that such employment helps meet a shortage of and need for persons to perform such employment; and "(C) in the case of Federal employment or service in a uniformed service, the head of the employing agency or uniformed service, as the case may be, certifies to the Secretary of Health, Education, and Welfare in such form and at such times as the Secretary may prescribe that such employment or service helps meet a shortage of and need for persons to perform such employment or such military service; then 10 per centum of the total of such loans, plus accrued interest on such amount, which are unpaid as of the date such practice or employment, or such service in a uniformed service begins, shall be canceled thereafter for each year of such practice, employment, or service, or combination thereof, up to a total of 50 per centum of such total, plus accrued interest thereon. "(g) Loans shall be made under this part without security or endorsement, except that if 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. "(h) No note or other evidence of a loan made under this part 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. "(i) Where all or any part of a loan, or interest, is canceled under this section, the Secretary shall pay to the school an amount equal to the school's proportionate share of the canceled portion, as determined by the Secretary. "AUTHORIZATION OF APPROPRIATIONS "SEC. 742. (a) There are hereby authorized to be appropriated to the Secretary of Health, Education, and Welfare to carry out this part $5,100,000 for the fiscal year ending June 30, 1964, $10,200,000 for the fiscal year ending June 30, 1965, $15,400,000 for the fiscal year ending June 30, 1966, $20,600,000 for the fiscal year ending June 30, 1967, $21,000,000 for the fiscal year ending June 30, 1968, and such sums for the fiscal year ending June 30, 1969, 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, 1968, to continue or complete their education. Sums appropriated pursuant to this subsection shall be allotted among loan funds at schools which have established loan funds under this part. "(b) (1) The Secretary shall from time to time set dates by which schools with which he has in effect agreements under this part must file applications for allotments to their loan funds. "(2) If the total of the amounts requested for any fiscal year in such applications exceeds the amounts appropriated under this part for that fiscal year, the allotment 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 amounts appropriated as the number of students estimated by the Secretary to be enrolled in such school during such fiscal year bears to the estimated total number of students in all such schools during such year. Amounts remaining after allotment under the preceding sentence shall be reallotted in accordance with clause (B) of such sentence among schools whose applications requested more than the amounts so allotted to their loan funds, but with such adjustments as may be necessary to prevent the total allotted to any such school's loan fund from exceeding the total so requested by it. "(3) Allotments to a loan fund of a school 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. 743. (a) After June 30, 1971, and not later than September 30, 1971, 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 shall first be paid an amount which bears the same ratio to the balance in such fund at the close of June 30, 1971, as the total amount of the allotments to such fund by the Secretary under this part bears to the total amounts in such fund derived from such allotments and from funds deposited therein pursuant to section 740(b) (2) (B). "(2) The remainder of such balance shall be paid to the school. "(b) After September 30, 1971, each school with which the Secretary has made an agreement under this part shall pay to the Secretary, not less often than quarterly, the same proportionate share of amounts received by the school after June 30, 1971, in payment of principal or interest on loans made from the loan fund established pursuant to such agreement as was determined for the Secretary under subsection (a). "LOANS TO SCHOOLS "SEC. 744. Upon application by any school with which he has made an agreement under this part, the Secretary may make a loan to such school for the purpose of helping to finance deposits required by section 740(b)(2) (B) in a loan fund established pursuant to such agreement. Such loan may be made only if the school shows it is unable to secure such funds upon reasonable terms and conditions from non-Federal sources. Loans made under this section shall bear interest at a rate sufficient to cover (1) the cost of the funds to the Treasury, (2) the cost of administering this section, and (3) probable losses. "ADMINISTRATIVE PROVISIONS "SEC. 745. The Secretary may agree to modifications of agreements or loans made under this part, and may compromise, waive, or release any right, title, claim, or demand of the United States arising or acquired under this part." out "June 30, 1962” and inserting in lieu thereof "June 30, 1965." SEC. 3 (a) Section 705 (c) of the Public Health Service is amended by striking out "and" at the end of paragraph (2), by striking out the period at the end of pargraph (3) and inserting in lieu thereof "; and", and by adding after paragraph (3) the following new paragraph: "(4) the application contains or is supported by adequate assurance that any laborer or mechanic employed by any contractor or subcontractor in the performance of work on the construction of the facility (A) will be paid wages at rates not less than those prevailing on similar construction