§291j — Title 42 The Public Health and Welfare | U.S. Code

§291j Loans

Title 42 › Chapter 6A— PUBLIC HEALTH SERVICE › Subchapter IV— CONSTRUCTION AND MODERNIZATION OF HOSPITALS AND OTHER MEDICAL FACILITIES › Part A— Grants and Loans for Construction and Modernization of Hospitals and Other Medical Facilities › § 291j

Last updated Apr 5, 2026|Official source

Summary

The Surgeon General can lend money to an applicant for a construction or modernization project if the project would qualify for a grant under this part. Loan applications follow the same rules as grant applications, must be approved by the Surgeon General, and can only be approved in a year if enough money is available from the allotment for that project type. Loans are paid directly to the applicant and come from the same allotment that a grant would use. A loan cannot be larger than the federal share of the project’s estimated cost, and if a grant is also given the total of both cannot exceed that federal share. Each loan charges interest equal to the Treasury’s computed average yield on all marketable U.S. obligations as of the last day of the month before approval, plus 0.25 percentage points, rounded to the nearest 0.125 percentage point. Loans must be repaid within 40 years but can be paid off earlier. The Surgeon General and the borrower can set extra repayment terms, and the Surgeon General may change terms to protect the United States’ financial interest. If events in section 291i occur before the loan is fully repaid, the unpaid balance becomes due immediately and any new owner must repay it. Interest payments and loan repayments are deposited in the U.S. Treasury as miscellaneous receipts.

Title 42, §291j

The Public Health and Welfare — Source: USLM XML via OLRC

(a)In order further to assist the States in carrying out the purposes of this subchapter, the Surgeon General is authorized to make a loan of funds to the applicant for any project for construction or modernization which meets all of the conditions specified for a grant under this part.

(b)Except as provided in this section, an application for a loan with respect to any project under this part shall be submitted, and shall be approved by the Surgeon General, in accordance with the same procedures and subject to the same limitations and conditions as would be applicable 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)(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 modernization 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 current average yield on all outstanding marketable obligations of the United States as of the last day of the month preceding the date the application for the loan is approved and by adjusting 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, except 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 repayment of principal, payment of interest, and other matters as may be agreed upon by the applicant and the Surgeon General.

(2)The Surgeon General may enter into agreements modifying any of the terms and conditions of a loan made under this part whenever he determines such action is necessary to protect the financial interest of the United States.

(3)If, at any time before a loan for a project has been repaid in full, any of the events specified in clause (a) or clause (b) of section 291i 11 See References in Text note below. of this title occurs with respect to such project, the unpaid balance of the loan shall become immediately due and payable by the applicant, and any transferee of the facility shall be liable to the United States for such repayment.

(d)Any loan under this part shall be made out of the allotment from which a grant for the project concerned would be made. Payments of interest and repayments of principal on loans under this part shall be deposited in the Treasury as miscellaneous receipts.

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 291i of this title, referred to in subsec. (c)(3), was amended generally by Pub. L. 98–369, div. B, title III, § 2381(a), July 18, 1984, 98 Stat. 1112, and, as so amended, the provisions contained in former cls. (a) and (b) of section 291i are covered by section 291i(a)(1) and (2).

Prior Provisions

A prior section 291j, act

July 1, 1944, ch. 373, title VI, § 632, as added Aug. 13, 1946, ch. 958, § 2, 60 Stat. 1041; amended

June 25, 1948, ch. 646, § 32(a), 62 Stat. 991;

May 24, 1949, ch. 139, § 127, 63 Stat. 107; Oct. 25, 1949, ch. 722, § 4, 63 Stat. 900;

July 12, 1954, ch. 471, § 4(g), 68 Stat. 466; Aug. 28, 1958, Pub. L. 85–791, § 27, 72 Stat. 950, related to withholding of certification for noncompliance with requirements, appeal, conclusiveness of findings, the jurisdiction of the courts of appeals and to review by the Supreme Court, prior to the general amendment of this subchapter by Pub. L. 88–443. See section 291g and 291h of this title. Provisions similar to those comprising this section were contained in sections 291w to 291z of this title, prior to the general amendment of this subchapter by Pub. L. 88–443.

Statutory Notes and Related Subsidiaries

Change of Name

“Secretary of Health and Human Services” substituted for “Secretary of Health, Education, and Welfare” 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 Secretary of Health, Education, and Welfare by section 1 of Reorg. Plan No. 3 of 1966, set out as a note under section 202 of this title. Office of Surgeon General reestablished 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.