Plan Numbered 14 of 1950 (15 F.R. 3176; 5 U.S.C. 133z-15) and section 2 of the Act of June 13, 1934, as amended (40 U.S.C. 276c); and

(6) a certification by the State agency of the Federal share for the project. The Secretary shall approve such application if sufficient funds to pay the Federal share of the cost of construction of such project are available from the allotment to the State, and if the Secretary 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 202; (C) that the application is in conformity with the State plan approved under section 204 and contains an assurance that in the operation of the facility there will be compliance with the applicable requirements of the State plan and of the regulations prescribed under section 203 (d) for furnishing needed facilities for persons unable to pay therefor, and with State standards for operation and maintenance; and (D) that the application has been approved and 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 203 (b). No application shall be disapproved by the Secretary until he has afforded the State agency an opportunity for a hearing. (b) Amendment of any approved application shall be subject to approval in the same manner as an original application.

PAYMENTS FOR CONSTRUCTION

SEC. 206. (a) Upon certification to the Secretary 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, such installment shall be paid to the State, from the applicable allotment of such State, except that (1) if the State is not authorized by law to make payments to the applicant, the payment shall be made directly to the applicant, (2) if the Secretary, after investigation or otherwise, has reason to believe that any act (or failure to act) has occurred requiring action pursuant to section 207, payment may, after he has given the State agency notice of opportunity for hearing pursuant to such section, be withheld, in whole or in part, pending corrective action or action based on such hearing, and (3) the total of payments under this subsection with respect to such project may not exceed an amount equal to the Federal share of the cost of construction of such project.

(b) In case an amendment to an approved application is approved as provided in section 205 or the estimated cost of a project is revised upward, any additional payment with respect thereto may be made from the applicable allotment of the State for the fiscal year in which such amendment or revision is approved.

WITHHOLDING OF PAYMENTS

SEC. 207. Whenever the Secretary, after reasonable notice and opportunity for hearing to the State agency designated as provided in section 204(a) (1), finds— (1) that the State agency is not complying substantially with the provisions required by section 204 to be included in its State plan or with regulations under this title; or

(2) that any assurance required to be given in an application filed under section 205 is not being or cannot be carried out; or

(3) that there is a substantial failure to carry out plans and specifications approved by the Secretary under section 205; or

(4) that adequate State funds are not being provided annually for the direct administration of the State plan,

the Secretary may forthwith notify the State agency that

(5) no further payments will be made to the State under this title, or (6) no further payments will be made under this title for any project or projects designated by the Secretary as being affected by the action or inaction referred to in paragraph (1), (2), (3), or (4) of this section,

as the Secretary 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, further payments may be withheld, in whole or in part, until there is no longer any failure to comply (or to carry out the assurance or plans and specifications or to provide adequate State funds, as the case may be) or, if such compliance for other action) is impossible,

until the State repays or arranges for the repayment of Federal moneys to which the recipient was not entitled,

JUDICIAL REVIEW

SEC. 208. (a) If the Secretary refuses to approve any application for a project submitted under section 205, the State agency through which such application was submitted, or if any State is dissatisfied with his action under section 204 (b) or section 207, such State, may appeal to the United States court of appeals for the circuit in which such State is located, by filing a petition with such court within sixty days after such action. A copy of the petition shall be forthwith transmitted by the clerk of the court to the Secretary, or any officer designated by him for that purpose. The Secretary thereupon shall file in the court the record of the proceedings on which he based his action, as provided in section 2112 of title 28, United States Code. Upon the filing of such petition, the court shall have jurisidiction to affirm the action of the Secretary or to set it aside, in whole or in part, temporarily or permanently, but until the filing of the record, the Secretary may modify or set aside his order. The findings of the Secretary as to the facts, if supported by substantial evidence, shall be conclusive, but the court, for good cause shown, may remand the case to the Secretary to take further evidence, and the Secretary may thereupon make new or modified findings of fact and may modify his previous action, and shall file in the court the record of the further proceedings. Such new or modified findings of fact shall likewise be conclusive if supported by substantial evidence. The judgment of the court affirming or setting aside, in whole or in part, any action of the Secretary shall be final, subject to review by the Supreme Court of the United States upon certiorari or certification as provided in section 1254 of title 28, United States Code. The commencement of proceedings under this subsection shall not, unless so specifically ordered by the court, operate as a stay of the Secretary's action.