in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, as amended (40 U.S.C. 276a-276a5), and (B) will receive compensation at a rate not less than one and one-half times his basic rate of pay for all hours worked in any workweek in excess of eight hours in any workday or forty hours in the workweek. The Secretary of Labor shall have, with respect to the labor standards specified in this paragraph, the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (15 F.R. 3176; 64 Stat. 1267), and section 2 of the Act of June 13, 1934, as amended (40 U.S.C. 276c)." (b) Part A of title VII of such Act is further amended by inserting after section 710 the following new sections: "TECHNICAL ASSISTANCE "SEC. 711. The Surgeon General is authorized to provide assistance to applicants under this part, and other public or nonprofit institutions engaging or competent to engage in research, or research and related purposes, in the sciences related to health, in designing and planning the construction of facilities for the conduct of such research or research and related purposes. "CONSTRUCTION OF REGIONAL FACILITIES "SEC. 712. When the Surgeon General finds, in accordance with regulations, that the purposes of this part can best be achieved through the construction of research, or research and related purposes, facilities of particular value or significance for the Nation or a region thereof, and that because of the cost of such facilities or their use as a national or regional resource for research or related purposes a grant pursuant to the preceding provisions of this part does not provide an effective or appropriate means of financing the construction of such facilities, he may construct or make arrangements for constructing, through contracts for paying (including advance or installment payments) part or all of the cost of construction or otherwise, facilities for the conduct of research, or for research and related purposes, in the sciences related to health. The Surgeon General may, where he deems such action appropriate, make arrangements, by contract or otherwise, for the operation of such facilities (for the conduct of such research, or research and related purposes) or may make con tributions toward the cost of such operation of facilities of this nature whether or not constructed pursuant to, or with aid provided under, this section. Title to any facility constructed under this section may be transferred by the Surgeon General on behalf of the United States to any public or nonprofit private institution competent to engage in the type of research, or research and related purposes, for which the facility was constructed. Such transfer shall be made subject to the condition that the facility will be operated for the research, or research and related purposes, for which it was constructed and to such other conditions as the Surgeon General deems necessary to carry out the objectives of this part and to protect the interests of the United States." Hon. OREN HARRIS, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, Chairman, Committee on Interstate and Foreign Commerce, DEAR MR. CHAIRMAN: This is in response to your letter of January 30, 1963, requesting a report on H.R. 12, a bill to increase the opportunities for training of physicians, dentists, and professional public health personnel, and for other purposes. For the reasons set forth in the statement I made at your committee's February 5, 1963, hearing, we strongly urge prompt and favorable action by your committee on this bill, The Bureau of the Budget has advised that enactment of legislation along the lines of H.R. 12 would be in accord with the program of the President. Enclosed are 5-year estimates of appropriation, expenditure, and personnel requirements under the bill. Sincerely, ANTHONY J. CELEBREZZE, Secretary. The Health Professions Educational Assistance Act of 1963-Estimate of additional cost, 1964-68 Chairman, Committee on Interstate and Foreign Commerce, DEAR MR. CHAIRMAN: This is in response to your request for the views of the Bureau of the Budget regarding H.R. 12, a bill to increase the opportunities for training physicians, dentists, and professional public health personnel, and for other purposes. The bill provides a 10-year program of grants for the construction of teaching facilities for medical, dental, and other health personnel, a loan program to provide financial assistance to enable a larger number of students of medicine, osteopathy, and dentistry to meet the high cost of such education, and the extension of the health research facilities construction grant program. I am authorized to advise you that enactment of legislation along the lines of H.R. 12 would be in accord with the program of the President. Sincerely yours, PHILLIP S. HUGHES, Assistant Director for Legislative Reference. Hon. OREN HARRIS, COMPTROLLER GENERAL OF THE UNITED STATES, Chairman, Committee on Interstate and Foreign Commerce, DEAR MR. CHAIRMAN: Your letter of January 30, 1963, with enclosure, request our comments on H.R. 12, 88th Congress, and offers us the opportunity of testifying in the hearings before your committee to be held thereon. This bill would provide grants-in-aid for construction of medical, dental, pharmaceutical, optometric, podiatric, nursing, osteopathic, and public health teaching facilities, as well as scholarship loans to schools of medicine, osteopathy, or dentistry for use by such schools to make loans to the students thereof. The bill is substantially similar to H.R. 4999, 87th Congress, which was reported by your committee, House Report 1489, 87th Congress, 2d session. On pages 22 and 23 of House Report 1489, there is set forth our report to you