"AMOUNT OF CONSTRUCTION GRANT; PAYMENTS

"SEC. 803. (a) The amount of any grant for a construction project under this part shall be such amount as the Surgeon General determines to be appropriate after obtaining the advice of the Council; except that (A) in the case of a grant for a project for a new school, and in the case of a grant for a project for new facilities for an existing school in cases where such facilities are of particular importance in providing a major expansion of training capacity, as determined in accordance with regulations, such amount may not exceed 66% per centum of the necessary cost of construction, as determined by the Surgeon General, of such project; and (B) in the case of any other grant, such amount may not exceed 50 per centum of the necessary cost of construction, as so determined, of the project with respect to which the grant is made.

"(b) Upon approval of any application for a grant for a construction project under this part, the Surgeon General shall reserve, from any appropriation available therefor, the amount of such grant as determined under subsection (a); the amount SO reserved may be paid in advance or by way of reimbursement, and in such installments consistent with construction progress, as the Surgeon General may determine. The Surgeon General's reservation of any amount under this section may be amended by him, either upon approval of an amendment of the application or upon revision of the estimated cost of construction of the facility.

"(c) In determining the amount of any such grant under this part, there shall be excluded from the cost of construction an amount equal to the sum of (1) the amount of any other Federal grant which the applicant has obtained, or is assured of obtaining, with respect to the construction which is to be financed in part by grants authorized under this part, and (2) the amount of any non-Federal funds required to be expended as a condition of such other Federal grant.

"RECAPTURE OF PAYMENTS

"SEC. 804. If, within ten years after completion of any construction for which funds have been paid under this part

"(a) the applicant or other owner of the facility shall cease to be a public or nonprofit private school, or

"(b) the facility shall cease to be used for the training purposes for which it was constructed (unless the Surgeon General determines, in accordance with regulations, that there is good cause for releasing the applicant or other owner from the obligation to do so), or

"(c) the facility is used for sectarian instruction or as a place for religious worship.

the United States shall be entitled to recover from the applicant or other owner of the facility the amount bearing the same ratio to the then value (as determined by agreement of the parties or by action brought in the United States district court for the district in which such facility is situated) of the facility, as the amount of the Federal participation bore to the cost of construction of such facility.

"PLANNING GRANTS AND TECHNICAL ASSISTANCE

"SEC. 805. (a) There is authorized to be appropriated the sum of $4,400,000 to enable the Surgeon General to make grants during the fiscal year ending June 30, 1965, and the next fiscal year to State, interstate, regional, or local area agencies for not more than 66% per centum of the cost of planning new, expanded, or improved programs of nurse training, including the cost of surveying their needs for construction of facilities therefor and of developing programs for construction of such needed facilities.

"(b) In carrying out the purposes of this part, and to further the development of State, interstate, regional, or local area planning of programs for relieving shortages of personnel or training capacity in the various fields of nursing. through constructing teaching facilities, providing adequate financial support for schools, or otherwise, the Surgeon General is authorized to provide technical assistance and consultative services to State, interstate, regional, or local area planning agencies established for any of such purposes.

"IMPROVEMENT IN NURSE TRAINING AND SERVICES

"SEC. 806. (a) There are authorized to be appropriated for grants to public or nonprofit private agencies, organizations, or institutions,

"(1) for projects for development of new or improved methods of training nurses in any of the various fields of nursing or of recruiting persons to undergo such training or for improving utilization of nursing personnel, and "(2) in the case of schools of nursing, for projects to strengthen, improve, or expand their programs of nurse training, $3,800,000 for the fiscal year ending June 30, 1965, $10,000,000 for the fiscal year ending June 30, 1966, $15,000,000 for the fiscal year ending June 30, 1967, and each of the next two fiscal years, and such sums for each of the next four fiscal years as may be necessary to complete projects for which a grant was made under this section from funds appropriated for the fiscal year ending June 30, 1969, or any preceding year.

"(b) In determining whether to approve applications for grants described in clause (2) of subsection (a), the order in which to approve such applications, and the amount of the grants, the Surgeon General shall give consideration to the extent to which such projects will contribute to general improvement of the quality of the training of nurses of the kind involved, the extent to which they will aid in attaining a wider geographical distribution throughout the United States of high quality schools of the type involved, and the relative need in the area in which the school is situated and surrounding areas for nurses of the type trained in such school.

