received by the facility under an brity listed in §124.701 and any asce supplementary to that assistreceived for the construction or rization of the facility under the Works and Economic DevelopAct of 1965 (42 U.S.C. 3121, et seq.) Local Public Works Capital Dement Act of 1976 (Pub. L. 94–369). 06 Calculation of interest.

In addition to the amount of recalculated under §124.705, the States shall be entitled to reinterest on such amount in acace with this section at the rate ined by the Secretary based on average of the bond equivalent of weekly ninety-day U.S. Treasury anction rate for the quarter preto the quarter in which interest to accrue under this section. Change of status before July 18, For facilities that were sold or ferred or which ceased to be pubor other nonprofit facilities before 18, 1984, interest will be charged ning August 17, 1984, or 180 days the date of such sale, transfer or , whichever is later, and ending the date the amount the United tes is entitled to recover is col

Change of status after July 17, 1984. facilities that are sold or transd or which cease to be public or nonprofit facilities after July 17, interest will be charged beginning days after receipt by the Depart

of the notice required under 04; Provided, That if such notice is provided as prescribed, interest ll be charged beginning on the date the sale, transfer, or change of use, and ending on the date the amount hich the United States is entitled to ecover is collected.

(b) The Secretary may waive interest charges that result from delays caused solely by the Department.

124.707 Waiver of recovery where facility is sold or transferred to a proprietary entity.

(a) Conditions of the waiver. The Secretary may waive the recovery rights of the United States arising under $124.703(a) if the entity to which the facility was sold or transferred:

(1) Has filed a written request for the waiver within the time limits prescribed by this section;

(2) Has established an irrevocable trust in accordance with this section, in an amount equal to the greater of the amount that would otherwise have been recovered pursuant to § 124.705 (including accrued interest as calculated under § 124.706) or twice the cost of the remaining uncompensated services obligation of the facility as of the date of the change of status, that will be used by the entity only to provide services to those unable to pay in accordance with the requirements of subpart F of this part; and

(3) Has agreed to comply with the community service regulations set out in subpart G of this part.

(b) Procedures for obtaining waiver. (1) Within 30 days after the date of receipt of the information described in § 124.704(b), the Secretary will send a letter to the new owner of the facility advising of the United States' right of recovery and the opportunity to obtain a waiver. For the purpose of advising the new owner of the amount to be placed in the irrevocable trust should the owner wish to obtain a waiver, the letter will also state the dollar amount of the remaining uncompensated care obligation and the amount that would be due under § 124.705, computed as follows:

(1) Computation of uncompensated care obligation. (A) For a facility which changes status before the date that subpart F of this part is effective for the facility, the remaining uncompensated services obligation is zero.

(B) For a facility which changes status after the date that subpart F of this part is effective for the facility, the Secretary will multiply the annual compliance level, computed under the 10% method specified in 42 CFR 124.503(a)(1)(ii), for the fiscal year in which the change of status occurs times the number of years remaining in the facility's uncompensated services obligation. From this amount, the Secretary will subtract amounts of excess or add amounts of deficit for each fiscal year prior to the change of status for which the Secretary has previously conducted an audit of uncompensated services accounts. Excess and deficits

will be adjusted by the percent change in the National Consumer Price Index for Medical Care between the year in which the excess or deficit occurred and the year in which the status change occurred. For each fiscal year prior to the change of status which the Secretary has not audited, the Secretary will add to the remaining obligation an amount equal to the annual compliance level in each such year adjusted by the percent change in the National Consumer Price Index for Medical Care between that year and the year of the status change. The amount computed as the total remaining obligation will then be multiplied by two. If the transferee chooses to accept the Secretary's calculation, no further assessments will be made of uncompensated care provided prior to the change of status date. If the transferee does not accept the calculation, the transferor or transferee may hire, and may charge against the irrevocable trust established under this section, an independent auditor to certify the compli ance level and any excess or deficit for the period from May 18, 1979, up to and including the date of the change of status, using standard Departmental procedures supplemented with instructions provided by the Secretary, and submit the results in accordance with paragraph (b)(2)(1) of this section. The audit may be conducted for any years mot included in a previous site asSESSment conducted by the Department. If the Secretary agrees that a change is appropriate, the Secretary will use this information to adjust the calculation as set out in paragraph (213) of thes section. If the independent auditor certifies that qualified care was rendered either at the Bellity or at a replacemeat facility operated by the traISferee between the date of the change of status and the date of establishment of the trust, and the Secretary agrees, the post transfer level of care shall 106 32 fect the calculation of the total remaining uncompensated care obliga sion to be doubled, but instead shall be recognized as a credit to be irsan tom the trust as provided in paragraph (OCAL, of this section. In the case of a Scility with respect to which a grant was made under de XVI of the act, the remaining period of zoilganun will

be the remainder of the expecte life of the facility, as follows: for buildings, 30 years for addit years for building renovations, a for fixed equipment and 12 ya major movable equipment.

