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"(e) the term 'hospital (except as used in section 622 (a) (b)) includes public health centers and general, tuberculosis, mental, chronic disease, and other types of hospitals, and related facilities, such as laboratories, outpatient departments, nurses' home and training facilities, and central service facilities operated in connection with hospitals, but does not include any hosptal furnishing primarily domicilary care;

"(f) the term 'publc health center' means a publicly owned facility for the provision of public health services, including related facilities such as laboratories, clinics, and administrative offices operated in connection with public health centers;

“(g) the term 'nonprofit hospital' means any hospital owned and operated by a corporation or association, no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual;

"(h) the term 'construction' includes construction of new buildings, expansion, remodeling, and alteration of existing building, initial equipment of any such buildings, and landscaping the site theerof; including architects' fees, legal counsel, and all other expenses incidental to construction, but excluding the cost of off-site improvements and, except with respect to public health centers, the cost of the acquisition of land; and

“(i) the term 'cost of construction' means the amount found by the Surgeon General to be necessary for the construction of a project.


“SEC. 632. (a) Whenever the Surgeon General, after reasonable notice and opportunity for hearing to the State agency designated in accordance with section 612 (a) (1), finds that the State agency is not complying substantially with the provisions required by section 612 (a) to be contained in its application for funds under part B, or after reasonable notice and opportunity for hearing to the State agency designated in accordance with section 623 (a) (1) finds (1) that the State agency is not complying substantially with the provisions required by section 623 (a), or by regulations prescribed pursuant to section 622, to be contained in its plan submitted under section 623 (a), or (2) that any funds have been diverted from the purposes for which they have been allotted or paid, or (3) that any assurance given in an application filed under section 625 is not being or cannot be carried out, or (4) that there is a substantial failure to carry out plans and specifications approved by the Surgeon General under section 625, the Surgeon General may forthwith notify the Secretary of the Treasury and the State agency that no further certification will be made under part B or part C, as the case may be, or that no further certification will be made for any project or projects designated by the Surgeon General as being affected by the default, as the Surgeon General may determine to be appropriate under the circumstances; and, except with regard to any project for which the application has already been approved and which is not directly affected by such default, he may withhold further certifications until there is no longer any failure to comply, or, if compliance is impossible, until the State repays or arranges for the repayment of Federal moneys which have been diverted or improperly expended.

“(b) (1) If the Surgeon General refuses to approve any application under section 625, the applicant, or if any State is dissatisfied with the Surgeon General's action under subsection (a) of this section, such State, may appeal to the United States circuit court of appeals for the circuit in which such State is located. The summons and notice of appeal may be served at any place in the United States. The Surgeon General shall forthwith certify and file in the court the transcript of the proceedings and the record on which he based his action.

(2) The findings of fact by the Surgeon General, unless substantially contrary to the weight of the evidence, shall be conclusive; but the court, for good cause shown, may remand the case to the Surgeon General to take further evidence, and the Surgeon General may thereupon make new or modified findings of fact and may modify his previous action, and shall certify to the court the transcript and record of the further proceedings. Such new or modified findings of fact shall likewise be conclusive unless substantially contrary to the weight of the evidence.

“(3) The court shall have jurisdiction to affirm the action of the Surgeon General or to set it aside, in whole or in part. The judgment of the court shall be subject to review by the Supreme Court of the United States upon certiorari or certification as provided in sections 239 and 240 of the Judicial Code, as amended.

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"FEDERAL HOSPITAL COUNCIL; ADMINISTRATION OF TITLE "SEC. 633. (a) The Surgeon General is authorized to make such administrative regulations and perform such other functions as he finds necessary to carry out the provisions of this title. Any such regulations shall be subject to the approval of the Administrator.

“(b) In administering this title, the Surgeon General shall consult with a Federal Hospital Council consisting of the Surgeon General, who shall serve as Chairman ex officio, and eight members appointed by the Administrator. Five of the eight appointed members shall be persons who are oustanding in fields pertaining to hospital and health activities, three of whom shall be authorities in matters relating to the operation of hospitals, and the other three members shall be appointed to represent the consumers of hospital services and shall be persons familiar with the need for hospital services in urban or rural areas. Each appointed member shall hold office for a term of four years, except that any member appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed for the remainder of such term, and the terms of office of the members first taking office shall expire, as designated by the Administrator at the time of appointment, two at the end of the first year, two at the end of the second year, two at the end of the third year, and two at the end of the fourth year after the date of appointment. An appointed member shall not be eligible to serve continuously for more than two terms but shall be eligible for reappointment if he has not served immediately preceding his reappointment. The Council is authorized to appoint such special advisory and technical committees as may be useful in carrying out its functions. Appointed Council members and members of advisory or technical committees, while serving on business of the Council, shall receive compensation at rates fixed by the Administrator, but not exceeding $25 per day, and shall also be entitled to receive an allowance for actual and necessary travel and subsistence expenses while so serving away from their places of residence. The Council shall meet as frequently as the Surgeon General deems necessary, but not less than once each year.

