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located the health service area respecting the proposed

termination,

"(ii) give the entity notice of the intention to terminate the agreement and in the notice specify with particularity (I) the basis for the determination of the

6 Secretary that the entity is not in compliance with the agreement, and (II) the actions that the entity should take to come into compliance with the agreement, and “(iii) provide the entity with a reasonable opportunity for a hearing, before an officer or employee of the Department of Health, Education, and Welfare designated for such purpose, on the matter specified in the notice.".

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(3) The amendments made by paragraphs (1) and (2) 15 shall take effect with respect to designation agreements en16 tered into under section 1515(c) of the Public Health Service 17 Act after the date of the enactment of this Act.

18 (e) Section 1515(c) (as amended by subsection (d)) is 19 amended by adding after clause (ii) of paragraph (1)(A) the 20 following: "A designation agreement under this subsection 21 may be terminated by the Secretary before the expiration of 22 its term if the health service area with respect to which the 23 agreement was entered into is revised under section 24 1511(b)(4) and the Secretary determines, after consultation 25 with the Governor of each State in which the health service

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1 area (as revised) is located, that the health systems agency 2 designated under such agreement cannot effectively carry out 3 the agreement for the area (as revised). In terminating an 4 agreement under the preceding sentence, the Secretary shall 5 provide that the termination shall not take effect before an 6 agreement for the designation of a new agency takes effect 7 and shall provide the agency designated under the agreement 8 to be terminated an opportunity to terminate its affairs in a 9 satisfactory manner.".

10 (f) Section 1514 is amended by striking out "(including 11 entities" through "section 304)".

12 (g) Section 1515(d) is amended (1) by inserting "agree13 ment" after "If a designation", and (2) by inserting "or is not 14 renewed" after "prescribed for its expiration".

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LIMITS ON DESIGNATED AGENCIES

SEC. 105. Section 1515(c)(3) is amended by adding at 17 the end thereof the following: "If the Secretary determines 18 that a health systems agency has not so fulfilled such func19 tions or does not continue to meet such requirements, the 20 Secretary may renew a designation agreement for such 21 agency under such conditions as the Secretary determines 22 appropriate, including conditions which limit the functions 23 which the agency would be authorized to perform or the 24 amount the agency may receive under a grant under section 25 1516.".

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PLANNING GRANTS

SEC. 106. (a) Section 1516 is amended by redesignating 3 subsection (c) as subsection (d) and by striking out subsection

4 (b) and inserting in lieu thereof the following:

5 "(b) The amount of any grant under subsection (a) to a 6 health systems agency designated under section 1515(b) shall 7 be determined by the Secretary.

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"(c)(1) Except as provided in paragraphs (2) and (3), the

9 amount of a grant under subsection (a) to a health systems 10 agency designated under section 1515(c) shall be the greater 11 of the amount determined under subparagraph (A), (B), or (C) 12 as follows:

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"(A) The amount of a grant to a health systems agency shall be the lesser of

"(i) if the population of the health service area for which the agency is designated

"(I) is not over one million, the product of $0.70 and the population of such area,

"(II) is over one million but not over two million, the sum of $700,000 and the product of $0.50 and the population of such

area which is over one million, or

"(III) is over two million, the sum of $1,200,000 and the product of $0.30 and the

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population of such area which is over two

million, or

"(ii) $3,750,000.

"(B)(i) If the application of the health systems agency for such grant contains assurances satisfactory to the Secretary that the agency will expend or obligate in the period in which such grant will be available for obligation non-Federal funds meeting the requirements of clause (ii) for the purposes for which such grant may be made, the amount of such grant shall be the sum of—

"(I) the amount determined under subparagraph (A) or (C), whichever is applicable, and

"(II) the lesser of the amount of such nonFederal funds with respect to which the assur

ances were made, or the product of $0.25 and the

population of the health service area for which the agency is designated.

"(ii) The non-Federal funds which an agency may use for the purpose of obtaining a grant under subsec

tion (a) which is computed on the basis of the formula prescribed by clause (i) shall be funds which are not paid to the agency for the performance of particular services by it and which are otherwise contributed to

the agency without conditions as to their use other

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than the condition that the funds shall be used for the

purposes for which a grant made under this section may be used.

"(C) The amount of a grant to a health systems

agency may not be less than—

"(i) $200,000 in the case of a grant made in the fiscal year ending September 30, 1980,

“(ii) $215,000 in the case of a grant made in the fiscal year ending September 30, 1981, and “(iii) $230,000 in the case of a grant made

in any succeeding fiscal year.

"(2) The amount of a grant to a health systems agency

13 which is subject to a condition imposed by the Secretary 14 under section 1515(c)(3) shall be determined in accordance

15 with such condition.

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"(3) If the Secretary determines, after review of the 17 budget of a health systems agency, that the amount of a 18 grant which is to be made to the agency in accordance with 19 paragraph (1) is in excess of the amount needed by the 20 agency to adequately perform its functions under its designa21 tion agreement, the amount of the grant to the agency shall 22 be such amount as the Secretary determines the agency 23 needs for the performance of such functions.".

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