits information relating to a 
disparity on the basis of racial or ethnic background 
as to the safety or effectiveness of the drug include
383
a statement of any appropriate contraindications, 
warnings, or precautions related to the disparity 
that the Secretary considers necessary.’’. 
(b) ENFORCEMENT.—Section 502 of the Federal 
Food, Drug, and Cosmetic Act (21 U.S.C. 352) is amend-
ed by adding at the end the following: 
‘‘(w)(1) If it is a drug and the holder of the approved 
application under section 505 or license under section 351 
of the Public Health Service Act for the drug has failed 
to complete the investigations or studies, or comply with 
any other requirement, of section 505C.’’. 
(c) DRUG FEES.—Section 736(a)(1)(A)(ii) of the 
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379h) 
is amended by adding after ‘‘required’’ the following: ‘‘, 
including supplements required under section 505C of the 
Act’’. 
SEC. 609. UNITED STATES COMMISSION ON CIVIL RIGHTS. 
(a) COORDINATION WITHIN DEPARTMENT OF JUS-
TICE
OF
ACTIVITIES
REGARDING
HEALTH
DISPARI-
TIES.—Section 3 of the Civil Rights Commission Act of 
1983 (42 U.S.C. 1975a) is amended—
(1) in paragraph (1)(B), by striking ‘‘and’’ at 
the end;
384
(2) in paragraph (2), in the matter after and 
below subparagraph (D), by striking the period and 
inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(3) shall, with respect to activities carried out 
in healthcare and correctional facilities toward the 
goal of eliminating health disparities between the 
general population and members of racial or ethnic 
minority groups, coordinate such activities of—
‘‘(A) the Office for Civil Rights within the 
Department of Justice; 
‘‘(B) the Office of Justice Programs within 
the Department of Justice; 
‘‘(C) the Office for Civil Rights within the 
Department of Health and Human Services; 
and 
‘‘(D) the Office of Minority Health within 
the Department of Health and Human Services 
(headed by the Deputy Assistant Secretary for 
Minority Health).’’. 
(b) AUTHORIZATION OF APPROPRIATIONS.—Section 
5 of the Civil Rights Commission Act of 1983 (42 U.S.C. 
1975c) is amended by striking the first sentence and in-
serting the following: ‘‘For the purpose of carrying out 
this Act, there are authorized to be appropriated
385
$30,000,000 for fiscal year 2005, and such sums as may 
be necessary for each of the fiscal years 2006 through 
2010.’’. 
SEC. 610. SENSE OF CONGRESS CONCERNING FULL FUND-
ING OF ACTIVITIES TO ELIMINATE RACIAL 
AND ETHNIC HEALTH DISPARITIES. 
(a) FINDINGS.—Congress makes the following find-
ings: 
(1) The health status of the American populace 
is declining and the United States currently ranks 
below most industrialized nations in health status 
measured by longevity, sickness, and mortality. 
(2) Within the spectrum of declining health, ra-
cial and ethnic minority populations tend to be in 
the poorest of health and face substantial cultural, 
social, and economic barriers to obtaining quality 
healthcare. 
(3) The problems affecting minority health have 
been exacerbated by the fact that adequate resources 
(funding, staffing, stewardship, and accountability) 
have not been devoted to initiatives designed to ex-
amine and eliminate racial and ethnic disparities in 
health. 
(b) SENSE OF CONGRESS.—It is the sense of Con-
gress that—
386
(1) funding should be doubled by fiscal year 
2005 for the National Center for Minority Health 
Disparities, the Office of Civil Rights in the Depart-
ment of Health and Human Services, the National 
Institute of Nursing Research, and the Office of Mi-
nority Health; 
(2) adequate funding by fiscal year 2005, and 
subsequent funding increases, should be provided for 
health professions training programs, the Racial and 
Ethnic Approaches to Community Health (REACH) 
at the Center for Disease Control and Prevention, 
the Minority HIV/AIDS Initiative, and the Excel-
lence Centers to Eliminate Ethnic/Racial Disparities 
(EXCEED) Program at the Agency for Healthcare 
Research and Quality; 
(3) current and newly-created health disparity 
elimination incentives, programs, agencies, and de-
partments under this Act (and the amendments 
made by this Act) should receive adequate staffing 
and funding by fiscal year 2005; and 
(4) stewardship and accountability should be 
provided by Congress and the President for health 
disparity elimination.
387
TITLE 
VII—STRENGTHENING 
HEALTH INSTITUTIONS THAT 
PROVIDE 
HEALTHCARE 
TO 
MINORITY POPULATIONS 
SEC. 701. AMENDMENT TO THE PUBLIC HEALTH SERVICE 
ACT. 
Title XXIX of the Public Health Service Act, as 
amended by section 602, is further amended by adding 
at the end the following: 
‘‘Subtitle G—Strengthening Health 
Institutions 
That 
Provide 
Healthcare to Minority Popu-
lations 
‘‘CHAPTER 1—GENERAL PROGRAMS 
‘‘SEC. 2971. GRANT SUPPORT FOR QUALITY IMPROVEMENT 
INITIATIVES. 
