tilingual community), in substantially the following form, in appropriate areas within the facility (admissions, office, emergency department and business office) for the purpose of informing patients or potential patients that criteria for eligibility and applications are available upon request:

"NOTICE OF HILL-BURTON OBLIGATION "This hospital (or other facility) is required by law to give a a reasonable amount of service at no cost or less than full cost to people who cannot pay. If you think that you are eligible for these services, please contact our business office (give office location) and ask for assistance. If you are not satisfied with the results, you may contact (the State Hill-Burton agency with address)."

Provided, That an applicant which has selected a presumptive compliance guideline under paragraph (d)(1) of this section may, at its option, either (1) add to such notice language stating that the facility's obligation is limited to a specified dollar volume of uncompensated services and that if the facility has, during a specified period (e.g., year, quarter, month), already provided a volume of uncompensated services sufficient to satisfy such obligation, any person inquiring about such services will be given a written statement to that effect which shall also state when additional uncompensated services will be available; or (2) post an additional notice stating that the facility's obligation has been satisfied for the current period and stating when additional uncompensated services will be available.

(j) Evaluation and enforcement. The State plan shall provide for evaluation and enforcement of the assurance in accordance with the following requirements:

(1) The State agency shall,

(i) At least annually, perform evaluations of the amount of the various services provided in each facility with respect to which Federal assistance has been provided under the Act, to determine whether such assurance is being complied with; and

(ii) Establish procedures for the investigation of complaints that such assurance is not being complied with.

(2) Evaluation pursuant to paragraph (j)(1) of this section shall be based on the annual budget of each facility for uncompensated services and on financial statements of such facilities filed pursuant to section 646 of the Act and § 53.128(q), and on such

other information, including reports of investigations and hearing decisions, as the State agency deems relevant and material.

(3) The State plan shall provide for adequate methods of enforcement of the assurance, including effective sanctions to be applied against any facility which fails to comply with such assurance. Such sanctions may include, but need not be limited to, license revocation, termination of State assistance, and court action.

(k) Reports. (1) The State agency shall, not less often than annually, report in writing to the Secretary its evaluation of each facility's compliance with the assurance, the disposition of each complaint received by the State agency, remedial proposed action with respect to each facility found by the State agency to be not in compliance with the assurance, and the status of such remedial action.

(2) In addition, the State agency shall promptly report to the Regional Attorney and Regional Health Director of the Department of Health and Human Services the institution of any legal action against a facility or the State agency involving compliance with the assurance.

[37 FR 14721, July 22, 1972, as amended at 38 FR 16354, June 22, 1973; 40 FR 46203, Oct. 6, 1975]

(a) Before an application is recommended by a State agency to the Secretary for approval, the State agency shall obtain an assurance from the applicant that all portions and services of the entire facility for the construction or modernization of which, or in connection with which, aid under the Act is sought will be made available without discrimination on account of creed and no professionally qualified person will be discriminated against on account of creed with respect to the privilege of professional practice in the facility.

(b) Each construction contract is subject to the condition that the applicant shall comply with the requirements of Executive Order 11246, September 24, 1965 (30 FR 12319), relating to nondiscrimination in construc

tion contract employment, and the applicable rules, regulations, and procedures prescribed pursuant thereto.

(c) Attention is called to the requirement of title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d; 78 Stat. 252) which provides that no person in the United States shall, on the ground of race, color, or national origin be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. A regulation implementing such title VI, applicable to assistance under this part for construction and modernization of hospitals and medical facilities, has been issued by the Secretary of Health and Human Services with the approval of the President (45 CFR Part 80).

[37 FR 182, Jan. 6, 1972, as amended at 39 FR 31767, Aug. 30, 1974]

§ 53.113 Community service.

(a) Applicability. The provisions of this section apply to every applicant which heretofore has given or hereafter will give a community service as

surance.

(b) Definitions. As used in this section:

(1) The term "community service assurance" means an assurance required by regulations promulgated pursuant to section 603(e)(1) of the Act or the predecessor of that section (section 622(f), Public Health Service Act, enacted by Pub. L. 79-725, 60 Stat. 1041).

