"PART B-SURVEYS AND PLANNING

"AUTHORIZATION OF APPROPRIATION

"SEC. 611. In order to assist the States in carrying out the purposes of section 601 (a), there is hereby authorized to be appropriated the sum of $5,000,000, and such further sum as may be necessary to carry out the provisions of section 613 (b), such sums to remain available until expended. The sums appropriated under this section shall be used for making payments to States which have submitted, and had approved by the Surgeon General, State applications for funds for carrying out such purposes.

"STATE APPLICATIONS

"SEC. 612. (a) To be approved, a State application for funds for carrying out the purposes of section 601 (a) must

"(1) designate a single State agency as the sole agency for carrying out such purposes: Provided, That after a State plan has been approved under section 623, any further survey or programing functions shall be carried out, pursuant to section 623 (a) (10), by the agency designated in accordance with section 623 (a) (1);

"(2) provide for the designation of a State advisory council, which shall include representatives of nongovernment organizations or groups, and of State agencies, concerned with the operation, construction, or utilization of hospitals, including representatives of the consumers of hospital services selected from among persons familiar with the need for such services in urban or rural areas, to consult with the State agency in carrying out such purposes;

“(3) provide for making an inventory and survey in accordance with section 601 (a) containing all information required by the Surgeon General, and for developing a program in accordance with section 601 (a) and with regulations prescribed under section 622; and

"(4) provide that the State agency will make such reports, in such form and containing such information, as the Surgeon General may from time to time reasonably require, and give the Surgeon General, upon demand, access to the records on which such reports are based.

"(b) The Surgeon General shall approve any application for funds which complies with the provisions of subsection (a).

"ALLOTMENTS TO STATES

"SEC. 613. (a) Each State for which a State application under section 612 has been approved shall be entitled to an allotment of such proportion of any appropriation (other than an appropriation to carry out the purposes of subsection (b) of this section) made pursuant to section 611 as its population bears to the population of all the States, and within such allotment it shall be entitled to receive 50 per centum of its expenditures in carrying out the purposes of section 601 (a) in accordance with its application: Provided, That no such allotment to any State shall be less than $10,000. The Surgeon General shall from time to time estimate the sum to which each State will be entitled under this section, during such ensuing period as he may determine, and shall thereupon certify to the Secretary of the Treasury the amount so estimated, reduced ,or increased, as the case may be, by any sum by which the Surgeon General finds that his estimate for any prior period was greater or less than the amount to which the State was entitled for such period. The Secretary of the Treasury shall thereupon, prior to audit or settlement by the General Accounting Office, pay to the State, at the time or times fixed by the Surgeon General, the amount so certified.

"(b) If at the time of the submission by any State of an application for funds under this part the Governor shall certify to the Surgeon General that no funds are available for carrying out the purposes of section 601 (a) in such State other than funds to be received under this part, and if the application by such State shall be approved in accordance with section 612 (b), the Surgeon General shall make an additional allotment to such State, equal to its allotment under subsection (a). In any such case the State shall be entitled to receive, within its allotment under this subsection, an additional 50 per centum of its expendi

tures in carrying out the purposes of section 601 (a) in accordance with its application Estimates, certifications, and payments shall be made in the manner provided in subsection (a). An amount equal to 50 per centum of the actual expenditures of such State for carrying out the purposes of section 601 (a), less the amount of any repayment which shall have been made by the State to the Treasury of the United States, shall be deducted from any allotment or allotments to such State under section 624.

"(c) Any funds paid to a State under this section and not expended for the purposes for which paid shall be repaid to the Treasury of the United States.

"PART C-CONSTRUCTION OF HOSPITALS AND RELATED FACILITIES

"AUTHORIZATION OF APPROPRIATIONS

"SEC. 621. In order to assist the States in carrying out the purposes of section 601 (b) there is hereby authorized to be appropriated for the fiscal year ending June 30, 1947, and for each of the four succeeding fiscal years, the sum of $75,000,000 for the construction of public and other nonprofit hospitals; and there are further authorized to be appropriated for such construction the sums provided in section 624. The sums appropriated pursuant to this section shall be used for making payments to States which have submitted, and had approved by the Surgeon General, State plans for carrying out the purposes of section 601 (b); and for making payments to political subdivisions of, and public or other nonprofit agencies in, such States.

