
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC300e-4]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                    CHAPTER 6A--PUBLIC HEALTH SERVICE
 
             SUBCHAPTER XI--HEALTH MAINTENANCE ORGANIZATIONS
 
Sec. 300e-4. Loans and loan guarantees for initial operation 
        costs
        

(a) Authority

    The Secretary may--
        (1) make loans to public or private health maintenance 
    organizations to assist them in meeting the amount by which their 
    costs of operation during a period not to exceed the first sixty 
    months of their operation exceed their revenues in that period;
        (2) make loans to public or private health maintenance 
    organizations to assist them in meeting the amount by which their 
    costs of operation, which the Secretary determines are attributable 
    to significant expansion in their membership or area served and 
    which are incurred during a period not to exceed the first sixty 
    months of their operation after such expansion, exceed their 
    revenues in that period which the Secretary determines are 
    attributable to such expansion; and
        (3) guarantee to non-Federal lenders payment of the principal of 
    and the interest on loans made to private health maintenance 
    organizations for the amounts referred to in paragraphs (1) and (2).

No loan or loan guarantee may be made under this subsection for the 
costs of operation of a health maintenance organization unless the 
Secretary determines that the organization has made all reasonable 
attempts to meet such costs, and unless the Secretary has made a grant 
or loan to, entered into a contract with, or guaranteed a loan for, the 
organization in fiscal year 1981, 1982, 1983, 1984, or 1985 under this 
section or section 300e-3(b) \1\ of this title (as in effect before 
October 1, 1985).
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    \1\ See References in Text note below.
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(b) Limitations

    (1) Except as provided in paragraph (2), the aggregate amount of 
principal of loans made or guaranteed, or both, under subsection (a) of 
this section for a health maintenance organization may not exceed 
$7,000,000. In any twelve-month period the amount disbursed to a health 
maintenance organization under this section (either directly by the 
Secretary, by an escrow agent under the terms of an escrow agreement, or 
by a lender under a guaranteed loan) may not exceed $3,000,000.
    (2) The cumulative total of the principal of the loans outstanding 
at any time which have been directly made, or with respect to which 
guarantees have been issued, under subsection (a) of this section may 
not exceed such limitations as may be specified in appropriation Acts.

(c) Source of loan funds

    Loans under this section shall be made from the fund established 
under section 300e-7(e) of this title.

(d) Time limit on loans and loan guarantees

    No loan may be made or guaranteed under this section after September 
30, 1986.

(e) Repealed. Pub. L. 97-35, title IX, Sec. 947(c), Aug. 13, 1981, 95 
        Stat. 577

(f) Medically underserved populations

    In considering applications for loan guarantees under this section, 
the Secretary shall give special consideration to applications for 
health maintenance organizations which will serve medically underserved 
populations.

(July 1, 1944, ch. 373, title XIII, Sec. 1305, as added Pub. L. 93-222, 
Sec. 2, Dec. 29, 1973, 87 Stat. 924; amended Pub. L. 93-641, Sec. 8, 
Jan. 4, 1975, 88 Stat. 2276; Pub. L. 94-273, Sec. 2(21), Apr. 21, 1976, 
90 Stat. 376; Pub. L. 94-460, title I, Secs. 107(c), 108(c), (d)(2), 
109(a)(1), (2), 113(b), Oct. 8, 1976, 90 Stat. 1949, 1953; Pub. L. 95-
559, Secs. 2(b), 4(a), (b), Nov. 1, 1978, 92 Stat. 2131, 2132; Pub. L. 
96-32, Sec. 2(d), July 10, 1979, 93 Stat. 82; Pub. L. 97-35, title IX, 
Secs. 943(a)-(c), 947(c), Aug. 13, 1981, 95 Stat. 576, 577; Pub. L. 99-
660, title VIII, Sec. 804(a), Nov. 14, 1986, 100 Stat. 3800.)

                       References in Text

    Section 300e-3(b) of this title, referred to in subsec. (a), was 
repealed by Pub. L. 99-660, title VIII, Sec. 803(a), Nov. 14, 1986, 100 
Stat. 3799.