RECOVERY

SEC. 209. If any facility with respect to which funds have been paid under section 206 shall, at any time within twenty years after the completion of construction

(1) be sold or transferred to any person, agency, or organization (A) which is not qualified to file an application under section 205, or (B) which is not approved as a transferee by the State agency designated pursuant to section 204, or its successor, or

(2) cease to be a public or other nonprofit facility for the mentally retarded, unless the Secretary determines, in accordance with regulations, that there is good cause for releasing the applicant or other owner from the obligation to continue as such a facility,

the United States shall be entitled to recover from either the transferor or the transferee (or, in the case of a facility which has ceased to be a public or other nonprofit facility for the mentally retarded, from the owners thereof) an amount bearing the same ratio to the then value (as determined by the agreement of the parties or by action brought in the district court of the United States for the district in which the facility is situated) of so much of the facility as constituted an approved project or projects, as the amount in the Federal participation bore to the cost of the construction of such project or projects. Such right of recovery shall not constitute a lien upon said facility prior to judgment.

STATE CONTROL OF OPERATIONS

SEC. 210. Except as otherwise specifically provided, nothing in this title shall be construed as conferring on any Federal office or employee the right to exercise any supervision or control over the administration, personnel, maintenance, or operation of any facility with respect to which any funds have been or may be expended under this title.

DEFINITIONS

SEC. 211. For purposes of this title

(a) The term "State" includes the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, and the District of Columbia;

(b) The term "facility for the mentally retarded" means a facility specially designed for the diagnosis, treatment, education, training, or custodial care of the mentally retarded, including sheltered workshops for such individuals and facilities for training specialists;

(c) The term "nonprofit facility for the mentally retarded" means a facility for the mentally retarded which is owned and operated by one or more nonprofit 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:

(d) The term "construction" includes construction of new buildings, expansion, remodeling, and alteration of existing buildings, and initial equipment of any such buildings (including medical transportation facilities); including architects' fees, but excluding the cost of off-site improvements and the cost of the acquisition of land;

(e) The term "cost of construction" means the amount found by the Secretary to be necessary for the construction of a project;

(f) The term "title," when used with reference to a site for a project, means a fee simple, or such other estate or interest (including a leasehold on which the rental does not exceed 4 per centum of the value of the land) as the Secretary finds sufficient to assure for a period of not less than fifty years undisturbed use and possession for the purposes of construction and operation of the project; (g) The term "Federal share" with respect to any project means-

(1) if the State plan, as of the date of approval of the project application, contains standards approved by the Secretary pursuant to section 204 (c), the amount determined by the State agency in accordance with such standards; or

(2) if the State plan does not contain such standards, the amount (not less than 45 per centum and not more than either 75 per centum or the State's Federal percentage, whichever is the lower) established by the State agency for all projects in the State: Provided, That prior to the approval of the first project in the State during any fiscal year the State agency shall give to the Secretary written notification of the Federal share established under this subparagraph for projects in such State to be approved by the Secretary during such fiscal year, and the Federal share for projects in such State approved during such fiscal year shall not be changed after such approval;

(h) The Federal percentage for any State shall be 100 per centum less that percentage which bears the same ratio to 40 per centum as the per capita income of such State bears to the per capita income of the United States, except that the Federal percentage for Puerto Rico, Guam, American Samoa, and the Virgin Islands shall be 75 per centum ;

(i) (1) The Federal percentages shall be promulgated by the Secretary 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 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; except that the Secretary 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, 1965;

(2) The term "United States" means (but only for purposes of this subsection and subsection (h)) the fifty States and the District of Columbia;

(j) The term "Secretary" means the Secretary of Health, Education, and Welfare.

CONFORMING AMENDMENT

SEC. 212. (a) The first sentence of section 633 (b) of the Public Health Service Act is amended by striking out "eight" and inserting in lieu thereof "twelve." The second sentence thereof is amended to read: "Eight of the twelve appointed members shall be persons who are outstanding in fields pertaining to medical facility and health activities, three of whom shall be authorities in matters relating to the operation of hospitals or other medical facilities and one of whom shall be an authority in matters relating to the mentally retarded, and the other four members shall be appointed to represent the consumers of services provided by such facilities and shall be persons familiar with the need for such services in urban or rural areas."

(b) The terms of office of the additional members of the Federal Hospital Council authorized by the amendment made by subsection (a) who first take office after enactment of this Act shall expire, as designated by the Secretary of Health, Education, and Welfare at the time of appointment, one at the end of the first year, one at the end of the second year, one at the end of the third year, and one at the end of the fourth year after the date of appointment.

[H.R. 2567, 88th Cong., 1st sess.]

A BILL To amend the Public Health Service Act in order to provide a broadened program in the field of mental health and illness of grants for prevention, research, training, salaries, facilities survey, and construction of facilities for treatment of the mentally ill and mentally retarded

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Mental Health Act of 1962".

