S.Amdt. 523

SA 523. Mr. REID (for Mr. Kennedy) submitted an amendment intended to
be proposed to amendment SA 98 proposed by Mr. Inouye (for himself and
Mr. Baucus) to the bill H.R. 1, making supplemental appropriations for
job preservation and creation, infrastructure investment, energy
efficiency and science, assistance to the unemployed, and State and
local fiscal stabilization, for fiscal year ending September 30, 2009,
and for other purposes; which was ordered to lie on the table; as
follows:

On page 541, after line 20, insert the following:

SEC. ___. QUALIFIED COMMUNITY HEALTH CENTER BONDS.

(a) Qualified Community Health Center Bonds Treated as
State and Local Bonds.--
(1) In general.--Section 150 is amended by adding at the
end the following new subsection :
``(f) Qualified Community Health Center Bond.--For purposes
of this part and section 103--
``(1) Treatment as state or local bond.--A qualified
community health center bond shall be treated as a State or
local bond.
``(2) Qualified community health center bond defined.--The
term `qualified community health center bond' means a bond
issued as part of an issue by a qualified community health
issuer 95 percent or more of the net proceeds of which are to
be used by a qualified community health organization to
finance capital expenditures with respect to a qualified
community health facility.
``(3) Qualified community health organization defined.--A
qualified community health organization is an organization
which--
``(A) is described in section 501(c)(3) and exempt from tax
under section 501(a),
``(B) is incorporated in a State in which at least one
qualified community health facility owned by such
organization is located, and
``(C) constitutes a health center within the meaning of
section 330 of the Public Health Service Act.
``(4) Qualified community health issuer defined.--The term
`qualified community health issuer' means an entity--
``(A) which is established and owned exclusively by the
National Association of Community Health Centers,
``(B) which is disregarded under section 7701 as an entity
separate from the National Association of Community Health
Centers, and
``(C) one of the primary purposes of which, as set forth in
the documents relating to its formation, is to issue
qualified community health center bonds.
``(5) Qualified community health facility defined.--The
term `qualified community health facility' means property
owned and used by a qualified community health organization
to provide health care services to all residents who request
the provision of health care services the operation of which
is subject to sections 330 and 330A of the Public Health
Service Act.
``(6) Treatment of issuer as other than taxable mortgage
pool.--Neither the National Association of Community Health
Centers, nor a qualified community health issuer, nor any
portion thereof shall be treated as a taxable mortgage pool
under section 7701(i) with respect to any issue of qualified
community health center bonds.''.
(2) Coordination with public approval requirement.--
Subsection (f) of section 147 is amended by adding at the end
the following new paragraph:
``(5) Special rules for qualified community health center
bonds.--In the case of a qualified community health center
bond, any governmental unit in which the qualified community
health facility financed by the qualified community health
center bonds is located may be treated for purposes of
paragraph (2) as the governmental unit on behalf of which
such qualified community health center bonds are issued.''.
(3) No federal guarantee.--Subparagraph (A) of section
149(b)(3) is amended by striking ``or'' at the end of clause
(iii), by striking the period at the end of clause (iv) and
inserting ``, or'' and by adding at the end the following new
clause:
``(v) any guarantee of a qualified community health center
bond for a qualified community health facility which is made
under title XVI of the Public Health Service Act (or a
renewal or extension of a guarantee so made).''.
(4) Effective date.--The amendments made by this section
shall apply to bonds issued after the date of the enactment
of this Act.
(b) Loans and Loan Guarantees Under the Public Health
Service Act.--
(1) Authority for loans and loan guarantees.--Section 1601
of the Public Health Service Act (42 U.S.C. 300q) is
amended--
(A) in subsection (a)(2), by adding at the end the
following:
``(C) In addition to authorizing loan guarantees, the
Secretary may--
``(i) guarantee tax exempt bonds for the purpose of
financing a project of a health center that receives funding
under section 330 located in or serving an area determined by
the Secretary to be a medically underserved area or serving a
special medically underserved population as defined in such
section 330 (referred to in this section as a `health center
project'), and
``(ii) use of such authorized guarantees for health center
projects in conjunction with any credits allowed under the
Internal Revenue Code of 1986, for such health center
project.'';
(B) in subsection (b)--
(i) by striking ``The principal amount of'' and inserting
``(1) Subject to paragraph (2), the principal amount of'';
and
(ii) by adding at the end the following:
``(2) Notwithstanding paragraph (1), a guarantee of a loan
or tax exempt bond issued for the purpose of financing a
health center project, as defined in subsection (a)(2)(C),
shall cover up to 100 per centum of the principal amount and
interest due on such guaranteed loan or tax exempt bond.'';
(C) by redesignating subsection (d) as subsection (e);
(D) by inserting after subsection (c) the following:
``(d) No State (including any State or local government
authority with the power to tax) receiving funds under a
Federal health care program (as defined under section
1128B(f) of the Social Security Act), may impose a tax with
respect to interest earned on bonds issued under this
section.''.
(2) General provisions relating to loan guarantees and
loans.--Section 1602 of the Public Health Service Act (42
U.S.C. 300q-2) is amended--
(A) in subsection (a)(2)--
(i) by redesignating subparagraph (D) as subparagraph (H);

[[Page S1768]]