                               Amendments

    1986--Subsec. (a). Pub. L. 99-660 inserted ``, and unless the 
Secretary has made a grant or loan to, entered into a contract with, or 
guaranteed a loan for, the organization in fiscal year 1981, 1982, 1983, 
1984, or 1985 under this section or section 300e-3(b) of this title (as 
in effect before October 1, 1985)'' at end of last sentence.
    1981--Subsec. (a). Pub. L. 97-35, Sec. 943(a), in pars. (1) and (2) 
struck out ``nonprofit'' before ``private'', and in par. (3) substituted 
provisions respecting guarantees for private health maintenance 
organizations, for guarantees for nonprofit private health maintenance 
organizations.
    Subsec. (b)(1). Pub. L. 97-35, Sec. 943(b), generally revised 
limitations and, among many changes, increased amounts subject to 
coverage, and struck out requirements respecting Congressional oversight 
for increases in amounts.
    Subsec. (d). Pub. L. 97-35, Sec. 943(c), substituted ``1986'' for 
``1981''.
    Subsec. (e). Pub. L. 97-35, Sec. 947(c), struck out subsec. (e) 
which related to projects in nonmetropolitan areas.
    1979--Subsec. (b)(1). Pub. L. 96-32 substituted ``$4,500,000'' for 
``$4,000,000'' in two places.
    1978--Subsec. (a). Pub. L. 95-559, Sec. 4(b)(1), substituted ``costs 
of operation'' for ``operating costs'' wherever appearing.
    Subsec. (b)(1). Pub. L. 95-559, Sec. 4(a), (b)(2), inserted ``(or 
$4,000,000 if the Secretary makes a written determination that such 
loans or loan guarantees are necessary to preserve the fiscally sound 
operation of the health maintenance organization and to protect against 
the risk of insolvency of the health maintenance organization and, 
within 30 days of the making of such loans or loan guarantees, furnishes 
the Committee on Human Resources of the Senate and the Committee on 
Interstate and Foreign Commerce of the House of Representatives with 
written notification of the making of the loans or loan guarantees and a 
copy of the written determination made with respect to the loans or loan 
guarantees and the reasons for the determination) through September 30, 
1979, and $4,000,000 thereafter'' after ``$2,500,000'' and ``(or 
$2,000,000 if the Secretary makes a written determination that such 
disbursements are necessary to preserve the fiscally sound operation of 
the health maintenance organization and protect against the risk of 
insolvency of the health maintenance organization and, within 30 days of 
such disbursement, furnishes the Committee on Human Resources of the 
Senate and the Committee on Interstate and Foreign Commerce of the House 
of Representatives with written notification of the making of the 
disbursement and a copy of the written determination made with respect 
to it and the reasons for the determination) through September 30, 1979, 
and $2,000,000 thereafter'' after ``$1,000,000'' and substituted ``any 
twelve-month period'' for ``any fiscal year''.
    Subsec. (d). Pub. L. 95-559, Sec. 2(b), substituted ``September 30, 
1981'' for ``September 30, 1980''.
    1976--Subsec. (a)(1), (2). Pub. L. 94-460, Secs. 107(c), 109(a)(1), 
substituted ``during a period not to exceed the first sixty months'' for 
``in the period of the first thirty-six months''.
    Subsec. (a)(3). Pub. L. 94-460, Sec. 108(c), substituted reference 
to loans made to nonprofit private health maintenance organizations for 
the amounts referred to in paragraph (1) or (2), or to other private 
health maintenance organizations for such amounts but only if the health 
maintenance organization will serve a medically underserved population 
for reference to loans made to any private health maintenance 
organization (other than a private nonprofit health maintenance 
organization) for the amounts referred to in paragraph (1) or (2), but 
only if such health maintenance organization will serve a medically 
underserved population.
    Subsec. (b)(1). Pub. L. 94-460, Sec. 109(a)(2), substituted ``In any 
fiscal year the amount disbursed to a health maintenance organization 
under this section (either directly by the Secretary or by an escrow 
agent under the terms of an escrow agreement or by a lender under a loan 
guaranteed under this section) may not exceed $1,000,000'' for ``In any 
fiscal year, the amount disbursed under a loan or loans made or 
guaranteed under this section for a health maintenance organization may 
not exceed $1,000,000,000''.
    Subsec. (d). Pub. L. 94-460, Sec. 113(b), substituted ``No loan may 
be made or guaranteed under this section after September 30, 1980'' for 
``A loan or loan guarantee may be made under this section through the 
fiscal year ending June 30, 1978''.
    Pub. L. 94-273 substituted ``September'' for ``June''.
    Subsec. (f). Pub. L. 94-460, Sec. 108(d)(2), added subsec. (f).
    1975--Subsec. (b)(1). Pub. L. 93-641 substituted provisions that 
amount disbursed under a loan or loans made or guaranteed under this 
section for a health maintenance organization may not exceed 
$1,000,000,000 for provisions that principal amount of any loan made or 
guaranteed under subsec. (a) of this section for a health maintenance 
organization may not exceed $1,000,000.


                    Effective Date of 1986 Amendment

    Section 804(b) of Pub. L. 99-660 provided that: ``The amendment made 
by subsection (a) [amending this section] does not apply to any loan or 
loan guarantee for the initial costs of operation of a health 
maintenance organization made under title XIII of the Public Health 
Service Act [this subchapter] before October 1, 1985.''
    Amendment by Pub. L. 99-660 effective Oct. 1, 1985, see section 
815(a) of Pub. L. 99-660, set out as an Effective and Termination Dates 
of 1986 Amendment note under section 300e-1 of this title.


                    Effective Date of 1978 Amendment

    Section 4(d) of Pub. L. 95-559 provided that: ``The amendments made 
by this section [amending this section and section 300e-7 of this title] 
shall only be effective for fiscal years beginning on or after October 
1, 1978.''


                    Effective Date of 1976 Amendment

    Amendment by Pub. L. 94-460 effective Oct. 8, 1976, except that the 
amendment of subsec. (a)(1), (2) of this section by section 107(c) of 
Pub. L. 94-460 applicable with respect to grants, contracts, loans, and 
loan guarantees made under this section and sections 300e-2 and 300e-3 
of this title for fiscal years beginning after Sept. 30, 1976, and 
except that the amendment of subsec. (a)(1), (2) of this section by 
section 109(a)(1) of Pub. L. 94-460 applicable with respect to loan 
guarantees made under this section after Sept. 30, 1976, see section 118 
of Pub. L. 94-460, set out as a note under section 300e of this title.

                  Section Referred to in Other Sections

    This section is referred to in section 300e-5 of this title.