"GENERAL REGULATIONS

"SEC. 622. Within six months after the enactment of this title, the Surgeon General, with the approval of the Federal Hospital Council and the Administrator, shall be general regulation prescribe

"(a) The number of general hospital beds required to provide adequate hospital services to the people residing in a State, and the general method or methods by which such beds shall be distributed among base areas, intermediate areas, and rural areas: Provided, That for the purposes of this title, the total of such beds for any State shall not exceed four and one-half per thousand population, except that in States having less than twelve and more than six persons per square mile the limit shall be five beds per thousand population, and in States having six persons or less per square mile the limit shall be five and one-half beds per thousand population; but if, in any area (as defined in the regulations) within the State, there are more beds than required by the standards prescribed by the Surgeon General, the excess over such standards may be eliminated in calculating this maximum allowance.

"(b) The number of beds required to provide adequate hospital services for tuberculosis patients, mental patients, and chronic-disease patients in a State, and the general method or methods by which such beds shall be distributed throughout the State: Provided, That for the purposes of this title the total number of beds for tuberculous patients shall not exceed two and one-half times the average annual deaths from tuberculosis in the State over the five-year period from 1940 to 1944, inclusive, the total number of beds for mental patients shall not exceed five per thousand population, and the total number of beds for chronic disease patients shall not exceed two per thousand population.

"(c) The number of public health centers and the general method of distribution of such centers throughout the State, which, for the purposes of this title, shall not exceed one per thirty thousand population, except that in States having less than twelve persons per square mile, it shall not exceed one per twenty thousand population.

"(d) The general manner in which the State agency shall determine the priority of projects based on the relative need of different sections of the population and of different areas lacking adequate hospital facilities, giving special consideration to hospitals serving rural communities and areas with relatively small financial

resources.

"(e) General standards of construction and equipment for hospitals of different classes and in different types of location.

"(f) That the State plan shall provide for adequate hospital facilities for the people residing in a State, without discrimination on account of race, creed, or color, and shall provide for adequate hospital facilities for persons unable to pay therefor. Such regulation may require that before approval of any appli

ration for a hospital or addition to a hospital is recommended by a State agency, assurance shall be received by the State from the applicant that (1) such hospital or addition to a hospital will be made available to all persons residing in the territorial area of the applicant, without discrimination on account of race, creed, or color, but an exception shall be made in cases where separate hospital facilities are provided for separate population groups, if the plan makes equitable provision on the basis of need for facilities and services of like quality for each such group; and (2) there will be made available in each such hospital or addition to a hospital a reasonable volume of hospital services to persons unable to pay therefor, but an exception shall be made if such a requirement is not feasible from a financial standpoint.

"(g) General methods of administration of the plan by the designated State agency, subject to the limitations set forth in section 623 (a) (6) and (8).

"STATE PLANS

"SEC. 623. (a) After such regulations have been issued, any State desiring to take advantage of this part may submit a State plan for carrying out the purposes of section 601 (b). Such State plan must―

"(1) designate a single State agency as the sole agency for the administration of the plan, or designate such agency as the sole agency for supervising the administration of the plan;

“(2) contain satisfactory evidence that the State agency designated in accordance with paragraph (1) hereof will have authority to carry out such plan in conformity with this part;

"(3) provide for the designation of a State advisory council which shall include representatives of nongovernment organizations or groups, and of State agencies, concerned with the operation, construction, or utilization of hospitals, including representatives of the consumers of hospital services selected from among persons familiar with the need for such services in urban or rural areas, to consult with the State agency in carrying out such plans;

"(4) set forth a hospital construction program (A) which is based on a State-wide inventory of existing hospitals and survey of need; (B) which conforms with the regulations prescribed by the Surgeon General under section 622 (a), (b), and (c); (C) which, in the case of a State which has developed a program under part B of this title, conforms to the program so developed except for any modification required in order to comply with regulations prescribed pursuant to section 622 (a), (b), and (c), and except for any modification recommended by the State agency designated pursuant to paragraph (1) of this subsection and approved by the Surgeon General; and (D) which meets the requirements as to lack of discrimination on account of race, creed, or color, and for furnishing needed hospital services to persons unable to pay therefor, required by regulations prescribed under section 622 (f):