"(c) No grant may be made under this section for any project for any period after grants have been made with respect to such project for five fiscal years.

"PART B-ASSISTANCE TO NURSING STUDENTS

"TRAINEESHIPS FOR ADVANCED TRAINING OF PROFESSIONAL NURSES

"SEC. 821. (a) There are authorized to be appropriated for the fiscal year ending June 30, 1965, and for each of the next four fiscal years, such sums as may be necessary to cover the cost of traineeships for the training of professional nurses to teach in the various fields of nurse training (including practical nurse training), to serve in administrative or supervisory capacities, or to serve in other professional nursing specialties determined by the Surgeon General to require advanced training.

"(b) Traineeships under this section shall be awarded by the Surgeon General through grants to public or nonprofit private institutions providing the training.

"(c) Payments to institutions under this section may be made in advance or by way of reimbursement, and at such intervals and on such conditions, as the Surgeon General finds necessary. Such payments may be used only for traineeships and shall be limited to such amounts as the Surgeon General finds necessary to cover the costs of tuition and fees, and a stipend and allowances (including travel and subsistence expenses) for the trainees.

"UNDERGRADUATE SCHOLARSHIPS FOR STUDENTS OF NURSING

"SEC. 822. (a) For the purpose of stimulating nationwide interest among highly qualified secondary school graduates in attending public or nonprofit private collegiate schools of nursing, there are authorized to be appropriated to the Secretary of Health, Education, and Welfare for each fiscal year such sums as may be necessary to enable the Secretary, during the fiscal year ending June 30, 1965, and each of the next four fiscal years, to award scholarships to such graduates who are in need of the amount of the scholarship to undertake full-time training in public or nonprofit private collegiate schools of nursing of their choice.

"(b) The number of scholarships to be awarded by the Secretary of Health, Education, and Welfare during each fiscal year shall be allotted as follows: He shall allot to each State, for award to secondary school graduates domiciled in such State, a number of scholarships bearing the same ratio to one thousand as the number of persons who graduated from secondary schools in such State in such year bears to the number of such persons who graduated from secondary schools in all the States in such year, except that (1) if the number so allotted to any State is less than five it shall be increased to five, and (2) if the number al

lotted to any State under the preceding provisions of this subsection is not a whole number, it shall be increased to the next higher whole number. The number of such secondary school graduates shall be estimated by the Secretary on the basis of the best information available to him.

"(c) Such scholarships may be awarded for a period not in excess of the length of time required by the recipient to complete his basic course of study. The amount of the scholarship of any person for any academic year or its equivalent (which in any case may not exceed $1,000) shall be based on his need for financial assistance during such year or its equivalent.

"(d) The selection of individuals in each State to be awarded scholarships under this section shall be made according to their relative ability to complete successfully a program of nurse training in a collegiate school of nursing as determined on the basis of nationwide objective tests conducted at such times and places and in such manner as the Secretary of Health, Education, and Welfare shall determine. The Secretary is authorized to enter into contracts with any recognized college examining agency or agencies for the conduct of any such test or tests, and for the obtaining of such information as may be necessary to determine the relative need of applicants.

"LOAN AGREEMENTS

“SEC. 823. (a) The Secretary of Health, Education, and Welfare is authorized to enter into an agreement for the establishment and operation of a student loan fund in accordance with this part with any public or nonprofit private school of nursing which is located in a State.

"(b) Each agreement entered into under this section shall

"(1) provide for establishment of a student loan fund by the school; "(2) provide for deposit in the fund of (A) the Federal capital contribu tions paid under this part to the school by the Secretary, (B) an additional amount from other sources equal to not less than one-ninth of such Federal capital contributions, (C) collections of principal and interest on loans made from the fund, and (D) any other earnings of the fund;

"(3) provide that the fund shall be used only for loans to students of the school in accordance with the agreement and for costs of collection of such loans and interest thereon;

"(4) provide that loans may be made from such fund only to students pursuing a full-time course of study at the school leading to a baccalaureate or associate degree in nursing or an equivalent degree or a diploma in nursing, or to a graduate degree in nursing, and that while the agreement remains in effect no such student who has attended such school before July 1, 1969, shall receive a loan from a loan fund established under section 204 of the National Defense Education Act of 1958; and

"(5) contain such other provisions as are necessary to protect the financial interests of the United States.