(ii) in subparagraph (B), by striking ``subparagraph (D)''
and inserting ``subparagraph (H)''; and
(iii) by inserting after subparagraph (C) the following:
``(D) The Secretary shall approve, not later than 30
calendar days of receipt, an application for a loan or a tax
exempt bond guarantee submitted by a health center for a
health center project (as defined in section 1601q(a)(2)(C)),
that is eligible for such guarantee, provided that the health
center has certified, to the best of its knowledge, and
consistent with its annual audit and such application, that
the health center has satisfied or will comply with each of
the following criteria:
``(i) The health center has for at least two out of last
three fiscal years (on the basis of accrual accounting)
received more in revenue (including the amount of Federal
funds in any section 330 grants made in each year to the
health center and all other revenue of any kind received by
the health center in each year) than the expenses of the
health center in each year.
``(ii) The health center will contribute at least 20 per
centum equity to the project in the form of cash
contributions (from cash reserves, grants or capital campaign
proceeds), equity derived as a result of tax credits (which
may be structured as debt during the tax credit compliance
period) or other forms of equity-like contributions.
``(iii)(I) As measured at the fiscal year end of its most
recent fiscal year and on a current year-to-date basis, the
health center's days cash on hand, including Federal grant
funds available for drawdown, must have been/be greater than
30 days.
``(II) In this clause, `days cash on hand' shall be
calculated on an accrual accounting basis according to the
following formula: The sum of unrestricted cash and
investments divided by total operating expenses minus
depreciation divided by 360.
``(iv)(I) The health center's debt service coverage ratio
on a projected basis will not be less than 1.10X in any year.
``(II) In this clause, `debt service coverage ratio' shall
be calculated as the sum of net assets plus interest expense
plus depreciation expense divided by the sum of debt service
and capitalized interest payments due during the period.
``(v)(I) The health center has reasonably projected a
leverage ratio (as measured after the first full year of the
new/improved facility's operation) less than 3.0X.
``(II) In this clause, `leverage ratio' shall be calculated
as total liabilities less new markets tax credit (authorized
under section 45D(f) of the Internal Revenue Code of 1986) or
similar debt components, if any, divided by total net assets.
``(E)(i) Not later than 30 calendar days after the receipt
of a health center's application and certification under
subparagraph (D), the Secretary shall send a letter to the
health center notifying it that the application has been
approved, unless within such 30-day period the Secretary--
``(I) notifies the health center in writing as to why the
Secretary reasonably believes any or all of the foregoing
criteria are not met; and
``(II) provides the health center the opportunity to submit
comments within 30 calendar days of receipt of such notice.
``(ii) Not later than 30 calendar days from the date of
receipt of such comments, the Secretary shall provide a final
decision in writing regarding the comments submitted by the
applicant, including sufficient justification for the
Secretary's decision.
``(F) The Secretary may approve an application for a loan
or a tax exempt bond guarantee submitted by a health center
for a health center project (as defined in section
1601(a)(2)(C)) that is eligible for such guarantee and which
deviates from the criteria set forth in clauses (i) through
(v) of subparagraph (D), provided that the Secretary
determines that such deviation is not material or that the
health center has provided sufficient explanation or
justification for such deviation.
``(G)(i) Upon approval of a loan or tax exempt bond
guarantee for a health center project eligible for such
guarantee, the Secretary shall charge such health center a
closing fee of 50 basis points, which will be put into a
reserve fund to cover direct administrative costs of the
program and to fund a loan loss reserve to support the
guarantee program. Thereafter, the Secretary shall charge
those health centers with loans or tax exempt bonds
guaranteed through the program an annual fee of 50 basis
points, calculated based on the principal amount outstanding
on the guaranteed loan or tax exempt bond.
``(ii) All closing and annual fee proceeds shall be
invested and maintained in an interest-bearing reserve
account until such time as the reserve account reaches 5 per
centum of the outstanding principal amount of loans and tax
exempt bonds guaranteed through the program.
``(iii) If at any time the Secretary determines that, based
on a lack of actual losses resulting from default, the amount
of proceeds held in the reserve account is excessive, the
Secretary may reduce the per centum to be maintained in such
reserve account, calculated based on the outstanding
principal amount of loans and tax exempt bonds guaranteed
through the program.
``(iv) Subject to a determination under clause (iii) of
this subparagraph to reduce the per centum maintained in the
reserve account, any overages in the reserve account that are
attributable to the collection of fee proceeds shall be
rebated annually on a pro rata basis to those health centers
with loans or tax exempt bonds guaranteed through the program
and that are not in default.'';
(B) in subsection (d)--
(i) by redesignating paragraph (2) as paragraph (3);
(ii) by redesignating the matter following paragraph (1)(F)
as paragraph (2)(A); and
(iii) by inserting after paragraph (2)(A), as so
redesignated, the following:
``(B) In addition to the amounts authorized under
subparagraph (A), there are authorized such amounts to
support guarantees of loans or tax exempt bonds issued for
the purpose of financing a health center project, which shall
be added to any amounts derived from the fees required to be
charged under subsection (a)(2)(G) and placed in the same
interest-bearing reserve account established by subsection
(a)(2)(G).''.
(c) Application Davis-Bacon.--The provisions of subchapter
IV of chapter 31 of title 40, United States Code (commonly
referred to as the Davis-Bacon Act) shall apply to any
construction projects carried out using amounts made
available under the amendments made by this section.
(d) Sunset.--
(1) In general.--Except as provided in paragraph (2), this
section and the amendments made by this section shall be in
effect only during the period that begins on the date of
enactment of this Act, and ends on December 31, 2010. On and
after January 1, 2011, the Public Health Service Act and the
Internal Revenue Code of 1985 shall each be applied as if
this section and the amendments made by this section had not
been enacted.
(2) Continued application.--This section and the amendments
made by this section shall continue to apply with respect to
loans, loan guarantees, and bonds issued under the authority
of this section (or such amendments) until the term of such
loan, guarantee, or bond has expired.
______