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"APPROVAL OF PROJECTS AND PAYMENTS-FEDERAL BHABE a) Applications under this part by States, political subdivisions ofit agencies for (1) nonprofit diagnostic or treatment centers, (3) itals for the chronically ill and impaired, (3) nonprofit rehabilitaor (4) nonprofit nursing homes shall be submitted, and shall be he Surgeon General (subject also, in the case of rehabilitation e approval of the Secretary) if sufficient funds are available from 'ment under this part for such type of facility, in accordance with and subject to the conditions prescribed in subsection (a) of see > regulations issued under section (22 as revised and supplemented s of this part: Prorided, however, That (except with respect to

2-surances required for compliance with State standards for op Antenance shall be limited to such standards, if any, as the State

Approved applications shall be subject to amendment as pro100 (c) of section 625. ros and conditions for payments under this part shall be in Trovisions of subsection (b) of section 625."

AMENDMENT OF PARTS CAND D OF TITLE VI

bsection (e) of section 625 of the Public Health Service Act is to read; spital, dia mnostic or treatment center, rehabilitation facility, for which funds have been paid under this section or under at any time within twenty years after the completion of con► gold or transferred to any person, agency, or organization, qualified to file an application under this section, or (2) which it a transferee by the State agency designated pursuant to 1), or its successor, or (B) cease to be a nonprofit hospital, f?cor treatment center, nonprofit rehabilitation facility, or Lomp as defined in section 631 (g), the United States shall be

from either the transferor or the transferee (or, in the case mostic or treatment center, rehabilitation facility, or nursing (ted to be nonprofit, from the owners thereof) an amount patio to the then ralue las determined br agreement of the in loronght in the district court of the l'nited States for the :13 h hospital, venter, facility, or nursing home is situated) of

pial, center, facility, or pursing home as constituted an r projects, as the amount of the Federal participation bore

(e) Subsection (k) of section 631 is amended to read:

"(k) (1) the term 'Federal share with respect to any project means the proportion of the cost of construction of such project to be paid by the Federal Government. In the case of any project approved prior to October 25, 1949, the Federal share shall be 3343 per centum of the cost of construction of such project. In the case of any project approved on or after October 25, 1949, the Federal share, except as otherwise provided in paragraph (2) of this subsection, shall be determined as follows:

“(A) if the State plan, as of the date of approval of the project application, contains standards approved by the Surgeon General pursuant to section 623 (e), the Federal share with respect to such project shall be determined by the State agency in accordance with such standards;

*(B) if the State plan does not contain such standards, the Federal share shall be the amount (not less than 3313 per centum and not more than either 66% per centum or the State's allotment percentage, whicho ever 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 Surgeon General written notification of the Federal share established under this paragraph for projects in such State to be approved by the Surgeon General 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. "(2) in the case of any project eligible for approval under part F and approved after the effective date of that part, the 'Federal share shall not be less than 50 per centum of the cost of construction and not more than either 66% per centum or the State's allotment percentage of such cost, whichever is the lower, as the State agency may prescribe for any fiscal year for all projects under part F, and, if a hospital as defined in section 631 (e), may be paid, notwithstanding any other provision of this title, from the State's allotment under part C, or from the appropriate allotment of the State under part F, or from both allotments in such proportions as the State agency

may designate.(f) Section 631 of the Public Health Service Act is further amended by the addition of the following subsections :

"(1) the term 'diagnostic or treatment centers' means a nonprofit facility for the diagnosis of treatment, or both, of ambulatory patients, in which patient care is under the professional supervision of persons licensed to practice medicine in the State, and includes ont-patient clinics;

"(m) the term 'hospital for the chronically ill and impaired' shall not include any hospital primarily for the care and treatment of mentally ill or tuberculosis patients;

"(n) the term 'rehabilitation facility' means a facility operated for the primary purposes of assisting in the rehabilitation of disabled persons through an integrated program of medical, psychological, social, and vocational eraluation and services under competent professional supervision: Provided, That the major portion of such evaluation and services are fur. nished within the facility and that all medical and related health services are prescribed by, or are under the formal supervision of, person licensed to practice medicine in the State; and