"LOAN PROVISIONS

"SEC. 824. (a) The total of the loans for any academic year (or its equivalent, as determined under regulations of the Secretary) made by schools of nursing from loan funds established pursuant to agreements under this part may not exceed $1,000 in the case of any student in a collegiate school of nursing, or $500 in the case of any other student. In the granting of such loans, a school shall give preference to persons who enter as first-year students after enactment of this title.

"(b) Loans from any such student loan fund by any school shall be made on such terms and conditions as the school may determine; subject, however, to such conditions, limitations, and requirements as the Secretary of Health, Education, and Welfare may prescribe (by regulation or in the agreement with the school) with a view to preventing impairment of the capital of such fund to the maximum extent practicable in the light of the objective of enabling the student to complete his course of study; and except that

"(1) such a loan may be made only to a student who (A) is in need of the amount of the loan to pursue a full-time course of study at the school leading to a baccalaureate or associate degree in nursing or an equivalent degree, or a diploma in nursing, or a graduate degree in nursing, and (B) is capable, in the opinion of the school, of maintaining good standing in such course of study;

"(2) such a loan shall be repayable in equal or graduated periodic installments (with the right of the borrower to accelerate repayment) over the tenyear period which begins one year after the student ceases to pursue a fulltime course of study at a school of nursing, except that (A) interest shall not accrue on any such loan, and periodic installments need not be paid, during any period during which the borrower is pursuing a full-time course of study at a collegiate school of nursing leading to a baccalaureate degree in nursing or an equivalent degree, or to a graduate degree in nursing, and (B) any such period shall not be included in determining such ten-year period;

"(3) not to exceed 60 per centum of any such loan (plus interest) shall be canceled for full-time employment as a professional nurse (including teaching in any of the fields of nurse training and service as an administrator, supervisor, or consultant in any of the fields of nursing) in any public or nonprofit private institution or agency, at the rate of 10 per centum of the amount of such loan plus interest thereon, which was unpaid on the first day of such service, for each complete year of such service;

"(4) the liability to repay the unpaid balance of such loan and accrued interest thereon shall be canceled upon the death of the borrower, or if the Secretary determines that he has become permanently and totally disabled; "(5) such a loan shall bear interest on the unpaid balance of the loan, computed only for periods during which the loan is repayable, at the rate of 3 per centum per annum or the going Federal rate at the time the loan is made, whichever is the greater; and for purposes of this paragraph, the term 'going Federal rate' means the rate of interest which the Secretary of the Treasury specifies during June of each year for purposes of loans made during the fiscal year beginning on the next July 1, determined by estimating the average yield to maturity, on the basis of daily closing market quotations or prices during the preceding May on all outstanding marketable obligations of the United States having a maturity date of fifteen or more years from the first day of such month of May, and by rounding off such estimated average annual yield to the next higher multiple of one-eighth of 1 per centum.

"(6) such a loan shall be made without security or endorsement, except that it the borrower is a minor and the note or other evidence of obligation executed by him would not, under the applicable law, create a binding obligation, either security or endorsement may be required;

"(7) no note or other evidence of any such loan may be transferred or assigned by the school making the loan except that, if the borrower transfers to another school participating in the program under this part, such note or other evidence of a loan may be transferred to such other school. "(c) Where all or any part of a loan, or interest, is canceled under this section, the Secretary of Health, Education, and Welfare shall pay to the school an amount equal to the school's proportionate share of the canceled portion, as determined by the Secretary.

"(d) Any loan for any year by a school from a student loan fund established pursuant to an agreement under this part shall be made in such installments as may be provided in regulations of the Secretary or such agreement and, upon notice to the Secretary by the school that any recipient of a loan is failing to maintain satisfactory standing, any or all further installments of his loan shall be withheld, as may be appropriate.

"(e) An agreement under this part with any school shall include provisions designed to make loans from the student loan fund established thereunder reasonably available (to the extent of the available funds in such fund) to all eligible students in the school in need thereof.