‘‘(a) IN GENERAL.—The Secretary, in collaboration 
with the Administrator of the Health Resources and Serv-
ices Administration, the Director of the Agency for 
Healthcare Research and Quality, and the Administrator 
of the Centers for Medicare and Medicaid Services, shall 
award grants to eligible entities for the conduct of dem-
onstration projects to improve the quality of and access 
to healthcare.
388
‘‘(b) ELIGIBILITY.—To be eligible to receive a grant 
under subsection (a), an entity shall—
‘‘(1) be a health center, hospital, health plan, 
health system, community clinic. or other health en-
tity determined appropriate by the Secretary—
‘‘(A) that, by legal mandate or explicitly 
adopted mission, provides patients with access 
to services regardless of their ability to pay; 
‘‘(B) that provides care or treatment for a 
substantial number of patients who are unin-
sured, are receiving assistance under a State 
program under title XIX of the Social Security 
Act, or are members of vulnerable populations, 
as determined by the Secretary; and 
‘‘(C)(i) with respect to which, not less than 
50 percent of the entity’s patient population is 
made up of racial and ethnic minorities; or 
‘‘(ii) that—
‘‘(I) serves a disproportionate percent-
age of local, minority racial and ethnic pa-
tients, or that has a patient population, at 
least 50 percent of which is limited English 
proficient; and 
‘‘(II) provides an assurance that 
amounts received under the grant will be
389
used only to support quality improvement 
activities in the racial and ethnic popu-
lation served; and 
‘‘(2) prepare and submit to the Secretary an 
application at such time, in such manner, and con-
taining such information as the Secretary may re-
quire. 
‘‘(c) PRIORITY.—In awarding grants under sub-
section (a), the Secretary shall give priority to applicants 
under subsection (b)(2) that—
‘‘(1) demonstrate an intent to operate as part 
of a healthcare partnership, network, collaborative, 
coalition, or alliance where each member entity con-
tributes to the design, implementation, and evalua-
tion of the proposed intervention; or 
‘‘(2) intend to use funds to carry out system-
wide changes with respect to healthcare quality im-
provement, including—
‘‘(A) improved systems for data collection 
and reporting; 
‘‘(B) innovative collaborative or similar 
processes; 
‘‘(C) group programs with behavioral or 
self-management interventions; 
‘‘(D) case management services;
391
ees under this section for the development of common data 
systems. 
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There 
is authorized to be appropriated to carry out this section, 
such sums as may be necessary for each of fiscal years 
2005 through 2010. 
‘‘SEC. 2971A. CENTERS OF EXCELLENCE. 
‘‘(a) IN GENERAL.—The Secretary, acting through 
the Administrator of the Health Resources and Services 
Administration, shall designate centers of excellence at 
public hospitals, and other health systems serving large 
numbers of minority patients, that—
‘‘(1) 
meet 
the 
requirements 
of 
section 
2971(b)(1); 
‘‘(2) demonstrate excellence in providing care to 
minority populations; and 
‘‘(3) demonstrate excellence in reducing dispari-
ties in health and healthcare. 
‘‘(b) REQUIREMENTS.—A hospital or health system 
that serves as a Center of Excellence under subsection (a) 
shall—
‘‘(1) design, implement, and evaluate programs 
and policies relating to the delivery of care in ra-
cially, ethnically, and linguistically diverse popu-
lations;
392
‘‘(2) provide training and technical assistance 
to other hospitals and health systems relating to the 
provision of quality healthcare to minority popu-
lations; and 
‘‘(3) develop activities for graduate or con-
tinuing medical education that institutionalize a 
focus on cultural competence training for health care 
providers. 
‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There 
is authorized to be appropriated to carry out this section, 
such sums as may be necessary for each of fiscal years 
2005 through 2010. 
‘‘SEC. 2971B. CONSULTATION, CONSTRUCTION AND REN-
OVATION OF AMERICAN INDIAN AND ALASKA 
NATIVE FACILITIES; REPORTS. 
‘‘(a) CONSULTATION.—Prior to the expenditure of, or 
the making of any firm commitment to expend, any funds 
appropriated for the planning, design, construction, or 
renovation of facilities pursuant to the Act of November 
2, 1921 (25 U.S.C. 13) (commonly known as the Snyder 
Act), the Secretary, acting through the Service, shall—
‘‘(1) consult with any Indian tribe that would 
be significantly affected by such expenditure for the 
purpose of determining and, whenever practicable, 
honoring tribal preferences concerning size, location,
393
type, and other characteristics of any facility on 
which such expenditure is to be made; and 
‘‘(2) ensure, whenever practicable, that such fa-
cility meets the construction standards of any na-
tionally recognized accrediting body by not later 
than 1 year after the date on which the construction 
or renovation of such facility is completed. 
