grants and loan guarantees for construction of teaching facilities for medical, dental, and other health professions personnel; extension of part a

grants and loan guarantees for construction of teaching facilities for medical, dental, and other health professions personnel; extension of part a Sec. 102. (a) Authorization Level.—Section 720 (42 U.S.C. 293) is amended to read as follows: “authorization of appropriations “Sec. 720. (a) There are authorized to be appropriated $225,000,000 for the fiscal year ending June 30, 1972, $250,000,000 for the fiscal year ending June 30, 1973, and $275,000,000 for the fiscal year ending June 30, 1974, for grants under part A of this title for construction of health research facilities and for grants to assist in the construction of teaching facilities for the training of physicians, dentists, pharmacists, optometrists, podiatrists, veterinarians, and professional public health personnel.” (b) Federal Share.— (1) Clause (A) of section 722(a) (1) (42 U.S.C. 293b(a) (1)) is amended (A) by inserting “(i)” immediately before “for a project”, (B) by striking out “and in the case of a grant” and inserting in lieu thereof “(ii)”, (C) by inserting “and (iii) for a project for major remodeling or renovation of an existing facility where such project is required to meet an increase in student enrollment,” immediately before “such amount”, and (D) by striking out “66⅔ per centum” and inserting in lieu thereof “80 per centum”. (2) Clause (B) of such section is amended (A) by striking out “66⅔ per centum” and inserting in lieu thereof “80 per centum”, (B) by striking out “50 per centum” and inserting in lieu thereof “70 per centum”, and (C) by inserting after “unusual circumstances” the following: “(such as a school located in a geographical area of the United States with a critical shortage of health profession manpower)”. (c) Facilities Included.— (1) Section 724(1) (A) (42 U.S.C. 293d(l) (A)) is amended by inserting “the acquisition,” before “remodeling”. (2) Section 724 is amended by striking out paragraph (5) and inserting in lieu thereof the following: 85 Stat. 432 “(5) The term ‘teaching facilities’ means areas dedicated for use by students, faculty, or administrative or maintenance personnel for clinical purposes, research activities, libraries, class-rooms. offices, auditoriums, dining areas, student activities, or other related purposes necessary for, and appropriate to, the conduct of comprehensive programs of education. Such term includes interim facilities but does not include off-site improvements or living quarters. “(6) The term ‘interim facilities’ means teaching facilities designed to provide teaching space on a short-term (less than ten years) basis while facilities of a more permanent nature are being planned and constructed.” (3) Section 724(4) is amended (A) by striking out “doctor of pharmacy” and inserting “an equivalent degree”, and (B) by striking out “doctor of surgical chiropody” and inserting in lieu thereof “an equivalent degree”. (4) Section 724 is further amended by striking out the semicolon at the end of paragraphs (1) and (2) and inserting in lieu thereof a period and by striking out and” at the end of paragraph (4) and inserting in lieu thereof a period. (5) Section 723 (42 U.S.C. 293c) is amended by inserting “(or in the case of interim facilities, within such shorter period as the Secretary shall by regulation prescribe)” immediately after “twenty years”. (d) Loan Guarantees and Interest Subsidies.—Part B is amended by adding after section 728 (42 U.S.C. 293h) the following new section: “loan guarantees and interest subsidies “Sec. 729. (a) To assist nonprofit private entities to carry out approved construction projects for teaching facilities, the Secretary may, during the period beginning July 1, 1971. and ending with the close of June 30, 1974, guarantee (in accordance with this section and subject to subsection (f)) to any non-Federal lender which makes a loan to such an entity for such a project payment when due of the principal of and interest on such loan if such entity is eligible (as determined under regulations of the Secretary) for a grant under this part for such project. The Secretary may make commitments, on behalf of the United States, to make such loan guarantees prior to the making of such loans. No such loan guarantee (1) may, except under such special circumstances and under such conditions as are prescribed by regulations, apply to any amount which, when added to any grant under this part or any other law of the United States, exceeds 90 per centum of the cost of construction of the project, or (2) may apply to more than 90 per centum of the loss of principal of and interest on the loan. “(b) In the case of any nonprofit private entity which is eligible (as determined under regulations of the Secretary) for a grant under this part to assist it in carrying out an approved construction project for teaching facilities after June 30, 1971. and to whom a loan has been made by a non-Federal lender to assist it in carrying out such project, the Secretary, during the period beginning July 1, 1971, and ending with the close of June 30, 1974. may, subject to subsection (f), pay to the holder of such loan (and for and on behalf of the entity which received such loan) amounts sufficient to reduce by not to exceed 3 per centum per annum the net effective interest rate otherwise payable on such loan. “(c) A loan guarantee or interest subsidy payment