Federal Update
Below is a selection of recent health policy and regulatory news and information relevant to health centers and PCAs. For regular updates, subscribe to Capital Link’s blog, or access NACHC’s blogs and the HRSA’s health center webpage.
FY2020 Spending Bill Update
On April 30th, the House Appropriations committee voted to approve the Fiscal Year 2020 Labor-HHS-Education Funding bill. The bill includes increases over the current funding levels for workforce, health care, and education programs in FY20, providing $1.68 billion for health centers, an almost $50 million increase over approved funding for FY19. The entire House will vote on this bill, among others, beginning on June 12th. A summary of the House spending bill is available here.
New Markets Tax Credits
May 23, 2019 – The U.S. Department of the Treasury’s Community Development Financial Institutions Fund announced the awardees for the 2018 round of New Markets Tax Credit (NMTC) allocations. The $3.5 billion in awards are aimed at revitalizing low-income communities and increasing economic opportunity nationwide.
To date, health centers have raised more than $3.6 billion for their capital projects through NMTC and these projects are highly desirable investments for NMTC allocatees and investors. While NMTC financing is a critical source of low-cost capital and equity for health center facility projects—often securing approximately 20-25% of total project costs—obtaining tax credits from community development entities (CDEs) is a competitive and complex process. Interested health centers must demonstrate a high level of project readiness and be able to communicate the merits of their projects to Community Development Entities (CDEs) with allocation. Furthermore, the process of structuring and closing an NMTC transaction is complicated and the terms, benefits, and fees offered to borrowers vary widely.
Health centers wanting to explore this option should act now. While the program is authorized through the end of 2019, it is unclear whether tax reform efforts could change or eliminate access to this important resource in the future.
Health centers interested in considering this financing option should access our series of three Spotlight on Capital Resources issues describing the NMTC program here or a recording of our recent webinar, Funding Sources for FQHC Capital Projects: Updates on New Markets Tax Credits and HRSA's Loan Guarantee Program here.
HRSA Awards $24 million to Fight Substance Use Disorders in Rural Communities
The Health Resources and Services Administration’s Federal Office of Rural Health Policy has awarded $24 million for the second round of Rural Communities Opioid Response Program (RCORP) planning grants [see press release] to organizations, including health centers (see the list of awardees here).
The awards are part of a broad multi-year strategy to address the nationwide epidemic of opioid use disorder (OUD). Recipients receive $200,000 for one year to formalize partnerships with local stakeholders, conduct needs assessments, and develop plans to implement and sustain prevention, treatment, and recovery interventions for substance use disorders (SUD), including OUD.