‘‘(b) CLOSURE OF FACILITIES.—
‘‘(1) IN GENERAL.—Notwithstanding any provi-
sion of law other than this subsection, no Service 
hospital or outpatient healthcare facility or any inpa-
tient service or special care facility operated by the 
Service, may be closed if the Secretary has not sub-
mitted to the Congress at least 1 year prior to the 
date such proposed closure an evaluation of the im-
pact of such proposed closure which specifies, in ad-
dition to other considerations—
‘‘(A) 
the 
accessibility 
of 
alternative 
healthcare resources for the population served 
by such hospital or facility; 
‘‘(B) the cost effectiveness of such closure; 
‘‘(C) the quality of healthcare to be pro-
vided to the population served by such hospital 
or facility after such closure;
394
‘‘(D) the availability of contract healthcare 
funds to maintain existing levels of service; 
‘‘(E) the views of the Indian tribes served 
by such hospital or facility concerning such clo-
sure; 
‘‘(F) the level of utilization of such hos-
pital or facility by all eligible Indians; and 
‘‘(G) the distance between such hospital or 
facility and the nearest operating Service hos-
pital. 
‘‘(2) TEMPORARY
CLOSURE.—Paragraph (1) 
shall not apply to any temporary closure of a facility 
or of any portion of a facility if such closure is nec-
essary for medical, environmental, or safety reasons. 
‘‘(c) PRIORITY SYSTEM.—
‘‘(1) ESTABLISHMENT.—The Secretary shall es-
tablish a healthcare facility priority system, that 
shall—
‘‘(A) be developed with Indian tribes and 
tribal organizations through negotiated rule-
making; 
‘‘(B) give the needs of Indian tribes the 
highest priority, with additional priority being 
given to those service areas where the health 
status of Indians within the area, as measured
395
by life expectancy based upon the most recent 
data available, is significantly lower than the 
average health status for Indians in all service 
areas; and 
‘‘(C) at a minimum, include the lists re-
quired in paragraph (2)(B) and the method-
ology required in paragraph (2)(E); 
except that the priority of any project established 
under the construction priority system in effect on 
the date of this Act shall not be affected by any 
change in the construction priority system taking 
place thereafter if the project was identified as one 
of the top 10 priority inpatient projects or one of the 
top 10 outpatient projects in the Indian Health 
Service budget justification for fiscal year 2004, or 
if the project had completed both Phase I and Phase 
II of the construction priority system in effect on 
the date of this title. 
‘‘(2) REPORT.—The Secretary shall submit to 
the President and Congress a report that includes—
‘‘(A) a description of the healthcare facility 
priority system of the Service, as established 
under paragraph (1); 
‘‘(B) healthcare facility lists, including—
396
‘‘(i) the total healthcare facility plan-
ning, design, construction and renovation 
needs for Indians; 
‘‘(ii) the 10 top-priority inpatient care 
facilities; 
‘‘(iii) the 10 top-priority outpatient 
care facilities; 
‘‘(iv) the 10 top-priority specialized 
care facilities (such as long-term care and 
alcohol and drug abuse treatment); and 
‘‘(v) any staff quarters associated 
with such prioritized facilities; 
‘‘(C) the justification for the order of pri-
ority among facilities; 
‘‘(D) the projected cost of the projects in-
volved; and 
‘‘(E) the methodology adopted by the Serv-
ice in establishing priorities under its healthcare 
facility priority system. 
‘‘(3) CONSULTATION.—In preparing each report 
required under paragraph (2) (other than the initial 
report) the Secretary shall annually—
‘‘(A) consult with, and obtain information 
on all healthcare facilities needs from, Indian 
tribes and tribal organizations including those
397
tribes or tribal organizations operating health 
programs or facilities under any funding agree-
ment entered into with the Service under the 
Indian Self-Determination and Education As-
sistance Act; and 
‘‘(B) review the total unmet needs of all 
tribes and tribal organizations for healthcare 
facilities (including staff quarters), including 
needs for renovation and expansion of existing 
facilities. 
‘‘(4) CRITERIA.—For purposes of this sub-
section, the Secretary shall, in evaluating the needs 
of facilities operated under any funding agreement 
entered into with the Service under the Indian Self-
Determination and Education Assistance Act, use 
the same criteria that the Secretary uses in evalu-
ating the needs of facilities operated directly by the 
Service. 
‘‘(5) EQUITABLE INTEGRATION.—The Secretary 
shall ensure that the planning, design, construction, 
and renovation needs of Service and non-Service fa-
cilities, operated under funding agreements in ac-
cordance with the Indian Self-Determination and 
Education Assistance Act are fully and equitably in-
tegrated into the healthcare facility priority system.
399
ating the needs of facilities operated directly by the 
Service. 
‘‘(4) EQUITABLE INTEGRATION.—The Secretary 
shall ensure that the planning, design, construction, 
and renovation needs of facilities operated under 
funding agreements, in accordance with the Indian 
Self-Determination and Education Assistance Act, 
are fully and equitably integrated into the develop-
ment of the health facility priority system. 
‘‘(5) ANNUAL
NOMINATIONS.—Each year the 
Secretary shall provide an opportunity for the nomi-
nation of planning, design, and construction projects 
by the Service and all Indian tribes and tribal orga-
nizations for consideration under the healthcare fa-
cility priority system. 