"(0) the term 'nursing home' means a facility for the accommodation of convalescents or other persons who are not acutely ill and not in need of hospital care but who require skilled nursing care, and related medical services: Provided, That such services are prescribed by, or the care of the patient is under the formal supervision of, persons licensed to practice medicine in the State." (8) Subsection (a) and subsection (b), paragraph (1), of section 632 are berehy amended to read:

"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) or section 6+2 (1) finds that the State agency is not complying substantially with the provisions required by section 612 (a) or section 612 to be contained in its application for funds under part B or part E, as the case may be, or after reasonable notice and opportunity for hearing to the State agency designated in accordance with section 623 (a) (1) or section 642 (1) finds (1) that the State agency is not coniplying substantially with the provisions required

ri-frut on of such project or projets."
ei of sprtion (1 is ane ded to read:
7 20epta!' (errept as used in section 622 (a) and (b))

Teh anters and general, tuberculosis, mental, chronic hor tips of hospitals in which patient care is under the proTrop of persons liensed to practice medicine in the State

, ilities, such as laboratories, nurses' home and training fa

solice facilities opwrated in connection with hospitals, outrones, and medical rehabilitation and contalescent facilties

care is under the professional supervision of persons rip medi ine in the State, but does not include any hospital

a na primarila domiciliars care:". 1.8 mition 631 is amended to read:

purpoint hospital', 'nonprofit diagnostic or treatment
polarisation facility'

, and 'nonprofit nursing home' mean
in or treatment center, rehabilitation facility, and
of property mar be, which is owned and operated by one or
mambo" or goiations no part of the net earnings of
por lawfully inure, to the benefit of any private share

Paper jon 631 is amended to read:
jiv parution' includes construction of new building,
'n and alteration of Pristing buildings, and initial equip

kibins (including medical transportation faciltijes);
A holt errluding the cost of n1-site improrements

-- to public health centers, the cost of the acquisition

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by section 623 (a), or hy regulations prescribed pursuant to section 622, or with the provisions required by section 642, or by regulations prescribed pursuant to section 653, to be contained n its plan submitted under section 623 (a) or section 653, as the case may be, or (2) that any funds have been diverted froin the purposes for which they have been allotted or paid, or (3) that any assurance given in an application filed under section 625 or section 654, as the case may be, 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 or section 654, as the case may be, or (5) that adequate State funds are not being provided annually for the direct administration of the State plan, 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, part C, part E, or part F, 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 fai ure 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 expanded.

**(h) (1) If the Surgeon General refuses to approve any application under section 625 or section 651, the State agency through which the application was submitted, or if any State is dissatisfied with the Surgeon General's action untler 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."

(h) Section 63.5 is hereby amended to read :

“Sec. 635. Except as otherwise specifi ally nrovided, nothing in this title shall be construed as conferring on any Federal offi er or employee the right to exer. cise any supervision or control over the administration, personnel, maintenance, or operation of any hospital, diagnostic or treatment center, rehabilitation facil. ity, or nursing home with respect to which any funds have been or may be ex. pended under this title."

Sec. 5. As used in the provisions of the Public Health Service Act amended by this Act, the term “Secretary", except where the context otherwise requires, means the Secretary of Health, Education, and Welfare.

(H. R. 8149, 83d Cong., 2d sess.) AN ACT To amend the hospital survey and construction provisions of the Public Health Service Act to provide assistance to the States for survering the need for diagnostic or treatment centers, for hospitals for the chronically ill and impaired, or rehabilitation facilities, and for nursing homes, and to provide assistance in the construction of such facilities through grants to public and nonprofit agencies, and for other purposes

Be it enacted by the Senate and House of Representatires of the United States of America in Congress assembled, That this Act may be cited as the “Medical Facilities Surrey and Construction Act of 1954".

