1997 Minnesota Statutes

     144.148 Rural hospital capital improvement grant and 
  loan program. 

    Subdivision 1.    Definition.  (a) For purposes of this 
 section, the following definitions apply. 

    (b) "Eligible rural hospital" means a hospital that: 

    (1) is located outside the seven-county metropolitan area; 

    (2) has 50 or fewer licensed hospital beds with a net 
 hospital operating margin not greater than two percent in the 
 two fiscal years prior to application; and 

    (3) is 25 miles or more from another hospital. 

    (c) "Eligible project" means a modernization project to 
 update, remodel, or replace aging hospital facilities and 
 equipment necessary to maintain the operations of a hospital. 

    Subd. 2.    Program.  The commissioner of health shall 
 award rural hospital capital improvement grants or loans to 
 eligible rural hospitals.  A grant or loan shall not exceed 
 $1,500,000 per hospital.  Grants or loans shall be interest 
 free.  An eligible rural hospital may apply the funds 
 retroactively to capital improvements made during the two fiscal 
 years preceding the fiscal year in which the grant or loan was 
 received, provided the hospital met the eligibility criteria 
 during that time period.  

    Subd. 3.    Applications.  Eligible hospitals seeking a 
 grant or loan shall apply to the commissioner.  Applications 
 must include a description of the problem that the proposed 
 project will address, a description of the project including 
 construction and remodeling drawings or specifications, sources 
 of funds for the project, uses of funds for the project, the 
 results expected, and a plan to maintain or operate any facility 
 or equipment included in the project.  The applicant must 
 describe achievable objectives, a timetable, and roles and 
 capabilities of responsible individuals and organization.  
 Applicants must submit to the commissioner evidence that 
 competitive bidding was used to select contractors for the 
 project.  

    Subd. 4.    Consideration of applications.  The 
 commissioner shall review each application to determine whether 
 or not the hospital's application is complete and whether the 
 hospital and the project are eligible for a grant or loan.  In 
 evaluating applications, the commissioner shall score each 
 application on a 100 point scale, assigning:  a maximum of 40 
 points for an applicant's clarity and thoroughness in describing 
 the problem and the project; a maximum of 40 points for the 
 extent to which the applicant has demonstrated that it has made 
 adequate provisions to assure proper and efficient operation of 
 the facility once the project is completed; and a maximum of 20 
 points for the extent to which the proposed project is 
 consistent with the hospital's capital improvement plan or 
 strategic plan.  The commissioner may also take into account 
 other relevant factors.  During application review, the 
 commissioner may request additional information about a proposed 
 project, including information on project cost.  Failure to 
 provide the information requested disqualifies a loan applicant. 

    Subd. 5.    Program oversight.  The commissioner of 
 health shall review audited financial information of the 
 hospital to assess eligibility.  The commissioner shall 
 determine the amount of a grant or loan to be given to an 
 eligible rural hospital based on the relative score of each 
 eligible hospital's application and the funds available to the 
 commissioner.  The grant or loan shall be used to update, 
 remodel, or replace aging facilities and equipment necessary to 
 maintain the operations of the hospital.  

    Subd. 6.    Loan payment.  Loans shall be repaid as 
 provided in this subdivision over a period of 15 years.  In 
 those years when an eligible rural hospital experiences a 
 positive net operating margin in excess of two percent, the 
 eligible rural hospital shall pay to the state one-half of the 
 excess above two percent, up to the yearly payment amount based 
 upon a loan period of 15 years.  If the amount paid back in any 
 year is less than the yearly payment amount, or if no payment is 
 required because the eligible rural hospital does not experience 
 a positive net operating margin in excess of two percent, the 
 amount unpaid for that year shall be forgiven by the state 
 without any financial penalty.  As a condition of receiving an 
 award through this program, eligible hospitals must agree to any 
 and all collection activities the commissioner finds necessary 
 to collect loan payments in those years a payment is due. 

    Subd. 7.    Accounting treatment.  The commissioner of 
 finance shall record as grants in the state accounting system 
 funds obligated by this section.  Loan payments received under 
 this section shall be deposited in the health care access fund. 

    Subd. 8.    Expiration.  This section expires June 30, 
 1999. 

    HIST: 1997 c 225 art 2 s 53