(ii) Computation of recovery s The Secretary will determine covery amount as provided in pid

(2) Within 60 days following tìm of the Secretary's letter provid suant to paragraph (b)(1) of th tion, the owner of the facility se tify the Secretary in writing th ther:

(i) Accepts the trust fund amc the waiver as offered by the Sec

(ii) Provides a detailed stater an alternative determination of covery amount or an independer of the remaining uncompensate ices obligation as described ir graph (b)(1)(i) of this section; or

(iii) Does not seek a waiver $124.707. Failure to provide a tim sponse to the Secretary under thTM ▼ paragraph will be considered a tion not to seek the waiver.

(3) Within 30 days following t ceipt of the owner's views conc the calculation, and after consi those views, the Secretary will final letter providing the Secre determination of twice the remi uncompensated care obligation ar recovery amount under $124.705 amount to be placed in the irrev trust will be the higher of thos Agures. (See paragraph (a)(2) of section.)

(4) Within 30 days of the date o Anal letter, the owner of the fai shall nouity the Secretary in WI whether or not it accepts the ter the waiver. Failure to provide ti notice to the Secretary under this paragraph will be considered an tion not to accept the waiver.

ve Establishment of the trust. (1) ▼ in lays of the fate of its accept th of a waiver under paragraph (b)2 ÞAÐ X us section, the owner begin delivering services to those: able to pay in accordance with subj F of this pars under an irrevocÈ il trust established in the amount culaced pursuant to paragraph (b); this section. Provided, Thas

The owner shall provide a copy of trust documents to the Secretary so trust shall be considered estabmntil the trust documents have approved by the Secretary; and The owner may credit against the tany uncompensated services pro

in accordance with subpart F of part between the date of the age of status of the facility and the Nishment of the trust. For an to receive the credit before the ishment of the trust and deposit inds therein, the auditor's report ing the post-transfer period shall shmitted with the notification of tance of the waiver, and in any not later than 30 days from the of the Secretary's final letter deed in paragraph (b)(3) of this secWithin 30 days following the reof the auditor's report, the Secy will notify the owner of the alle credit, if any. If the auditor's t is not timely submitted, the must be established and fully ed, in accordance with the time

imposed by paragraph (c)(1) of section, and the Secretary will nothe owner of the allowable credit, by, within 30 days of the date of the wishment of the trust or within 30 of the receipt of the report, ever is later.

The trust shall be administered by tee who is neither an employee te transferee nor an employee of a diary or of the parent institution fe transferee.

The trust shall provide that the he corpus and income may be ined only in U.S. Government or U.S. vemment insured securities.

Use of the trust. The corpus and inme of the irrevocable trust shall be to pay for the costs of uncompented services, which may include reable costs of establishing and adistering the trust and the cost of independent audit described in (Magraph (b)(1)(i) of this section, until e trust is exhausted.

pproved by the Office of Management and Budget under control number 0915-0099)

14.708 Waiver of recovery-good cause for other use of facility. The Secretary may for good cause ve the recovery rights of the United

States arising under §124.703(b). In determining whether there is good cause under this section for releasing the applicant or other owner of the facility from its obligation, the Secretary will take into consideration the extent to which:

(a) The facility will be devoted by the applicant or other owner to use for another public or nonprofit purpose whch will promote the purpose of the Act;

(b) There are reasonable assurances that for the remainder of the 20-year period other public or nonprofit facilities not previously utilized for the purpose for which the facility was constructed will be so utilized and are substantially equivalent in nature and purpose.

(c) The facility has been acquired from an agency of the United States (e.g., the Federal Housing Administration under its mortgage insurance commitment program) which has made a reasonable effort to dispose of it for operation as a public or nonprofit health care facility.

[51 FR 7939, Mar. 7, 1986, as amended at 57 FR 8272, Mar. 9, 1992]

§ 124.709 Withdrawal of waiver.

(a) Any waiver granted under this subpart is conditioned upon the recipient of the waiver carrying out the obligations imposed by §124.707 or § 124.708 as applicable.

(b) The Secretary will monitor compliance with the community service and uncompensated care obligations of any entity that receives a waiver.

(c) Should a recipient of a waiver fail to comply with the applicable conditions, the Secretary will withdraw the waiver and seek recovery based on the value of the facility on the date the right of recovery first arose under § 124.703.

(d) No waiver will be withdrawn until the recipient has been notified in writing by the Secretary of the noncompliance and has failed to take corrective action within 90 days after the date of such notice.

(e) Should the waiver be withdrawn, the amount of the Government's recovery will be the amount set out in the Secretary's determination letter as described in § 124.707 (b)(1) or (b)(3) as applicable plus interest from the date of