of January 26, 1962, B-143181, on H.R. 4999, as it was introduced. While the bill as reported did not adopt our recommendation to include therein an access to records and audit clause, the comments relative thereto contained in our report, which are also hereinafter set forth, reflect our views on H.R. 12. The bill would provide additional grant programs to be administered by the Public Health Service. No provision is made in the bill nor in legislation applicable to other grant programs now authorized by the Public Health Service Act, as amended, to require a grantee to keep adequate cost records of the projects or undertakings to which the Federal Government makes financial contributions, or to authorize the Surgeon General or the Comptroller General to have access to the grantee's records for purposes of audit and examination. In view of the increase in grant programs over the last several years, we believe that in order to determine whether grant funds have been expended for the purpose for which the grant was made, the grantee should be required by law to keep records which would fully disclose the disposition of such funds. We also believe that the agency as well as the General Accounting Office should be permitted to have access to the grantee's records for the purpose of audit and examination. We therefore suggest that consideration be given to amending the bill to include such requirements with respect to the proposed new programs, or preferably by an amendment of the Public Health Service Act to cover all grant programs therein authorized. The latter could be accomplished by the following language: "RECORDS AND AUDIT "(a) Each recipient of assistance under this Act shall keep such records as the Surgeon General shall prescribe, including records which fully disclose the amount and disposition by recipient of the proceeds of such grants, the total cost of the project or undertaking in connection with which such funds are given or used, and the amount of that portion of the cost of the project or undertaking supplied by other sources, and such other records as will facilitate an effective audit. "(b) The Secretary of Health, Education, and Welfare and the Comptroller General of the United States or any of their duly authorized representatives shall have access for the purpose of audit and examination to any books, documents, papers, and records of the recipients that are pertinent to the grants received under this Act.” While we appreciate the committee's permission to testify on H.R. 12, we believe that the foregoing comments adequately present our views on the proposed legislation, and for this reason we do not contemplate presenting testimony. If the committee should have any questions relating to our recommendation, we shall be glad to respond to them. We have no other comments or recommendations with respect to the bill. JOSEPH CAMPBELL, The CHAIRMAN. Our first witness this morning will be the Secretary of Health, Education, and Welfare, the Honorable Anthony J. Celebrezze. We are privileged to have you with us today, Mr. Secretary. I believe this is your first appearance before this committee since you assumed the highly important, arduous duties of the great Department over which you preside. We will, of course, have the benefit of your views and suggestions, not only today, but on other subject matters within your Department in the days to come. We are pleased to have you with us and shall be glad to have your statement. STATEMENT OF HON. ANTHONY J. CELEBREZZE, SECRETARY OF THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE; ACCOMPANIED BY DR. LUTHER L. TERRY, SURGEON GENERAL; AND BOISFEUILLET JONES, SPECIAL ASSISTANT TO THE SECRETARY (HEALTH AND MEDICAL AFFAIRS) Secretary CELEBREZZE. Mr. Chairman and distinguished members of the committee, I have with me today, also, Mr. Jones, who is the Special Assistant to the Secretary on Health and Medical Affairs, and the Surgeon General, Dr. Terry. I am pleased to appear before this committee in support of legislation designed to meet the Nation's critical need for more professional health personnel. The scheduling of this early hearing on legislation developed and advanced by your committee last year is very heartening to us, Mr. Chairman. It clearly suggests that you and we are in agreement on the urgent need for enactment of such legislation at the earliest possible date. In stressing the urgency of this need, I do not mean to imply that training for the health professions is more important than medical research, mental health, the construction of health facilities, or certain other health problems covered by current legislative proposals. Rather, the legislation under consideration today derives its importance and its urgency from the needs of all of these other fields. While each has its own special requirements, they all share one common problem-the need for more professional manpower. Hospitals, public health agencies, the armed services, research laboratories, and communities in search of private practitioners are all competing against each other for an increasingly short supply of professional personnel. A substantial increase in the annual output of the schools that train professional health manpower is therefore an essential prerequisite to future advances in all fields of health. In our opinion, your committee's consideration of this legislation last year provides an excellent starting point for legislative action in the present Congress. We submitted to the last Congress a carefully prepared proposal directed toward the most critical national needs in this field. This proposal, together with a number of alternative |