‘‘(e) INCLUSION OF CERTAIN PROGRAMS.—All funds 
appropriated under the Act of November 2, 1921 (25 
U.S.C. 13), for the planning, design, construction, or ren-
ovation of health facilities for the benefit of an Indian 
tribe or tribes shall be subject to the provisions of section 
102 of the Indian Self-Determination and Education As-
sistance Act. 
‘‘(f) INNOVATIVE APPROACHES.—The Secretary shall 
consult and cooperate with Indian tribes, tribal organiza-
tions and urban Indian organizations in developing inno-
400
vative approaches to address all or part of the total unmet 
need for construction of health facilities, including those 
provided for in other sections of this title and other ap-
proaches. 
‘‘(g) LOCATION OF FACILITIES.—
‘‘(1) PRIORITY.—The Bureau of Indian Affairs 
and the Service shall, in all matters involving the re-
organization or development of Service facilities, or 
in the establishment of related employment projects 
to address unemployment conditions in economically 
depressed areas, give priority to locating such facili-
ties and projects on Indian lands if requested by the 
Indian owner and the Indian tribe with jurisdiction 
over such lands or other lands owned or leased by 
the Indian tribe or tribal organization so long as pri-
ority is given to Indian land owned by an Indian 
tribe or tribes. 
‘‘(2) DEFINITION.—In this subsection, the term 
‘Indian lands’ means— 
‘‘(A) all lands within the exterior bound-
aries of any Indian reservation; 
‘‘(B) any lands title to which is held in 
trust by the United States for the benefit of 
any Indian tribe or individual Indian, or held by 
any Indian tribe or individual Indian subject to
401
restriction by the United States against alien-
ation and over which an Indian tribe exercises 
governmental power; and 
‘‘(C) all lands in Alaska owned by any 
Alaska Native village, or any village or regional 
corporation under the Alaska Native Claims 
Settlement Act, or any land allotted to any 
Alaska Native. 
‘‘(h) DEFINITIONS.—For purposes of this section, the 
definitions contained in section 4 of the Indian Health 
Care Improvement Act shall apply. 
‘‘SEC. 
2971C. 
RECONSTRUCTION 
AND 
IMPROVEMENT 
GRANTS FOR PUBLIC HEALTH CARE FACILI-
TIES SERVING PACIFIC ISLANDERS AND THE 
INSULAR AREAS. 
‘‘(a) IN GENERAL.—The Secretary shall provide di-
rect financial assistance to designated healthcare providers 
and community health centers in American Samoa, Guam, 
the Commonwealth of the Northern Mariana Islands, the 
United States Virgin Islands, Puerto Rico, and Hawaii for 
the purposes of reconstructing and improving health care 
facilities and services. 
‘‘(b) ELIGIBILITY.—To be eligible to receive direct fi-
nancial assistance under subsection (a), an entity shall be 
a public health facility or community health center located
402
in American Samoa, Guam, or the Commonwealth of the 
Northern Mariana Islands, the United States Virgin Is-
lands, Puerto Rico, and Hawaii that—
‘‘(1) is owned or operated by—
‘‘(A) the government of American Samoa, 
Guam, or the Commonwealth of the Northern 
Mariana Islands, the United States Virgin Is-
lands, Puerto Rico, and Hawaii or a unit of 
local government; or 
‘‘(B) a nonprofit organization; and 
‘‘(2)(A) provides care or treatment for a sub-
stantial number of patients who are uninsured, re-
ceiving assistance under a State program under a 
title XVIII of the Social Security Act, or a State 
program under title XIX of such Act, or who are 
members of a vulnerable population, as determined 
by the Secretary; or 
‘‘(B) serves a disproportionate percentage of 
local, minority racial and ethnic patients. 
‘‘(c) REPORT.—Not later than 180 days after the 
date of enactment of this title and annually thereafter, the 
Secretary shall submit to the Congress and the President 
a report that includes an assessment of health resources 
and facilities serving populations in American Samoa, 
Guam, and the Commonwealth of the Northern Mariana
403
Islands, the United States Virgin Islands, Puerto Rico, 
and Hawaii. In preparing such report, the Secretary 
shall—
‘‘(1) consult with and obtain information on all 
healthcare facilities needs from the entities described 
in subsection (b); and 
‘‘(2) include all amounts of Federal assistance 
received by each entity in the preceding fiscal year; 
‘‘(3) review the total unmet needs of each juris-
diction for healthcare facilities, including needs for 
renovation and expansion of existing facilities; and 
‘‘(4) include a strategic plan for addressing the 
needs of each jurisdiction identified in the report. 
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 
is authorized to be appropriated such sums as necessary 
to carry out this section. 
‘‘CHAPTER 2—NATIONAL HEALTH SAFETY 
NET INFRASTRUCTURE. 
‘‘Subchapter A—General Provisions 
‘‘SEC. 2972. PAYMENTS TO HEALTHCARE FACILITIES. 
‘‘(a) IN GENERAL.—The Secretary, with the approval 
of the Health Safety Net Infrastructure Trust Fund 
Board of Trustees described in section 2972C(d) (here-
after in this subtitle referred to as the ‘Trust Fund 
Board’), shall make payments, from amounts in the
404
Health Safety Net Infrastructure Trust Fund established 
under section 2972C(a) (hereafter in this subtitle referred 
to as the ‘Trust Fund’), for capital financing assistance 
to eligible healthcare facilities whose applications for as-
sistance have been approved under this subtitle. 