Upon request by three or more members, it shall be the duty of the Surgeon General to call a meeting of the Council.

"(c) In administering the provisions of this title, the Surgeon General, with approval of the Administrator, is authorized to utilize the services and facilities of any executive department in accordance with an agreement with the head thereof. Payment for such services and facilities shall be made in advance or by way of reimbursement, as may be agreed upon between the Administrator and the head of the executive department furnishing them.


"SEC. 634. Whenever in his opinion the purposes of this title would be promoted by a conference, the Surgeon General may invite representatives of as many State agencies, designated in accordance with section 612 (a) (1) or section 623 (a) (1), to confer as he deems necessary or proper. Upon the application of five or more of such State agencies, it shall be the duty of the Surgeon General to call a conference of representatives of all State agencies joining in the request. A conference of the representatives of all such State agencies shall be called annually by the Surgeon General.


“Sec. 635. Except as otherwise specifically provided, nothing in this title shall be construed as confering on any Federal officer or employee the right to exercise any supervision or control over the administration, personnel, maintenance, or operation of any hospital with respect to which any funds have been or may be expended under this title."

SEC. 3. Section 1 of the Public Health Service Act is amended to read :

"SECTION 1. Titles I to VI, inclusive, of this Act may be cited as the 'Public Health Service Act'."

SEC. 4. The Act of July 1, 1944 (58 Stat. 682), is hereby further amended by changing the number of title VI to title VII and by changing the numbers of section 601 to 612, inclusive, and references thereto, to sections 701 to 712, respectively. Passed the Senate December 11 (legislative day, October 29), 1945.





Mr. HARRIS. This bill has passed the Senate. It was introduced in that body by Senator Hill of Alabama and Senator Burton of Ohio, and extensive hearings were held before the Senate Committee on Education and Labor.

In an effort to proceed as expeditiously as possible with this important legislation, it seemed the part of wisdom to use the Senate bill already passed, as a basis of our hearings. I should like, however, at this point to state that a number of House bills, all dealing with this subject, have been introduced during the past several months. A few days ago, I introduced H. R. 5268 which in most particulars is identical with the bill already paşsed by the Senate, but which contains some amendments I felt should be given full consideration by the Committee.

Mr. Brown. I would like you to read the other bill before considering it.

Mr. HARRIS. Without objection I will proceed to read the statement.

Before beginning with our first witness, I should like to make a brief analysis of the bill

before us and a few observations regarding its general purposes and its significance.

The bill amends the Public Health Service Act (Public Law 410, 58 Stat. 682) by adding to that act a new title under which the provisions of the bill are made. This places responsibility for administration of the program on the Surgeon General of the U. S. Public Health Service, working under the over-all supervision of the Federal Security Administration.

The bill provides, however (Sec. 633) that the Surgeon General, in administering the program, shall consult with a Federal hospital council, made up of the Surgeon General, as chairman, ex-officio, and eight members, broadly representative, appointed by the Administrator. In addition to advising the Surgeon General, the council is authorized to (a) approve all general regulations issued by the Surgeon General, applicable to standards and general requirements imposed on the States; (b) hold 'hearings on appeals, when made by a State agency, by reason of a State plan having been disapproved by the Surgeon General; and when deciding that the facts warrant it, reverse the action taken by the Surgeon General.

Mr. Brown. I wonder if the committee could have an opportunity to read the statement. I understood this committee hearing

was called for the purpose of considering S. 191. If it is called for the consideration of some other bill that we have not had an opportunity to study, and the testimony is going to be submitted on a measure other than for that for which the committee is here, then I shall make a motion to adjourn and to set a date at some future time when the committee may have an opportunity to be informed upon what legislation is pending before it.

If we are going to discuss S. 191, then we shall discuss S. 191. If we are going to discuss some other bill, then I must insist upon a new committee hearing being called and time set for consideration of whatever other bill may come before us.

We can discuss all of the amendments in the world that we want to S. 191 if we are going to conduct the hearing on it, but I cannot understand this situation where a statement is put in, in support of some other bill, in connection with this S. 191, and the testimony of the witness is based upon that statement, especially when the committee

itself has not had an opportunity to study the statement or the new bill.