SEC. 2. The Public Health Service Act is amended by adding at the end thereof the following new title:

"TITLE VIII-PROGRAM IN THE FIELD OF MENTAL HEALTH AND ILLNESS

"STATEMENT OF PURPOSE

"SEC. 801. The purpose of this title is to encourage the several States to bring about changes in their laws concerning mental health and to assist them in bringing about administrative changes that will—

"(1) make professional treatment as well as custody the acceptable standard of hospitalization;

"(2) provide for differentiation between the need for treatment and the need for institutionalization;

"(3) provide in suitable instances for treatment without hospitalization; "(4) make proper provision for voluntary admission to mental hospitals and facilities and relegate court commitment to special instances of demonstrable need;

"(5) ease stringency of admissions and discharge from institutions and facilities;

"(6) facilitate, without interference to any existing reciprocal agreements, acceptance of patients whether legal residents of the State or not;

"(7) clarify and update the responsibility of relatives for patients in mental institutions and facilities;

"(8) distinguish between the administrative responsibility of the State for the welfare and safekeeping of patients from the professional responsibility for their medical care;

"(9) provide treatment for all types of patients in all mental health institutions with the understanding that psychiatric wards of general hospitals may limit duration and type of treatment according to their capabilities; "(10) establish State mental health agencies with well defined authority to:

“(a) assume overall responsibility for services to the mentally ill and mentally retarded;

"(b) coordinate State and local community mental health services, with provision for central administrative reporting and file systems; "(c) give recognition to the responsibility of the family of the patient; "(d) provide for cooperation with private institutions and facilities; and

"(e) provide screening and referral services to schools and other institutions of learning.

"(11) operate mental hospitals as part of an integrated community service by affording outpatient care and treatment as well as inpatient services to include professional consultation to schools, law courts, and domiciliary treatment centers for the aged;

"(12) establish, in suitable State hospitals, programs of training mental health workers and for research into the problems of mental health, mental illness, and mental retardation;

"(13) review laws, programs, and proposals to retain, insofar as possible, the individual rights of patients in mental hospitals and other mental facilities;

"(14) require inventory of their existing facilities for the treatment of mental health, mental illnees, and mental retardation, including rehabilitation:

"(15) formulate a plan for construction of facilities which—

"(a) will be responsive to modern methods of treatment;

"(b) will take account of shifts in population, urbanization, location of learning centers, the availability of workers; and

"(c) will take due account of the organization of county and community facilities for the treatment of the mentally ill.

"DEFINITIONS

"SEC. 802. For the purposes of this title

"(1) The term 'State' includes the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, and the Virgin Islands.

"(2) The term 'nonprofit', when used with reference to any agency, organization, or institution, means an agency, organization, or institution no part of the net earnings of which inure, or may lawfully inure, to the benefit of any private shareholder or individual.

"(3) The term 'Council' means the National Advisory Mental Health Council.

"(4) The term 'Secretary' means the Secretary of Health, Education, and Welfare.

"(5) The term 'construction' includes construction of new buildings, expansion, remodeling, and alteration of existing buildings, and initial equipment of any such buildings, including architects' fees, but excluding the cost of off-site improvements and the acquisition of land.

"(6) The term 'facility' means any building, office, or clinic established by a town, city, county, or other level of government for the prevention or treatment of mental illness and retardation that shall have been approved by the State.

"(7) The term 'Federal share' when used with respect to any construction project means the proportion of the cost of construction of such project paid with a grant under part B of this title which may not exceed 66% per centum of the cost thereof nor be less than 33% per centum of the cost thereof.

"(8) The term 'title' when used with reference to a site for a project, means a fee simple, or such other estate or interest (including a leasehold on which the rental does not exceed 4 per centum of the value of the land) as the Surgeon General finds sufficient to assure for a period of not less than fifty years undisturbed use and possession for the purposes of construction and use of the project.

"(9) The population of each State and of all the States shall be determined by the Secretary on the basis of the latest figures certified by the Secretary of Commerce.

"TRANSFER OF ALLOTMENTS

"SEC. 803. A State agency for any State may submit to the Surgeon General a request, in writing, that a specified amount of any allotment to such State under this title which, but for this section, would be paid to such State to carry out a State plan administered or supervised by such State agency, be added to the corresponding allotment of any other State for the purpose of making a grant to any public or nonprofit agency, organization, or institution which is (1) otherwise eligible for a grant from such an allotment of such other State, (2) specified in such request, and (3) located in such other State. The Surgeon General shall add such amount to the allotment of such other State and shall make a grant of such amount to such agency, organization, or institution, as the case may be, if he determines that the making of such grant is consistent with the purpose of this title and will be used in such a manner as to be of direct benefit to the State filing such request. In order to carry out the provisions of this section, the Surgeon General may by regulation modify or make inapplicable any provisions of this title.

"PART A-GRANTS FOR RESEARCH, TRAINING, AND SALARIES

"AUTHORIZATION OF APPROPRIATIONS

"SEC. 811. For the fiscal year beginning July 1, 1963, and for each succeeding fiscal year, there is hereby authorized to be appropriated—

"(1) $100,000,000 to enable the Surgeon General to make grants as provided in this part for investigations, experiments, demonstrations, studies, and research projects for the development of improved methods of preventing and diagnosing mental illness and mental retardation, and relating to