‘‘(b) GENERAL ELIGIBILITY REQUIREMENTS FOR AS-
SISTANCE.—
‘‘(1) ELIGIBLE
HEALTHCARE
FACILITIES
DE-
SCRIBED.—
‘‘(A) IN GENERAL.—A healthcare facility 
shall be generally eligible for capital financing 
assistance under this subtitle if the healthcare 
facility—
‘‘(i) receives an additional payment 
under section 1886(d)(5)(F) of the Social 
Security Act and is described in clause 
(i)(II) or clause (vii)(I) of such section, or 
is deemed a disproportionate share hospital 
under a State plan for medical assistance 
under title XIX of the Social Security Act 
on 
the 
basis 
described 
in 
section 
1923(b)(1) of such Act; 
‘‘(ii) is a hospital which meets the cri-
teria for designation by the Secretary as 
an essential access community hospital
405
under section 1820(i)(1) of such Act or a 
rural primary care hospital under section 
1820(i)(2) of such Act (whether or not 
such hospital is actually designated under 
such section);
‘‘(iii) is a Federally qualified health 
center (as defined in section 1905(l)(2)(B) 
of such Act); 
‘‘(iv) is a hospital which—
‘‘(I) is a sole community pro-
vider; or 
‘‘(II) has closed within the pre-
ceding 12 months; 
‘‘(v) is a facility which—
‘‘(I) provides service to ill or in-
jured individuals prior to the trans-
portation of such individuals to a hos-
pital or provides inpatient care to in-
dividuals needing such care for a pe-
riod not longer than 96 hours; 
‘‘(II) is located in a county (or 
equivalent unit of local government) 
with fewer than 6 residents per 
square mile or is located more than
406
35 road miles from the nearest hos-
pital; 
‘‘(III) permits a physician assist-
ant or nurse practitioner to admit and 
treat patients under the supervision of 
a physician not present in such facil-
ity; and 
‘‘(IV) has obtained a waiver from 
the Secretary permitting the facility 
to participate in the medicare pro-
gram under title XVIII of the Social 
Security Act; or 
‘‘(vi) is a hospital that the Secretary 
otherwise determines to be an appropriate 
recipient of assistance under this subtitle 
on the basis of the existence of a patient 
care operating deficit, a demonstrated in-
ability to secure or repay financing for a 
qualifying project on reasonable terms, or 
such other criteria as the Secretary con-
siders appropriate. 
‘‘(B) DEVELOPMENT
OF
CRITERIA.—For 
purposes of subparagraph (A)(vi), with respect 
to rural hospitals which are at risk or critical 
to healthcare access, the Prospective Payment
407
Review Commission, not later than January 1, 
1994, shall develop criteria to assist the Sec-
retary in deciding if such hospitals deserve as-
sistance, after considering, at a minimum, the 
following factors: 
‘‘(i) AT-RISK RURAL HOSPITALS.—In 
the case of rural hospitals the closure of 
which within the next year is imminent or 
the continued operation of which over a 2- 
to 5-year period is questionable, such fac-
tors as the level of health resources avail-
able in a community as measured by physi-
cian supply, the population base of the 
area served by the hospital and utilization 
of services by such population as measured 
by service area population, and financial 
indicators predictive of closure. 
‘‘(ii) RURAL HOSPITALS CRITICAL TO 
HEALTHCARE
ACCESS.—In the case of 
rural hospitals which provide access to es-
sential health services within a service area 
where no other provider of such essential 
services exists, such factors as the market 
share of the hospital for an area or popu-
lation, the number of outpatient visits, the
408
proximity of the next closest provider of 
such services, and the degree to which the 
area population is medically underserved. 
‘‘(2) OWNERSHIP REQUIREMENTS.—In order to 
be eligible for assistance under this subtitle, a 
healthcare facility (other than a healthcare facility 
described in clauses (ii) and (v) of paragraph (1)) 
must—
‘‘(A) be owned or operated by a unit of 
State or local government; 
‘‘(B) be a quasi-public corporation, defined 
as a private, nonprofit corporation or public 
benefit corporation which is formally granted 
one or more governmental powers by legislative 
action through (or is otherwise partially funded 
by) the State legislature, city or county council; 
‘‘(C) be a private nonprofit healthcare fa-
cility which has contracted with, or is otherwise 
funded by, a governmental agency to provide 
healthcare services to low income individuals 
not eligible for assistance under title XVIII or 
title XIX of the Social Security Act, where rev-
enue from such contracts constitute at least 10 
percent of the facility’s operating revenues over 
the prior 3 fiscal years; or
409
‘‘(D) be a nonprofit small rural healthcare 
facility (as determined by the Secretary).
‘‘(3) PRIORITY.—In making payments under 
this section, the Secretary shall give priority to eligi-
ble healthcare entities that are federally qualified 
health centers (as defined in section 1905(l)(2)(B) 
of the Social Security Act), or other similar entities 
at least 50 percent of the patients of which are mi-
nority or low-income individuals. 
