(Senate - July 27, 2011)

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[Pages S4961-S4962]
From the Congressional Record Online through the Government Publishing Office []


      By Mr. KOHL (for himself, Mr. Conrad, Mr. Thune, Mr. Johnson of 
        South Dakota, Mr. Tester, and Mr. Johanns):
  S. 1431. A bill to amend section 242 of the National Housing Act to 
extend the sunset provisions for the exemption for critical access 
hospitals under the FHA programs of mortgage insurance for hospitals; 
to the Committee on Banking, Housing, and Urban Affairs.
  Mr. KOHL. Mr. President, I rise today to discuss the Health Care 
Capital Access Reauthorization Act. This

[[Page S4962]]

legislation will allow Critical Access Hospitals, CAHs, to continue to 
access the Federal Housing Administration's, FHA, 242 program.
  There are approximately 1,327 CAHs throughout the United States. 
These hospitals are vital to our health care system because they 
provide individuals who live in rural areas care they might not 
otherwise have. Many of these hospitals were built over 40 years ago 
and are in need of significant renovations. Without the exemption, many 
rural hospitals would not qualify for the low-cost loan insurance based 
on patients' average length of stay or because the hospital operates a 
nursing home, and as a result, many rural hospitals would face higher 
financing costs on construction and renovation loans.
  Many CAHs provide a significant level of non-acute or long-term 
services, and therefore do not qualify for the FHA 242 program based on 
length of stay. Additionally, some CAHs operate nursing homes, further 
lengthening the average stay and causing the hospital to be ineligible 
for the 242 program. In 2006, Congress recognized the uniqueness and 
importance of these hospitals and passed the Rural Health Care Capital 
Access Act. This Act provided an exemption from the acute care 
provision in the FHA 242 program for Critical Access Facilities. The 
exemption expires on July 31.
  After July 31, CAHs applying for financing will be unable to receive 
financing if the exemption is not extended. Since the initial exemption 
was passed in 2006, 10 rural hospitals in 10 states have received 
mortgage insurance through the program as a result of the exemption in 
Edgerton, Wis., Columbus, Mont., Springfield, Ga., Monticello, Ill., 
L'Anse, Mich., Cambridge, Neb., Hot Springs, S.D., Grand Coulee, Wash., 
Moab, Utah and Holyoke, Colo. The program has provided financing for 
these hospitals on loans ranging from $14 to $31 million and totaling 
more than $241 million.
  The legislation I am introducing today would provide a five-year 
extension of the exemption in the Rural Health Care Capital Access Act, 
allowing the many rural hospitals that provide significant levels of 
non-acute or long-term care to continue applying for financing under a 
FHA 242 program. Without the exemption, these rural hospitals would not 
qualify for an FHA loan based on patients' average length of stay, 
resulting in fewer options for construction and renovation loans.
  I would like to thank the original coponsors of this bill: Senators 
Conrad, Tim Johnson, Thune, Johanns, and Tester for their leadership 
and support for Critical Access Hospitals. I look forward to working 
with my colleagues on this important issue to move the Rural Health 
Care Capital Access Reauthorization Act towards passage.