42 U.S.C. § 291i — Recovery of expenditures under certain

Page 977 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 291i 1 So in original. The period probably should be a comma. 107; July 12, 1954, ch. 471, § 4(g), 68 Stat. 466; Aug. 28, 1958, Pub. L. 85–791, § 27, 72 Stat. 950, prior to the gen- eral amendment of this subchapter by Pub. L. 88–443. Statutory Notes and Related Subsidiaries CHANGE OF NAME ‘‘Secretary of Health and Human Services’’ sub- stituted for ‘‘Secretary of Health, Education, and Wel- fare’’ pursuant to section 509(b) of Pub. L. 96–88, which is classified to section 3508(b) of Title 20, Education. Executive Documents TRANSFER OF FUNCTIONS Office of Surgeon General abolished by section 3 of Reorg. Plan No. 3 of 1966, eff. June 25, 1966, 31 F.R. 8855, 80 Stat. 1610, and functions thereof transferred to Sec- retary of Health, Education, and Welfare by section 1 of Reorg. Plan No. 3 of 1966, set out as a note under sec- tion 202 of this title. Office of Surgeon General reestab- lished within the Office of the Assistant Secretary for Health, see Notice of Department of Health and Human Services, Office of the Assistant Secretary for Health, Mar. 30, 1987, 52 F.R. 11754. § 291i. Recovery of expenditures under certain conditions (a) Persons liable If any facility with respect to which funds have been paid under section 291f of this title shall, at any time within 20 years after the com- pletion of construction or modernization— (1) be sold or transferred to any entity (A) which is not qualified to file an application under section 291e of this title, or (B) which is not approved as a transferee by the State agency designated pursuant to section 291d of this title, or its successor, or (2) cease to be a public health center or a public or other nonprofit hospital, outpatient facility, facility for long-term care, or reha- bilitation facility, the United States shall be entitled to recover, whether from the transferor or the transferee (or, in the case of a facility which has ceased to be public or nonprofit, from the owners thereof) an amount determined under subsection (c). (b) Notice to Secretary The transferor of a facility which is sold or transferred as described in subsection (a)(1), or the owner of a facility the use of which is changed as described in subsection (a)(2), shall provide the Secretary written notice of such sale, transfer, or change not later than the expi- ration of 10 days from the date on which such sale, transfer, or change occurs. (c) Amount of recovery; interest; interest period (1) Except as provided in paragraph (2), the amount the United States shall be entitled to recover under subsection (a) is an amount bear- ing the same ratio to the then value (as deter- mined by the agreement of the parties or in an action brought in the district court of the United States for the district for which the fa- cility involved is situated) of so much of the fa- cility as constituted an approved project or projects as the amount of the Federal participa- tion bore to the cost of the construction or mod- ernization of such project or projects. (2)(A) After the expiration of— (i) 180 days after the date of the sale, trans- fer, or change of use for which a notice is re- quired by subsection (b), in the case of a facil- ity which is sold or transferred or the use of which changes after July 18, 1984, or (ii) thirty days after July 18, 1984, or if later 180 days after the date of the sale, transfer, or change of use for which a notice is required by subsection (b), in the case of a facility which was sold or transferred or the use of which changed before July 18, 1984.1 the amount which the United States is entitled to recover under paragraph (1) with respect to a facility shall be the amount prescribed by para- graph (1) plus interest, during the period de- scribed in subparagraph (B), at a rate (deter- mined by the Secretary) based on the average of the bond equivalent of the weekly ninety-day Treasury bill auction rate. (B) The period referred to in subparagraph (A) is the period beginning— (i) in the case of a facility which was sold or transferred or the use of which changed before July 18, 1984, thirty days after such date or if later 180 days after the date of the sale, trans- fer, or change of use for which a notice is re- quired by subsection (b), (ii) in the case of a facility with respect to which notice is provided in accordance with subsection (b), upon the expiration of 180 days after the receipt of such notice, or (iii) in the case of a facility with respect to which such notice is not provided as pre- scribed by subsection (b), on the date of the sale, transfer, or change of use for which such notice was to be provided, and ending on the date the amount the United States is entitled to under paragraph (1) is col- lected. (d) Waiver (1) The Secretary may waive the recovery rights of the United States under subsection (a)(1) with respect to a facility in any State if the Secretary determines, in accordance with regulations, that the entity to which the facility was sold or transferred— (A) has established an irrevocable trust— (i) in an amount equal to the greater of twice the cost of the remaining obligation of the facility under clause (2) of section 291c(e) of this title or the amount, determined under subsection (c), that the United States is entitled to recover, and (ii) which will only be used by the entity to provide the care required by clause (2) of section 291c(e) of this title; and (B) will meet the obligation of the facility under clause (1) of section 291c(e) of this title. (2) The Secretary may waive the recovery rights of the United States under subsection (a)(2) with respect to a facility in any State if the Secretary determines, in accordance with regulations, that there is good cause for waiving such rights with respect to such facility. (e) Lien The right of recovery of the United States under subsection (a) shall not constitute a lien Page 978 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 291j on any facility with respect to which funds have been paid under section 291f of this title. (July 1, 1944, ch. 373, title VI, § 609, as added Pub. L. 88–443, § 3(a), Aug. 18, 1964, 78 Stat. 456; amend- ed Pub. L. 91–296, title I § 116(d), June 30, 1970, 84 Stat. 342; Pub. L. 98–369, div. B, title III, § 2381(a), July 