SEC. 2. Title VI of the Public Health Service Art is amended by adding immediately after part D thereof the following new parts: "PART E-DECLARATION OF PURPOSE WITi RESPECT TO DIAG YOSTIC 07 TREATMENT

CENTERS, CHRONIC DISEASE HOSPITALS, REHABILITATION FACILITIES, AND NURS

ING HOMES "SEC. 641. The purpose of parts F and G of this title is

*(a) to assist the several States (1) to inventory their existing diagnostie or treatment centers, hospitals for the chronically ill and impaired, rehabilitation facilities, and nursing homes, (2) to survey the need for the construction of facilities of the types referred to in clause (1), and (3) to develop programs for the construction of such public and other nonprofit facilities of the types referred to in clause (1) as will, in conjunction with existing facilities, afford the necessary physical facilities for furnishing to all their people adequate services of the kinds which may be supplied by facilities of the types referred to in clause (1); and

"b) to assist in the construction, in accordance with such programs, of polic and other nonprofit facilities of the types referred to in subsection (a).

XP-SURVEYS AND PLANNING WITH RESPECT TO DIAGNOSTIC OR TREATMENT 2:18. CHRONIC DISEASE HOSPITALS, REHABILITATION FACILITIES, AND NURS3 Homes

"AUTHORIZATION OF APPROPRIATION

2. 646. In order to assist the States in carrying out the purposes of section

dibere is hereby authorized to be appropriated the sum of $2,000,000, to fecielt available until expended. The sums appropriated under this section

!! I used for making payments to States which have submitted, and had a moted by the Surgeon General, State applications for funds for carrying wes such purposes.

"STATE APPLICATIONS * 647. The Surgeon General shall approve a State application for funds karrying out the purposes of section 641 (a) which

"11) designates as the sole agency for carrying out such purposes, or fos supervising the carrying out of such purposes, the State agency desigBated in accordance with section 623 (a) (1);

"(2) provides for the utilization of the State advisory council provided in section 623 (a) (3), and if such council does not include representatives of uongoverument organizations or groups, or State agencies, concerned with Teliabilitation, provides for consultation with organizations, groups, and State agencies so concerned; and

“3) provides for making an inventory and survey containing all infortuation required by the Surgeon General and for developing a construction ftugram in accordance with section 653.

"ALLOTMENTS TO STATES

"VE. 648. Fach State shall be entitled to an allotment of such proportion of any appropriation made pursuant to section 646 as its population bears to pulation of all the states, and within such allotment shall be entitled to gimeise per centum of its expenditures in carrying out the purposes of etion 611 (a) in accordance with its application : Provided, That no such atment to any State shall be less than $25,000. The Surgeon General shall from time to time estimate the sum to which each State will be entitled under ttis sertivn, during such ensuing period as he may determine, and shall thereseu certify to the Secretary of the Treasury the amount so estimated, reduced os in teased, as the case may be, by any sum by which the Surgeon General bers that his estimate for any prior period was greater or less than the amount by which ihe State was entitled for such period. The Secretary of the Treasury a berenpon, prior to audit or settlement by the General Accounting Office,

to the State, at the time or times fixed by the Surgeon General, the amount wifed.

do Auy funds paid to a State under this section and not expended for the forumes for which paid shall be repaid to the Treasury of the United States.” Nr 2. Title VI of the Public Health Service Act is further aniended by adding I be part G to read as follows: *P487 (-CONSTRUCTION OF DIAGNOSTIC OR TREATMENT CENTERS, CHRONIC DISEASE

HOSPITALS, REHABILITATION FACILITIES, AND NURSING HOMES

"AUTHORIZATION OF APPROPRIATION Gl. In order to assist the States in carrying out the purposes of section il b), there is hereby authorized to be appropriated for the fiscal year ending 10:30,1976, and for each of the two succeeding fiscal years,

"111 $20,000,000 for grants for the construction of public and other nonpmdi diagnostic or treatment centers;

"1%) $20,000,000 for grants for the construction of public and other nonproto hospitals for the chronically ill and impaired ;

"13) $10,000,000 for grants for the construction of public and other nonprofit rehabllitation facilities; and

"14) $10,000,000 for grants for the construction of public and other nonfront oursing homes.