‘‘(c) MEETING ADDITIONAL SPECIFIC CRITERIA.—
Healthcare facilities that are generally eligible for assist-
ance under this subtitle under subsection (b) may apply 
for the specific programs described in this subtitle and 
must meet any additional criteria for participation in such 
programs. 
‘‘(d) ASSISTANCE AVAILABLE.—Capital financing as-
sistance available under this subtitle shall include loan 
guarantees, interest rate subsidies, matching loans and di-
rect grants. Healthcare facilities determined to be gen-
erally eligible for assistance under this subtitle may apply 
for and receive more than one type of assistance under 
this subtitle.
410
‘‘SEC. 2972A. APPLICATION FOR ASSISTANCE. 
‘‘(a) IN GENERAL.—No healthcare facilities may re-
ceive assistance for a qualifying project under this subtitle 
unless the healthcare facility—
‘‘(1) has filed with the Secretary, in a form and 
manner specified by the Secretary, with the advice 
and approval of the Trust Fund Board (as described 
in section 2972C(d)), an application for assistance 
under this subtitle; 
‘‘(2) establishes in its application (for its most 
recent cost reporting period) that it meets the cri-
teria for general eligibility under this subtitle; 
‘‘(3) includes a description of the project, in-
cluding the community in which it is located, and 
describes utilization and services characteristics of 
the project and the healthcare facility, and the pa-
tient population that is to be served; 
‘‘(4) describes the extent to which the project 
will include the financial participation of State and 
local governments if assistance is granted under this 
subtitle, and all other sources of financing sought 
for the project; and 
‘‘(5) establishes, to the satisfaction of the Sec-
retary and the Trust Fund Board, that the project 
meets the additional criteria for each type of capital 
financing assistance for which it is applying.
411
‘‘(b) CRITERIA FOR APPROVAL.—The Secretary, with 
the approval of the Trust Fund Board, shall determine 
for each application for assistance under this subtitle—
‘‘(1) whether the healthcare facility meets the 
general eligibility criteria under section 2972(b); 
‘‘(2) whether the healthcare facility meets the 
specific eligibility criteria of each type of assistance 
for which it has applied, including whether the 
healthcare facility meets any criteria for priority 
consideration for the type of assistance for which it 
has applied; 
‘‘(3) whether the capital project for which as-
sistance is being requested is a qualifying project 
under this subtitle; and 
‘‘(4) whether funds are available, pursuant to 
the limitations of each program, to fully fund the re-
quest for assistance. 
‘‘(c) PRIORITY OF APPLICATIONS.—In addition to 
meeting the criteria otherwise described in this subtitle, 
at the discretion of the Trust Fund Board, the Secretary 
shall give preference to those applications for qualifying 
projects that—
‘‘(1)(A) are necessary to bring existing safety 
net healthcare facilities into compliance with accredi-
tation standards of fire and life safety, seismic, or
412
other related Federal, State or local regulatory 
standards; 
‘‘(B) improve the provision of essential services 
such as emergency medical and trauma services, 
AIDS and infectious disease, perinatal, burn, pri-
mary care, and other services which the Trust Fund 
Board may designate; or 
‘‘(C) provide access to otherwise unavailable es-
sential health services to the indigent and other 
needy persons within the healthcare facility’s terri-
torial area; 
‘‘(2) include specific State or local governmental 
or other non-Federal assurances of financial support 
if assistance for a qualifying project is granted 
under this subtitle; and 
‘‘(3) are unlikely to be financed without assist-
ance granted under this subtitle. 
‘‘(d) SUBMISSION OF APPLICATIONS.—Applications 
under this subtitle shall be submitted to the Secretary 
through the Trust Fund Board. If two or more healthcare 
facilities join in the project, the application shall be sub-
mitted by all participating healthcare facilities jointly. 
Such applications shall set forth all of the descriptions, 
plans, specifications, and assurances as required by this
413
subtitle and contain other such information as the Trust 
Fund Board shall require. 
‘‘(e) OPPORTUNITY FOR APPEAL.—The Trust Fund 
Board shall afford a healthcare facility applying for a loan 
guarantee under this section an opportunity for a hearing 
if the guarantee is denied. 
‘‘(f) APPLICATIONS
FOR
AMENDMENTS.—Amend-
ment of an approved application shall be subject to ap-
proval in the same manner as an original application. 
‘‘SEC. 2972B. PUBLIC SERVICE RESPONSIBILITIES. 
‘‘(a) IN GENERAL.—Any healthcare facility accepting 
capital financing assistance under this subtitle shall 
agree—
‘‘(1) to make the services of the facility or por-
tion thereof to be constructed, acquired, or modern-
ized available to all persons; and 
‘‘(2) to provide a significant volume of services 
to persons unable to pay therefore, consistent with 
other provisions of this Act and the amount of as-
sistance received under this subtitle. 
‘‘(b) ENFORCEMENT.—The Director of the Office for 
Civil Rights of the Department of Health and Human 
Services shall be given the power to enforce the public 
service responsibilities described in this section.