may be made under this section only upon an application (submitted in such manner 85 Stat. 433and containing such information as the Secretary may by regulations require) approved by the Secretary. The Secretary may not approve an application for a loan guarantee or interest subsidy payment unless he determines that the terms, conditions, 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 otherwise reasonable, including a determination that the rate of interest does not exceed such per centum per annum on the principal obligation out-standing as the Secretary determines to be reasonable, taking into account the range of interest rates prevailing in the private market for similar loans and the risks assumed by the United States. The Secretary may not approve an application for a loan guarantee, unless he determines that the loan would not be available on reasonable terms and conditions without the guarantee under this section. “(d) (1) The United States shall be entitled to recover from the applicant for a loan guarantee under this section the amount of any payment made pursuant to such guarantee, unless the Secretary for good cause waives such right of recovery; and, upon making any such payment, the United States shall be subrogated to all of the rights of the recipient of the payments with respect to which the guarantee was made. “(2) To the extent permitted by paragraph (3), any terms and conditions applicable to a loan guarantee under this section may be modified by the Secretary to the extent he determines it to be consistent with the financial interest of the United States. “(3) Any loan guarantee made by the Secretary pursuant to this section shall be incontestable in the hands of an applicant on whose behalf such guarantee is made, and as to any person who makes or contracts to make a loan to such applicant in reliance thereon, except for fraud or misrepresentation on the part of such applicant or such other person. “(e) There is established in the Treasury a loan guarantee and inter-est subsidy fund (hereinafter in this subsection referred to as the ‘fund’) which shall be available to the Secretary without fiscal year limitation, in such amounts as may be specified from time to time in appropriation Acts, (1) to enable him to discharge his responsibilities under guarantees issued by him under this section, and (2) for interest subsidy payments authorized by this section. There are authorized to be appropriated from time to time such amounts as may be necessary to provide the sums required for the fund; except that the amount appropriated for interest subsidy payments may not exceed $8,000,000 in the fiscal year ending June 30, 1972, $16,000,000 in the fiscal year ending June 30, 1973, and $24,000,000 in the fiscal year ending June 30, 1974. There shall also be deposited in the fund amounts received by the Secretary or other property or assets derived by him from his operations under this section, including any money derived from the sale of assets. If at any time the sums in the fund are insufficient to enable the Secretary to discharge his responsibilities under guarantees issued by him under this section or to make interest subsidy payments authorized by this section, he is authorized to issue to the Secretary of the Treasury notes or other obligations in such forms and denominations, bearing such maturities, and subject to such terms and conditions, as may be prescribed by the Secretary with the approval of the Secretary of the Treasury, but only in such amounts as may be specified from time to time in appropriation Acts. Such notes or other obligations shall bear interest at a rate determined by the Secretary of the Treasury, taking into consideration the current average market yield on outstanding marketable obligations of the United States of comparable maturities during the month preceding the issuance of the notes or other obligations. The Secretary of the Treasury shall 85 Stat. 434 purchase any notes and other obligations issued hereunder and for that purpose he may use as a public debt transaction the proceeds from the sale of any securities issued under the Second Liberty Bond Act, and the purposes for which the securities may be issued under that Act are extended to include any purchase of such notes and obligations. The Secretary of the Treasury may at any time sell any of the notes or other obligations acquired by him under this subsection. All redemptions, purchases, and sales by the Secretary of the Treasury of such notes or other obligations shall be treated as public debt transactions of the United States. Sums borrowed under this subsection shall be deposited in the fund and redemption of such notes and obligations shall be made by the Secretary from the fund. “(f) (1) The cumulative total of the principal of the loans outstanding at any time with respect to which guarantees have been issued under this section may not exceed such limitations as may be specified in appropriation Acts. “(2) In any fiscal year no loan guarantee may be made under subsection (a) and no agreement to make interest subsidy payments may be entered into under subsection (b) if the making of such guarantee or the entering into of such agreement would cause the cumulative total of— “(A) the principal of the loans guaranteed under subsection (a) in such fiscal year, and “(B) the principal of the loans for which no guarantee has been made under subsection (a) and with respect to which an agreement to make interest subsidy payments is entered into under subsection (b) in such fiscal year, to exceed the amount of grant funds obligated under this part in such fiscal year; except that this paragraph shall not apply if the amount of grant funds obligated under this part in such fiscal year equals the sums appropriated for such fiscal year under section 720. “(g) The Secretary, with the consent of the Secretary of Housing and Urban Development, may obtain from the Department of Housing and Urban Development such assistance with respect to the administration of this section as will promote efficiency and economy thereof.” (e) Special Consideration for Certain Projects.