'(5) set forth the relative need determined in accordance with the regulations prescribed under section 622 (d) for the several projects included in such programs, and provide for the construction, insofar as financial resources available therefor and for maintenance and operation make possible, in the order of such relative need;

"(6) provide such methods of administration of the State plan, including methods relating to the establishment and maintenance of personnal standards on a merit basis (except that the Surgeon General shall exercise no authority with respect to the selection, tenure of office, or compensation of any individual employed in accordance with such methods), as the Surgeon General prescribes by regulation under section 622 (g);

"(7) provide minimum standards (to be fixed in the discretion of the State) for the maintenance and operation of hospitals which receive Federal aid under this part;

"(8) provide for affording to every applicant for a construction project an opportunity for hearing before the State agency;

'(9) provide that the State agency will make such reports in such form and containing such information as the Surgeon General may from time to time reasonably require, and give the Surgeon General, upon demand, access to the records upon which such information is based; and

"(10) provide that the State agency will from time to time review its hospital construction program and submit to the Surgeon General any modifications thereof which it considers necessary.

"(b) The Surgeon General shall approve any State plan and any modification thereof which complies with the provisions of subsection (a). If any such plan or modification thereof shall have been disapproved by the Surgeon General for failure to comply with subsection (a), the Federal Hospital Council shall, upon request of the State agency, afford it an opportunity for hearing. If such Council determines that the plan or modification complies with the provisions of such subsection, the Surgeon General shall thereupon approve such plan or modification.

"(c) No changes in a State plan shall be required within two years after initial approval thereof, or within two years after any change thereafter required therein, by reason of any change in the regulations prescribed pursuant to section 622, except with the consent of the State, or in accordance with further action by the Congress.

"(d) If any State, prior to July 1, 1947, has not enacted legislation providing that compliance with minimum standards of maintenance and operation shall be required in the case of hospitals which shal have received Federal aid under this title, such State shall not be entitled to any further allotments under section 624.

"ALLOTMENTS TO STATES

"SEC. 624. Each State for which a State plan has been approved prior to or during a fiscal year shall be entitled for such year to an allotment of a sum bearing the same ratio to the sums authorized to be appropriated pursuant to section 621 for such year as the product of (a) the population of such State and (b) the square of its Federal percentage bears to the sum of the corresponding products for all of the States. The amount of the allotment to a State shall be available, in accordance with the provisions of this part, for payment of such State's Federal percentage of the cost of approved projects within such State. The Surgeon General shall calculate the allotments to be made under this section and notify the Secretary of the Treasury of the amounts thereof. Sums allotted to a State for a fiscal year for construction and remaining unencumbered at the end of such year shall remain available to such State for such purpose for the next fiscal year (and for such year only), in addition to the sums allotted for such State for such next fiscal year. Any amount of the sum authorized to be appropriated for a fiscal year which is not appropriated for such year, or which is not allotted in such year by reason of the failure of any State or States to have plans approved under this part, and any amount allotted to a State but remaining unencumbered at the end of the period for which it is available to such State, is hereby authorized to be appropriated for the next fiscal year in addition to the sum otherwise authorized under section 621.

"APPROVAL OF PROJECTS AND PAYMENTS FOR CONSTRUCTION

"SEC. 625. (a) For each project for construction pursuant to a State plan approved under this part, there shall be submitted to the Surgeon General through the State agency an application by the State or a political subdivision thereof or by a public or other nonprofit agency. Such application shall set forth (1) a description of the site for such project, (2) plans and specifications therefor in accordance with the regulations prescribed by the Surgeon General under section 622 (e), (3) reasonable assurance that title to such site is or will be vested solely in the applicant, (4) reasonable assurance that adequate financial support will be available for the construction of the project and for its maintenance and operation when completed, and (5) reasonable assurance that the rates of pay for laborers and mechanics engaged in construction of the proiect will be not less than the prevailing local wage rates for similar work as determined in accordance with Public Law 403 of the Seventy-fourth Congress, approved August 30, 1935, as amended. The Surgeon General shall approve such application if sufficient funds for the Federal percentage of the cost of construction of such project are available from the allotment to the State, and if the Surgeon General finds (A) that the application contains such reasonable assurance as to title, financial support, and payment of prevailing rates of wages. (B) that the plans and specifications are in accord with the regulations prescribed pursuant to section 622, (C) that the application is in conformity with the State plan approved under section 623 and contains an assurance that the applicant will conform to the applicable requirements of the State plan and of the regulations prescribed pursuant to section 622 (f) regarding the provision of facilities without discrimination on account of race, creed, or color, and for furnishing needed hospital facilities for persons unable to pay therefor, and an assurance that the applicant will conform to State