(2) The term "facility" has the same meaning as is given it in § 53.111(b)(1). (3) The term "applicant" has the same meaning as is given it in § 53.111(b)(2).

(4) The term "fiscal year" has the meaning is given it in

same

§ 53.111(b)(3).

as

(c) Assurance. Before an application under this part is recommended by a State agency to the Secretary for approval, the State agency shall obtain an assurance from the applicant that the facility will furnish a community service.

(d) Compliance. In order to comply with its community service assurance an applicant must:

(1)(i) Make the services it furnishes available to the general public, or

(ii) Limit the availability of such services only on the basis of age, medical indigency, or type or kind of medical or mental disability, or

(iii) If the facility constitutes a medical or nursing care unit of a home or other institution, make such home or other institution available in accordance with paragraph (d)(1) (i) or (ii) of this section; and

(2)(i) Make arrangements, if eligible to do so, for reimbursement for services with:

(A) Those principal State and local governmental third-party payors which provide reimbursement for services that is not less than the actual cost of such services as determined in acaccordance with accepted cost counting principles; and

(B) Those Federal governmental third-party programs, such as Medicare and Medicaid, to the extent that the applicant is entitled to reimbursement at reasonable cost under a formula established in accordance with applicable Federal law.

(ii) Take such additional steps as may be necessary to ensure that admission to and services of the facility will be available to beneficiaries of the governmental programs specified in paragraph (d)(2)(i) of this section without discrimination (or preference) on account of their being such beneficiaries.

(e) Reports. The annual statement required by section 646 of the Act and § 53.128(q), a copy of which must be submitted to the State agency in accordance with the requirements of § 53.111(e)(1), shall set forth the amount of the reimbursement received pursuant to each arrangement with a principal governmental third-party

payor.

(f) Evaluation and Enforcement. The State plan shall provide for evaluation and enforcement of the community service assurance in accordance with the following requirements:

(1) The State agency shall,

(i) At least annually, evaluate the compliance of facilities with such assurance; and

(ii) Establish procedures for the investigation of complaints that such assurance is not being complied with.

(2) The State plan shall provide for adequate methods of enforcement of the assurance, including effective sanctions to be applied against any facility which fails to comply with such assurance. Such sanctions may include, but need not be limited to, license revocation, termination of State assistance and court action.

(g) Reports. (1) The State agency shall, not less often than annually, report in writing to the Secretary its general evaluation of facilities' compliance with the assurance, the disposition of each complaint received by the State agency, proposed remedial action with respect to each facility found by the State agency to be not in compliance with the assurance, and the status of such remedial action.

(2) In addition, the State agency shall promptly report to the Regional Attorney and Regional Health Director of the Department of Health and Human Services the institution of any legal action against a facility or the State agency involving compliance with the assurance.

[39 FR 31767, Aug. 30, 1974, as amended at 42 FR 16780, Mar. 30, 1977]

Subpart M-Methods of Administration of the State Plan

§ 53.135 Good cause for other use of facility.

If within 20 years after completion of any construction for which a construction grant has been made the facility shall cease to be a public health center or a public or other nonprofit hospital, outpatient facility, facility for long-term care, or rehabilitation facility the Secretary, in determining whether there is good cause for releasing the applicant or other owner of the facility from its obligation shall 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 which 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 extent for such purposes; or

(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 facility.

Subpart N-Loan Guarantees and Direct Loans

§ 53.154 Waiver of right of recovery.

In determining whether there is good cause for waiver of any right of recovery which he may have against a nonprofit private agency by reason of any payments made pursuant to a loan guarantee, or against a public agency by reason of the failure of such agency to make payments of principal and interest on a direct loan to such agency, the Secretary shall take into consideration the extent to which:

(a) The facility with respect to which the loan guarantee or direct loan was made will continue to be devoted by the applicant or other owner to use for the purpose for which it was constructed or another public or nonprofit purpose which will promote the purposes of the Act;

(b) There are reasonable assurances that for the remainder of the repayment period of the loan other public or non-profit facilities not previously utilized for the purpose for which the facility was constructed will be so utilized and are substantially equivalent in nature and extent for such purposes; and

(c) Such recovery would seriously curtail the provision of medical services to persons in need of such services in the area.