Mr. HARRIS. I would not want any member of the committee to have a misunderstanding about this situation, because the first statement that was made was that the hearing was called on S. 191. The chairman of this subcommittee also stated that he had introduced a companion bill, H. R. 5268, which, in most particulars, is identical with this bill, already passed by the Senate.

So we consider it the same legislation.

Mr. Brown. It could not very well, Mr. Chairman, be a companion bill. S. 191 reached the House of Representatives last December after pending in the Senate for a number of months, and H. R. 5268 was not introduced until February 28, 1946, which was only about a week ago, and we have not had an opportunity to study it.

Mr. HARRIS. Without objection, the further reading of the statement will be dispensed with and it will be placed in the record.

In addition, the bill requires the Surgeon General to convene at least annually, and more frequently if necessary, a conference of representatives of all the State agencies to advise and consult on matters pertaining to the work.

The essential provisions of the bill are designed to serve two broad purposes :

1. To assist the States to determine their hospital and health center needs through State-wide surveys and to develop, on the basis of the exact knowledge thus gained, State-wide plans for the construction of facilities needed to supplement existing facilities in order to serve all of the people, and

2. To aid in the construction of those facilities that are determined to be necessary in the course of the State-wide survey, and which are in conformity with the construction program constituting the approved State-wide plan.

In order to assist the States in carrying out the first purpose, the bill—sec. 611-authorizes an appropriation of $5,000,000 to be allotted to the 48 States, the District of Columbia, Puerto Rico, Alaska, and Hawaii, on a population basis, except that for this purpose no State will receive an allotment of less than $10,000.

For a State to receive an allotment for this purpose (survey and planning), it is required:

1. To designate a single agency of the State to conduct a survey of needs and to prepare a State-wide program of construction.

2. To provide for a State advisory council, broadly representative, to advise the State agency on matters concerned with the several phases of the State-wide

program. 3. To provide such pertinent information relative to the needs for construction as the Surgeon General may require in accordance with regulations authorized.

In order to assist the States in carrying out the second purpose (construction), the bill proposes a five-year construction program, and authorizes annual appropriations of $75,000,000 for each of the fiscal years 1947 to 1951, inclusive, plus unappropriated or unexpended balances.

Section 622 provides that within six months after enactment of the bill, the Surgeon General, with the approval of the hospital council and the Federal Security Administrator, shall issue general regula


tions having to do with the number of hospital beds and public health centers required to provide needed services, and the general method of distribution of such facilities; the general manner in which the State agency determines the priority of projects; general standards of construction and equipment; and general methods of administration of the plan by the State agency.

For a State to receive funds for construction, it would be required to formulate and have approved by the Surgeon General a State-wide plan. This plan, in order for it to be approved by the Surgeon General must include the following features:

1. A single State agency designated to administer or supervise the administration of the construction program, and with demonstrable evidence that the agency so designated will have the necessary authority to exercise these duties.

2. A State advisory council to consult with the State agency in carrying out the plan.

3. A construction program presented by the State agency to the Surgeon General and based on a survey of need and in conformance with regulations promulgated by the Surgeon General. In such gram there must also be set forth priority needs as between the several individual projects.

4. Methods of administration, minimum standards for maintenance and operation, and systems of reports set forth as may be required by regulations.

5. Machinery established for affording applicants opportunity for hearing before the State agency.

Allotments of Federal funds among the several States would be made on the basis of a formula stated in section 624. The essential elements of the formula are population and financial capacity. Under this formula the Federal percentage of project costs would vary in proportion to the per capita income of the State, but with the maximum percentage specified as 75 and the minimum as 3313.

For individual projects to be approved, the applicant would be required to give reasonable assurances as to title of site, plans and specifications, and adequate financial support, both for construction and for maintenance and operation when completed. Opportunity for hearing before the Federal hospital council would be required before an individual project application could be rejected by the Surgeon General.

Funds paid by the Federal Government for any project could be used only for carrying out that project. The bill provides that if within 20 years after completion, a facility is transferred to an owner which would not have been eligible as an applicant, the Federal Government may recover in a district court the same percentage of its then value as the percentage it originally paid of the project cost.

With the above construction which I have placed on the several provisions of the bill, I should like to add a few brief general observations.

Although there are certain provisions in the bill which may well be amended to advantage, I consider that on the whole it is an unusually well-conceived legislative document, expressing very clearly and succinctly one of the major health problems facing the country today.

My particular interest in this specific legislation stems from the fact that in my own State of Tennessee, the problem of the lack of adequate

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