—Section 721 (42 U.S.C. 293a) is amended by adding at the end thereof the following: “(e) In the case of applications to aid in the construction of new schools of medicine, osteopathy, or dentistry, the Secretary shall give special consideration to those applications which contain or are reasonably supported by assurances that, because of the use that will be made of existing facilities (including Federal medical or dental facilities), the school will be able to accelerate the date on which it will begin its teaching program.” (f) Eligible Applicants.— (1) Combinations.—Section 721(b)(1) (42 U.S.C. 293a(b) (1)) is amended by inserting a comma before “and (B)” and by inserting before the period at the end the following: “, or (C) any combination of schools which are described in clause (A) and which meet the requirements of clause (B)”. (2) Affiliated hospitals and outpatient facilities.— (A) Paragraphs (2) and (3) of section 721(b) (42 U.S.C. 293a(b)) are amended to read as follows: “(2) Notwithstanding paragraph (1), in the case of an affiliated hospital or affiliated outpatient facility, an application which is approved by the school of medicine, osteopathy, or dentistry with which the hospital or outpatient facility is affiliated and which other-85 Stat. 435wise complies with the. requirements of this part may be filed by any public or other nonprofit agency qualified to file an application under section 605. “(3) In the case of any application, whether filed by a school or, in the case of an affiliated hospital or affiliated outpatient facility, by any other public or other nonprofit agency, for a grant under this part to assist in the construction of a hospital or outpatient facility, as defined in section 645— “(A) if the hospital or outpatient facility is needed in connection with a new school, only that portion of the project to construct the hospital or outpatient facility which the Secretary determines to be reasonably attributable to the need of such school for the facility for teaching purposes, “(B) if the construction is in connection with expansion of the training capacity of an existing school, only that portion of the project to construct the hospital or outpatient facility which the Secretary determines to be reasonably attributable to the need of such school for the facility in order to expand its training capacity, or “(C) if the construction is in connection with renovation or rehabilitation of a hospital or outpatient facility used by an existing school, only that portion of the project which the Secretary determines to be reasonably attributable to the need of such school for the hospital or outpatient facility in order to prevent curtailment of enrollment or quality of training of the school or to meet an increase in student enrollment, shall be regarded as the project with respect to which payments may be made under section 722.” (B) Section 724(3) (42 U.S.C. 293d(3)) is amended to read as follows: “(3) The term ‘affiliated hospital or affiliated outpatient facility’ means a hospital or outpatient facility, as defined in section 645, which is not owned by, but is affiliated (to the extent and in the manner determined in accordance with regulations) with, a school of medicine, osteopathy, or dentistry which meets the eligibility conditions set forth in section 721(b)(1).”. (C) Section 723(a) (42 U.S.C. 293c(a)) is amended by inserting “or outpatient facility” after “hospital”. (g) Consideration of Certain Projects by Section 314 Planning Agencies.—Section 721(c) (42 U.S.C. 293a (c)) is amended (1) by striking out “and” at the end of paragraph (5), (2) by striking out the period at the end of paragraph (6) and inserting in lieu thereof and”, and (3) by adding after paragraph (6) the following new paragraph: “(7) in the case of an application for a project for the construction of a facility intended, at least in part, for the provision of health services, an opportunity has been provided for comment on the project by (A) the State agency administering or supervising the administration of the State plan approved under section 314(a), and (B) the public or nonprofit private agency or organization responsible for the plan or plans referred to in section 314(b) and covering the area in which such project is to be located or if there is no such agency, such other public or nonprofit private agency or organization (if any) as performs, as determined in accordance with criteria of the Secretary, similar functions.” (h) Enrollment Increase.