For purposes of this part, unless the context otherwise requires:

“Act” means the Community Mental Health Centers Act (42 U.S.C. 2689 et seq.) other than Part D thereof as in effect before the date of enactment of the Omnibus Budget Reconciliation Act of 1981, Pub. L. 97-35.

"Approved program” means all the services, activities, or facilities (or combinations thereof), whether provided by the applicant or by others through contractual agreements with the applicant (or any combination thereof), which

(a) Meet the requirements of the Act and provisions of this part;

(b) Are described by the applicant, in accordance with the provisions of this part, in applying for a grant under the Act; and

(c) Are approved by the Secretary through the award of a grant under the Act.

"Catchment area" means a defined geographic area established or designated under the State plan of the State of which it is a part (or in the case of an interstate area, the State

plans of the States of which it is a part) for purposes of determining the area, and the population thereof, to be served by a community mental health center.

"Community mental health center" has, except for purposes of grants and applications for grants under part B of the Act, the meaning ascribed to it by section 201 of the Act. "Other entity", when used in the expression "community mental health center (or other entity)", refers to a legal entity that would be a community mental health center except that it does not meet all of the requirements of section 201 of the Act.

"Costs of operations", as applied to any grant under section 203, 205, or 211 of the Act, and "costs", as applied to any grant under section 202 or 204 of the Act, mean the total of the expenses or charges (irrespective of the source of revenue for the payment of these expenses or charges) incurred either directly by the entity to which a grant is made (under any of these sections) or by other providers through contractual arrangements with the entity, but only if the expense or charge is allocable to the approved program, is allowable, and is otherwise in accord with

(a) The provisions of § 54.109 of this part and the provisions of 45 CFR Part 74 as made applicable by that section; and

(b) The provisions of published grants policy of the Public Health Service.

"National Advisory Mental Health Council" has the meaning ascribed to it by paragraph (4) of section 235 of the Act.

"Nonprofit", as applied to any entity, means a corporation or association, or an entity which is owned and operated by one or more corporations or associations, no part of the net earnings of which inures or may lawfully inure to the benefit of any private shareholder or individual.

"Population", with respect to any State or part of a State, means the population thereof as determined by the Secretary on the basis of the latest figures certified by the Department of Commerce.

"Regulations"

means regulations

promulgated by the Secretary. "Secretary" means the Secretary of Health and Human Services or the Secretary's delegate.

"State" and "State agency" have the meaning ascribed to them by paragraphs (1) and (2), respectively, of section 235 of the Act.

"State plan" means the plan of the State which is submitted to the Secretary for approval under section 237 of the Act.

[45 FR 48480, July 18, 1980, as amended at 46 FR 48595, Oct. 1, 1981]

§ 54.103 How are urban or rural poverty areas designated?

(a) Purpose. This section establishes the procedure for designating catchment areas in each State as urban or rural poverty areas (except for purposes of grants under section 203(e) of the Act).

(b) Definitions. For purposes of this section:

(1) "Population" does not include any of the groups excluded by the Department of Commerce for purposes of determining persons having incomes below the poverty cutoffs (for the 1970 Census, the groups excluded were "inmates of institutions, members of the Armed Forces living in barracks, college students in dormitories, and unrelated individuals under 14 years").

(2) "Poverty cutoffs" means (i) in the case of the 50 States, the District of Columbia, and Puerto Rico, the annual income levels established by the Department of Commerce for purposes of determining poverty status for various members of the population, and (ii) in the case of American Samoa, Guam, the Northern Mariana Islands, the Trust Territory of the Pacific Islands, and Virgin Islands, the annual income levels which the Secretary determines are as comparable as possible in the light of the data available therefrom, to those annual income levels established by the Department of Commerce for the 50 States, the District of Columbia, and Puerto Rico. (3) "Subarea" means that part of a catchment area for which data are available that are satisfactory to the Secretary for purposes of determining