"AUTHORIZATION OF APPROPRIATIONS FOR LOANS

"SEC. 825. There are authorized to be appropriated to the Secretary of Health, Education, and Welfare for Federal capital contributions to student loan funds pursuant to section 823 (b) (2) (A) $3,100,000 for the fiscal year ending June 30, 1965, $8,900,000 for the fiscal year ending June 30, 1966, $16,800,000 for the fiscal year ending June 30, 1967, $25,300.000 for the fiscal year ending June 30, 1968, $30,900,000 for the fiscal year ending June 30, 1969, and such sums for the fiscal year ending June 30, 1970, and each of the two succeeding fiscal years as may be necessary to enable students who have received a loan for any academic year ending before July 1, 1969, to continue or complete their education.

Sums appropriated pursuant to this section for any fiscal year shall be available, in accordance with agreements under this part, for Federal capital contributions to schools with which such agreements have been made, to be used, together with deposits in such fund pursuant to section 823(b) (2) (B), for establishment and maintenance of student loan funds.

"ALLOTMENTS AND PAYMENTS OF FEDERAL CAPITAL CONTRIBUTIONS

"SEC. 826. (a) Sums appropriated pursuant to section 825 for any fiscal year shall be allotted by the Secretary of Health, Education, and Welfare among the States as follows: (1) He shall allot to each State an amount which bears the same ratio to 50 per centum of such sums as the number of students who graduated from secondary schools in such State during the preceding fiscal year bears to the total number of students who graduated from secondary schools in all of the States during such year; and (2) he shall also allot to each State an amount which bears the same ratio to 50 per centum of such sums as the number of students who will be enrolled full time in public or nonprofit private schools of nursing in such State bears to the total number of students who will be enrolled full time in all such schools of nursing in all of the States. The sum of such two amounts for each State shall be its allotment. For purposes of allotments under this section, a school of nursing also includes any school with which the Secretary has, prior to the time the allotment is made, entered into an agreement for establishment of a student loan fund under this part.

"(b) (1) The Secretary shall from time to time set dates by which schools of nursing with which he has in effect agreements under this part must file applications for Federal capital contributions to their loan funds pursuant to section 823 (b) (2) (A).

"(2) If the total of the amounts requested for any fiscal year in such applications which are made by schools in a State exceeds the amount of the allotment of such State for that fiscal year, the amounts to be paid to the loan fund of each such school shall be reduced to whichever of the following is the smaller: (A) the amount requested in its application or (B) an amount which bears the same ratio to the amount of the allotment of such State as the number of students who will be enrolled full time in such school during such fiscal year bears to the total number of students who will be enrolled full time in all such schools in such State during such year. Amounts remaining after allotment under the preceding sentence shall be redistributed in accordance with clause (B) of such sentence among schools which in their applications requested more than the amounts so paid to their loan funds, but with such adjustments as may be necessary to prevent the total paid to any such school's loan fund from exceeding the total so requested by it. If the total of the amounts requested for any fiscal year in such applications which are made by schools in a State is less than the amount of the allotment of such State for that fiscal year, the Secretary may reallot the remaining amount from time to time, on such date or dates as he may fix, to other States in proportion to the original allotments to such States under subsection (a) for such year. For the purpose of this section, the number of students who graduated from secondary schools in each State during a fiscal year and the number of students who will be enrolled full time in schools of nursing in each State shall be estimated by the Secretary of Health, Education, and Welfare on the basis of the best information available to him; and in making such estimates, the number of students enrolled full time in any collegiate school of nursing shall be deemed to be twice their actual number.

"(c) The Federal capital contributions to a loan fund of a school under this part shall be paid to it from time to time in such installments as the Secretary determines will not result in unnecessary accumulations in the loan fund at such school.

"DISTRIBUTION OF ASSETS FROM LOAN FUNDS

"SEC. 827. (a) After June 30, 1972, and not later than September 30, 1972, there shall be a capital distribution of the balance of the loan fund established under this part by each school as follows:

"(1) The Secretary of Health, Education, and Welfare shall first be paid an amount which bears the same ratio to the balance in such fund at the close of June 30, 1972, as the total amount of the Federal capital contributions to such fund by the Secretary pursuant to section 823 (b) (2) (A) bears to the total amount in such fund derived from such Federal capital contributions and from funds deposited therein pursuant to section 823 (b) (2) (B).