standards for operation and maintenance, and (D) that it has been recommended by the State agency and is entitled to priority over other projects within the State in accordance with the regulations prescribed pursuant to section 622 (d). No application shall be disapproved until the Surgeon General has afforded the applicant and the State agency an opportunity for a hearing.

"(b) Upon approving an application under this section, the Surgeon General shall certify to the Secretary of the Treasury an amount equal to the Federal percentage of the estimated cost of construction of the project and designate the appropriation from which it is to be paid. Such certification shall provide for payment to the State, except that if the State is not authorized by law to make payments to the applicant the certification shall provide for payment direct to the applicant. Upon certification by the State agency, based upon inspection by it, that work has been performed upon a project, or purchases have been made, in accordance with the approved plans and specifications, and that payment of an installment is due to the applicant, the Surgeon General shall certify such installment for payment by the Secretary of the Treasury; except that if the Surgeon General, after investigation or otherwise, has ground to believe that a default has occurred requiring action pursuant to section 632 (a) he may, upon giving notice of hearing pursuant to such subsection, withhold certification pending action based on such hearing.

"(c) Amendment of any approved application shall be subject to approval in the same manner as an original application. Certification under subsection (b) may be amended, either upon approval of an amendment of the application or upon revision of the estimated cost of a project. An amended certification may direct that any additional payment may be made from the applicable allotment for the fiscal year in which such amended certification is made.

“(d) The funds paid under this section for the construction of an approved project shall be used solely for carrying out such project as so approved.

"(e) If any hospital for which funds have been paid under this section shall, at any time within twenty years after the completion of construction, (A) be sold or transferred to any person, agency, or organization, (1) which is not qualified to file an application under this section, or (2) which is not approved as a transferee by the State agency designated pursuant to section 623 (a) (1), or its successor, or (B) cease to be a nonprofit hospital as defined in section 631 (g), the United States shall be entitled to recover from either the transferor or the transferee (or, in the case of a hospital which has ceased to be a nonprofit hospital, from the owners thereof) the Federal percentage of the then value of such hospital, as determined by agreement of the parties or by action brought in the district court of the United States for the district in which such hospital is situated.

"PART D-MISCELLANEOUS

"DEFINITIONS

"SEC. 631. For the purposes of the title

"(a) the Federal percentage with respect to any State shall be 100 per centum less the non-Federal percentage; and the non-Federal percentage shall be that percentage which bears the same ratio to 50 per centum as the per capita income of such State bears to the per capita income of the continental United States (excluding Alaska), except that (1) the nonFederal percentage shall in no case be more than 663 per centum or less than 25 per centum, and (2) the non-Federal percentage for Alaska and Hawaii shall be 50 per centum each, and the non-Federal percentage for Puerto Rico shall be 25 per centum ;

"(b) the Federal percentages shall be promulgated by the Surgeon General between July 1 and August 31 of each even-numbered year, on the basis of the average of the per capita incomes of the States and of the continental United States for the three most recent consecutive years for which satisfactory data are available from the Department of Commerce. Such promulgation shall be conclusive for each of the two fiscal years in the period beginning July 1 next succeeding such promulgation: Provided, That the Surgeon General shall promulgate such percentages as soon as possible after the enactment of this title, which promulgation shall be conclusive for the fiscal year ending June 30, 1947:

"(c) the population of the several States shall be determined on the basis of the latest figures certified by the Department of Commerce;

"(d) the term 'State' includes Alaska, Hawaii, Puerto Rico, and the District of Columbia;