414
‘‘SEC. 2972C. HEALTH SAFETY NET INFRASTRUCTURE 
TRUST FUND. 
‘‘(a) CREATION OF TRUST FUND.—There is estab-
lished in the Treasury of the United States a trust fund 
to be known as the Health Safety Net Infrastructure 
Trust Fund, consisting of such amounts as may be trans-
ferred, appropriated, or credited to such Trust Fund as 
provided in this subtitle. 
‘‘(b) AUTHORIZATION
OF
APPROPRIATIONS
TO 
TRUST FUND.—There are authorized to be appropriated 
to the Trust Fund such sums as may be necessary to carry 
out the purposes of this subtitle. 
‘‘(c) EXPENDITURES FROM TRUST FUND.—Amounts 
in the Trust Fund shall be available, pursuant to appro-
priations Acts, only for making expenditures to carry out 
the purposes of this subtitle. 
‘‘(d) BOARD OF TRUSTEES; COMPOSITION; MEET-
INGS; DUTIES.—
‘‘(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
415
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 
healthcare facility that meets the general eligi-
bility criteria of this subtitle; 
‘‘(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 subtitle. 
‘‘(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
416
Fund and the Managing Trustee of that Trust 
Fund. 
‘‘SEC. 2972D. 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 subtitle. 
‘‘(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 subtitle. 
‘‘Subchapter B—Loan Guarantees 
‘‘SEC. 2973. PROVISION OF LOAN GUARANTEES TO SAFETY 
NET HEALTHCARE 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-
nancing loans, to non-Federal lenders making loans to eli-
gible healthcare facilities for healthcare 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
417
healthcare facilities eligible for assistance under this sub-
title. 
‘‘SEC. 2973A. ELIGIBLE LOANS. 
‘‘(a) IN GENERAL.—Loan guarantees under this 
chapter are available for loans made to eligible healthcare 
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 healthcare 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 chapter, a healthcare facility must demonstrate 
that the following criteria are met: 
‘‘(1) The healthcare 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 healthcare facility. 
‘‘(3) The applicant agrees to assume the public 
service responsibilities described in section 2972B.
418
‘‘(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-
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.
419
‘‘(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 healthcare facility must meet such 
other additional criteria as the Secretary may im-
pose. 
‘‘(e) STATE OR LOCAL PARTICIPATION.—Projects in 
which State or local governmental entities participate in 
the form of first guarantees of part or all of the total loan 
value shall be given a preference for loan guarantees under 
this chapter. 
‘‘SEC. 2973B. 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 chapter in order to create a cu-
mulative reserve in support of loan guarantees.
420
‘‘(b) LOAN GUARANTEES FOR RURAL HEALTHCARE 
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 healthcare 
facilities, to the extent a sufficient number of applications 
are made by such healthcare 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 
chapter may be allocated to guarantee refinancing loans 
during the year. 
‘‘SEC. 2973C. 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 subtitle, 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 chapter
421
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 
healthcare facility the amount of payments made pursuant 
to any loan guarantee under this chapter, unless the Trust 
Fund Board for good cause waives its right of recovery, 
and the United States shall, upon making any such pay-
ment pursuant to any such loan guarantee be subrogated 
to all of the rights of the recipients of the payments. 
‘‘(d) MODIFICATION OF TERMS.—Loan guarantees 
made under this chapter 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 
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 chapter 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
422
thereon, except for fraud or misrepresentation on the part 
of such applicant or other person. 
‘‘SEC. 2973D. 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 chapter, taking 
into account the availability of the reserves created under 
section 2973B. 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 
under this chapter 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 healthcare facility would 
otherwise have been required to pay if the loan had contin-
ued to be insured until maturity date.
423
‘‘(c) 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 healthcare facilities 
(as described by the Secretary). 
‘‘SEC. 2973E. 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 chapter shall constitute 
a default. 
‘‘(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.
424
‘‘(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.—
‘‘(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
425
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.
‘‘(3) 
LIMITATIONS
ON
AUTHORITY.—Sub-
sections (a) and (b) shall not be construed to apply 
to any contract for hazard insurance, or to any pur-
chase or contract for services or supplies on account 
of such property if the amount thereof does not ex-
ceed $1,000.
‘‘(f) REGULATIONS.—The Trust Fund Board shall 
propose and the Secretary shall promulgate regulations 
governing procedures in the event of a default on a loan 
accepted for insurance under this chapter. 
‘‘Subchapter C—Grants for Urgent Capital 
Needs 
‘‘SEC. 2976. PROVISION OF GRANTS. 
‘‘(a) IN GENERAL.—The Trust Fund Board shall 
make available $400,000,000 in direct grants annually. 
The Secretary, with the approval of the Trust Fund
426
Board, shall make direct grants to eligible healthcare fa-
cilities with urgent capital needs. 
‘‘(b) PURPOSES.—Direct grants shall be available to 
eligible healthcare facilities for 3 types of projects: 
‘‘(1) Emergency certification and licensure 
grants would be available to eligible healthcare facili-
ties that are threatened with closure or loss of ac-
creditation or certification of a facility or of essential 
services as a result of life or safety code violations 
or similar facility or equipment failures. Such grants 
would provide limited funding for repair and renova-
tion where failure to fund would disrupt the provi-
sion of essential public health services such as emer-
gency care. 