— (1) Section 721(c)(2) (42 U.S.C. 293a(c)(2)) is amended by adding at the end thereof the following new sentence: “If a school applies for a grant in a fiscal year for a construction project to 85 Stat. 436expand its training capacity and if wider paragraph (2) of section 770(f) the school is not required to meet in such fiscal year the enrollment increase prescribed by such section because of limitations of physical facilities, the Secretary, after consultation with the National Advisory Council on Health Professions Education, may waive (in whole or in part) the enrollment increase prescribed by clause (D) of the preceding sentence if the application for such construction project contains or is supported by reasonable assurances satisfactory to the Secretary that the number of first-year students enrolled at such school during the first full school year after the completion of such project and for each of the next nine school years thereafter will be not less than the number of first-year students that such school would be required to enroll under section 770(f) (without regard to paragraph (2) thereof) for a grant under section 770(a).” (2) Section 721(c) (2) is further amended by striking out “section 771(b)” and inserting in lieu thereof “section 770(f)”. (i) Technical Assistance.—Section 728 (42 U.S.C. 293h) is amended to read as follows: “technical assistance “Sec. 728. The Secretary may provide technical assistance (1) to applicants under this part and other public or nonprofit private schools, agencies, organizations, and institutions, and combinations thereof, in designing and planning the construction of any facility for which financial assistance may be provided under this part, and (2) to State or interstate planning agencies established to plan programs for relieving shortages of training capacity for health personnel.” (j) Technical Amendments.— (1) Section 723(a) (42 U.S.C. 293c(a)) is amended by striking out “625” and inserting in lieu thereof “605”. (2) Section 721(c) (3) (42 U.S.C. 293a(c) (3)) is amended to read as follows: “(3) (A) in the case of an application for a grant to assist in the construction of new teaching facilities, such application is for aid in the construction of a new school of medicine, osteopathy, dentistry, pharmacy, optometry, podiatry, veterinary medicine, or public health, or construction which will expand the training capacity of an existing school of medicine, osteopathy, dentistry, pharmacy, optometry, podiatry, veterinary medicine, or public health, or (B) in the case of an application for a grant to assist in the replacement or rehabilitation of existing teaching facilities, such application is for aid in construction which will replace or rehabilitate facilities of, or used by, an existing school of medicine, osteopathy, dentistry, pharmacy, optometry, podiatry, veterinary medicine, or public health, which facilities either are so obsolete as to require the school to curtail substantially either its enrollment or the quality of the training provided (and, for purposes of this part, expansion or curtailment of capacity for continuing education shall also be considered expansion and curtailment, respectively, of training capacity) or are required to meet an increase in student enrollment;” (3) Section 721(c) (6) (42 U.S.C. 293a (c) (6)) is amended by striking out “which is a hospital or diagnostic or treatment center, as defined in section 631” and inserting in lieu thereof “which is a hospital or outpatient facility, as defined in section 645”. (4) Section 722(d) (42 U.S.C. 293b(d)) is amended by striking out “or for medical library purposes (within the meaning of 85 Stat. 437part I of title III)” and inserting in lieu thereof “or for medical library purposes (within the meaning of part J of title III)”. (5) Section 723 (42 U.S.C. 293c) is amended by inserting “or” at the end of paragraph (b). (6) The heading for part B of title VII is amended by inserting “and Loan Guarantees and Interest Subsidies” immediately after “Grants”. (7) (A) Part B (other than section 727 thereof) of title VII is amended by striking out “Surgeon General” each place it occurs and inserting in lieu thereof “Secretary”. (B) Section 722(b) (42 U.S.C. 293b(b)) is amended by striking out “Surgeon General’s” and inserting in lieu thereof “Secretary’s”; section 727(a) (42 U.S.C. 293g(a)) is amended by striking out “The Surgeon General, after consultation with the Council and with the approval of the Secretary” and inserting in lieu thereof “The Secretary, after consultation with the Council”; and section 727(b) (42 U.S.C. 293g(b)) is amended by striking out “The Surgeon General is authorized to make, with the approval of the Secretary” and inserting in lieu thereof “The Secretary may make”. (k) Technical Amendments to Part A.— (1) Section 705(a) (42 U.S.C. 292d(a)) is amended to read as follows: “Sec. 705. (a) The Secretary may from time to time set dates (not earlier than in the fiscal year preceding the year for which a grant is sought) by which applications for grants under this part for any fiscal year must be filed.” (2) (A) Part A of title VII (other than sections 703(a) and 709 thereof) is amended by striking out “Surgeon General” each place it occurs and inserting in lieu thereof “Secretary”. (B) Section 706(b) (42 U.S.C. 292e(b)) is amended by striking out “Surgeon General’s” and inserting in lieu thereof “Secretary’s”. (C) Section 709(a) (42 U.S.C. 29211(a)) is amended by striking out “Surgeon General, after consultation with the Council and with the approval of the Secretary,” and inserting in lieu thereof “Secretary”; and section 709(b) (42 U.S.C. 292h(b)) is amended by striking out “Surgeon General is authorized to make, with the approval of the Secretary,” and inserting in lieu thereof “Secretary may make”.