18, 1984, 98 Stat. 1112.) Editorial Notes PRIOR PROVISIONS A prior section 291i, act July 1, 1944, ch. 373, title VI, § 631, as added Aug. 13, 1946, ch. 958, § 2, 60 Stat. 1041; amended June 19, 1948, ch. 544, 62 Stat. 531; Oct. 25, 1949, ch. 722, § 9, 63 Stat. 901; July 12, 1954, ch. 471, § 4(c)–(f), 68 Stat. 465, 466; Aug. 1, 1956, ch. 852, § 19(a), (b), 70 Stat. 911; June 25, 1959, Pub. L. 86–70, § 31(c), 73 Stat. 149; July 12, 1960, Pub. L. 86–624, § 29(d), 74 Stat. 419; Oct. 5, 1961, Pub. L. 87–395, § 5, 75 Stat. 826; Sept. 25, 1962, Pub. L. 87–688, § 4(a)(2), 76 Stat. 587, related to allotment per- centages, and contained various definitions, prior to the general amendment of this subchapter by Pub. L. 88–443. See section 291b of this title. Provisions similar to those comprising this section were contained in section 291h(e) of this title, act July 1, 1944, ch. 373, title VI, § 625, as added Aug. 13, 1946, ch. 958, § 2, 60 Stat. 1041; amended Oct. 25, 1949, ch. 722, § 3(c), 63 Stat. 899, 901; July 12, 1954, ch. 471, § 4(b), 68 Stat. 464, prior to the general amendment of this sub- chapter by Pub. L. 88–443. AMENDMENTS 1984—Pub. L. 98–369 amended section generally. Prior to amendment, section read as follows: ‘‘If any facility with respect to which funds have been paid under sec- tion 291f of this title shall, at any time within twenty years after the completion of construction— ‘‘(a) be sold or transferred to any person, agency, or organization (1) which is not qualified to file an ap- plication under section 291e of this title, or (2) which is not approved as a transferee by the State agency designated pursuant to section 291d of this title, or its successor, or ‘‘(b) cease to be a public health center or a public or other nonprofit hospital, outpatient facility, facil- ity for long-term care, or rehabilitation facility, un- less the Surgeon General determines, in accordance with regulations, that there is good cause for releas- ing the applicant or other owner from this obligation, the United States shall be entitled to recover from ei- ther the transferor or the transferee (or, in the case of a facility which has ceased to be public or nonprofit, from the owners thereof) an amount bearing the same ratio to the then value (as determined by the agree- ment of the parties or by action brought in the district court of the United States for the district in which the facility is situated) of so much of the facility as con- stituted an approved project or projects, as the amount of the Federal participation bore to the cost of the con- struction or modernization under such project or projects. Such right of recovery shall not constitute a lien upon said facility prior to judgment.’’ 1970—Cl. (b). Pub. L. 91–296 substituted ‘‘outpatient facility’’ for ‘‘diagnostic or treatment center’’. Statutory Notes and Related Subsidiaries CHANGE OF NAME ‘‘Secretary of Health and Human Services’’ sub- stituted for ‘‘Secretary of Health, Education, and Wel- fare’’ in subsecs. (b), (c), and (d) pursuant to section 509(b) of Pub. L. 96–88, which is classified to section 3508(b) of Title 20, Education. REGULATIONS AND PERSONNEL Pub. L. 98–369, div. B, title III, § 2381(c), July 18, 1984, 98 Stat. 1116, provided that: ‘‘Not later than the expira- tion of the one-hundred-and-eighty-day period begin- ning on the date of the enactment of this section [July 18, 1984], the Secretary shall have in effect regulations and personnel to place in effect the amendments made by this section [amending sections 291i and 300s–1a of this title].’’ Executive Documents TRANSFER OF FUNCTIONS Office of Surgeon General abolished by section 3 of Reorg. Plan No. 3 of 1966, eff. June 25, 1966, 31 F.R. 8855, 80 Stat. 1610, and functions thereof transferred to Sec- retary of Health, Education, and Welfare by section 1 of Reorg. Plan No. 3 of 1966, set out as a note under sec- tion 202 of this title. Office of Surgeon General reestab- lished within the Office of the Assistant Secretary for Health, see Notice of Department of Health and Human Services, Office of the Assistant Secretary for Health, Mar. 30, 1987, 52 F.R. 11754. § 291j. Loans (a) Authorization; conditions In order further to assist the States in car- rying out the purposes of this subchapter, the Surgeon General is authorized to make a loan of funds to the applicant for any project for con- struction or modernization which meets all of the conditions specified for a grant under this part. (b) Approval; payments to applicants Except as provided in this section, an applica- tion for a loan with respect to any project under this part shall be submitted, and shall be ap- proved by the Surgeon General, in accordance with the same procedures and subject to the same limitations and conditions as would be ap- plicable to the making of a grant under this part for such project. Any such application may be approved in any fiscal year only if sufficient funds are available from the allotment for the type of project involved. All loans under this section shall be paid directly to the applicant. (c) Terms (1) The amount of a loan under this part shall not exceed an amount equal to the Federal share of the estimated cost of construction or mod- ernization under the project. Where a loan and a grant are made under this part with respect to the same project, the aggregate amount of such loan and such grant shall not exceed an amount equal to the Federal share of the estimated cost of construction or modernization under the project. Each loan shall bear interest at the rate arrived at by adding one-quarter of 1 per centum per annum to the rate which the Secretary of the Treasury determines to be equal to the cur- rent average yield on all outstanding market- able obligations of the United States as of the last day of the month preceding the date the ap- plication for the loan is approved and by adjust- ing the result so obtained to the nearest one- eighth of 1 per centum. Each loan made under this part shall mature not more than forty years after the date on which such loan is made, ex- cept that nothing in this part shall prohibit the payment of all or part of the loan at any time prior to the maturity date. In addition to the terms and conditions provided for, each loan under this part shall be made subject to such terms, conditions, and covenants relating to re-