‘‘(2) Emergency grants would be available for 
capital renovation, expansion, or replacement nec-
essary to the maintenance or expansion of essential 
safety and health services such as obstetrics, 
perinatal, emergency and trauma, primary care and 
preventive health services. 
‘‘(3) Planning grants would be available to eli-
gible healthcare facilities who require pre-approval 
assistance to meet regulatory requirements related 
to management and finance in order to apply for
427
loans, loan guarantees, and interest subsidies under 
this subtitle. 
‘‘(c) 
PRIORITY
TO
FINANCIALLY
DISTRESSED 
HEALTHCARE FACILITIES.—Priority for direct grants 
under this section would be given to financially distressed 
healthcare facilities (as described by the Secretary). 
‘‘(d) APPLICATION PROCESS.—The Secretary, with 
the approval of the Trust Fund Board, shall create an 
expedited application process for direct grants. 
‘‘SEC. 2976B. ELIGIBLE PROJECTS. 
‘‘(a) MATCHING GRANTS.—
‘‘(1) LIMITATION ON AMOUNT.—Grants for cap-
ital expenditures by eligible healthcare facilities will 
be limited to $25,000,000. 
‘‘(2) MATCHING REQUIREMENT.—At least half 
of the projects funded in a year must receive at least 
50 percent of their funding from State or local 
sources. The remaining projects funded during the 
year could be financed up to 90 percent with a com-
bination of Federal grants and loans. 
‘‘(3) RESERVATION FOR RURAL HEALTHCARE 
FACILITIES.—No less than 20 percent of the grant 
funds in any given year would be reserved for rural 
healthcare facilities, provided that a sufficient num-
ber of applications are approved.
428
‘‘(b) PLANNING GRANTS.—Applicants who can dem-
onstrate general qualification for the direct matching loan, 
loan guarantee, or interest subsidy programs under this 
subtitle or eligibility for mortgage insurance under section 
242 of the National Housing Act will be eligible for a 
grant of up to $500,000 to assist in implementation of 
key budgetary and financial systems as well as manage-
ment and governance restructuring.’’. 
TITLE VIII—MISCELLANEOUS 
PROVISIONS 
SEC. 801. DEFINITIONS. 
For purposes of this Act (including the amendments 
made by this Act other than the amendments made by 
subtitles A through G of title I): 
(1) APPROPRIATE
HEALTHCARE
SERVICES.—
The term ‘‘appropriate healthcare services’’ includes 
services or treatments to address physical, mental, 
and behavioral diseases, conditions, or syndromes. 
The definition contained in this paragraph shall not 
apply for purposes of sections 206 and 606. 
(2) HISPANIC.—The term ‘‘Hispanic’’ means 
individuals whose origin is Mexican, Puerto Rican, 
Cuban, Central or South American, or any other 
Spanish-speaking country.
429
(3) INDIAN.—The term ‘‘Indian’’, unless other-
wise designated, means any person who is a member 
of an Indian tribe 
(4) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 
means any Indian tribe, band, nation, or other orga-
nized group or community, including any Alaska Na-
tive village or group or regional or village corpora-
tion as defined in or established pursuant to the 
Alaska Native Claims Settlement Act (85 Stat. 688) 
(43 U.S.C. 1601 et seq.), which is recognized as eli-
gible for the special programs and services provided 
by the United States to Indians because of their sta-
tus as Indians. 
(5) LIMITED ENGLISH PROFICIENT.—The term 
‘‘limited English proficient’’ with respect to an indi-
vidual means an individual who cannot speak, read, 
write, or understand the English language at a level 
that permits them to interact effectively with clinical 
or nonclinical staff at a healthcare organization. 
(6) MINORITY.—
(A) IN GENERAL.—The terms ‘‘minority’’ 
and ‘‘minorities’’ refer to individuals from a mi-
nority group.
430
(B) POPULATIONS.—The term ‘‘minority’’, 
with respect to populations, refers to racial and 
ethnic minority groups. 
(7) MINORITY
GROUP.—The term ‘‘minority 
group’’ has the meaning given the term ‘‘racial and 
ethnic minority group’’. 
(8) RACIAL AND ETHNIC MINORITY GROUP.—
The term ‘‘racial and ethnic minority group’’ means 
American Indians and Alaska Natives, African 
Americans (including Blacks), Asian Americans, 
Hispanics (including Latinos), and Native Hawai-
ians and other Pacific Islanders. 
(9) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
(10) STATE.—The term ‘‘State’’ means each of 
the several states, the District of Columbia, the 
Commonwealth of Puerto Rico, the Indian tribes, 
the Virgin Islands, Guam, American Samoa, and the 
Commonwealth of the Northern Mariana Islands. 
(11) TRIBAL ORGANIZATION.—The term ‘‘tribal 
organization’’ means the elected governing body of 
any Indian tribe or any legally established organiza-
tion of Indians which is controlled by one or more 
such bodies or by a board of directors elected or se-
lected by one or more such bodies (or elected by the