"ALLOTMENTS TO STATES

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"SEC. 652. Each State shall be entitled for each fiscal year to an allotment of a sum bearing the same ratio to the sums appropriated for such year pursuant to paragraphs (1), (2), (3), and (4), respectively, of section 651, as the product of (a) the population of such State and (b) the square of its allotment percentage (as defined in section 631 (a)) bears to the sum of the corresponding products for all of the States: Provided, That no such allotment to any State for the purposes of paragraph (1) or (2) of section 651 shall be less than $100,000 and no such allotment for the purpose of paragraph (3) or (4) shall be less than $50,000. Sums allotted to a State for a fiscal year and remaining unobligated at the end of such year shall remain available to such State for the same purpose for the next fiscal year (and for such year only) in addition to the sums allotted to such State for such next fiscal year.

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"REGULATIONS AND APPROVAL OF STATE PLANS

"Sec. 653. (a) Within six months after this part becomes effective, the Surgeon General, with the approval of the Federal Hospital Council and the Secretary of Health, Education, and Welfare (hereinafter referred to as the 'Secretary'), shall revise and supplement the regulations issued under section 622 to proride general standards of construction and equipment, general standards of adequacy and priority, and requirements comparable to those provided in such regulations as to nondiscrimination and persons unable to pay, and as to general methods of administration of the State plan, for facilities for which payments are authorized under this part. After such regulations have been issued, any State desiring to take advantage of this part may submit, as a revision of, or supplement to, its plan under section 623, a plan for a construction program for diagnostic or treatment centers, hospitals for the chronically ill and impaired, rehabilitation facilities, and nursing homes. The Surgeon General shall approve any such rerision of, or supplement to the State plan which is based won a statewide inventory of existing facilities arailable for such purposes and which

“(1) meets the requirements of paragraphs (1), (2), (3), (6), (8), and (9) of section 623 (a): Provided. That if the designated advisory council does not include representatives of nongovernmental organizations or groups, or State ngencies, concerned with rehabilitation, the plan shall proride for consultation with organizations, groups, and state agencies so concerned:

*(2) conforms with the regwations rregeriled under section 622 as revised and supplemented for the purposes of this part;

“(3) sets forth, with respect to each type of facility, the relative need determined in accordance with such revised regulations, and provides for the construction, insofar as financial resources arailable therefor and for maintenance anıl operation make possible, of such facilities in the order of such relative needs; and

"(4) provides that the State agency will from time to time review its construction program for such farilities as a part of its State plan and submit to the Surgeon General any modifications thereof which it considers

necessary. *(b) The provisions of subsections (b) and (c) of sertion (23 shall be applicable to state plans with respect to projerts for construction under this part. L'xcept with respect to hospitals, the provisions of subsection (d) of such sertion shall not be applicable to State plans with respect to projects for construction under this part.

*APPROVAL OF PROJECTS AND PATMENTS-FEDERAL SHARE "Sec. 674. (a) Applications under this part by States, political subdivisions, or public or other nonprofit agencies for (1) puhlir or other nonprofit diagnostic or treatment centers, (2) public or other nonprofit hospitals for the chronically ili and impaired, (3) public or other nonprofit rehabilitation facilities, or (4) public or other nonprofit nursing homes shall be submitted, and shall be approved by the Surgeon General (subject also, in the case of rehabilitation facilities, to the approval of the Secretary) if sufficient funds are available from the State's allotment under this part for such type of facility, in accorilance with the procedures and suhjert to the conditions prescribed in subsection (a) of section 625 and the regulations issued under section 022 as revised and supplemented for the purposes of this part: Prorided, howerer, That (except with respect to hospitals) the assurances required for compliance with State standards for

"ALLOTMENTS TO STATES C. 672. Each State shall be entitled for each fiscal year to an alkotze im bearing the same ratio to the sums appropriated for such year purstar igraphs (1), (2), (3), and (4), respectively, of section 651, as the price the population of such State and (b) the square of its allotment pertene fined in section 631 (a)) bears to the sum of the corresponding prodrs

of the States: Prorided, That no such allotment to any State for the »s of paragraph (1) or (2) of section 651 shall be less than $100.00 1 allotment for the purpose of paragraph (3) or (4) shall be less than

Snms allotted to a state for a fiscal year and remaining unobligated nd of such year shall remain arailable to such State for the same pepe pert fiscal year (and for such year only) in addition to the sums alioré state for such next fiscal year.

"REGULATIONS AND APPROVAL OF STATE PLANS 53. (a) Within six months after this part becomes effective, the Sorcen trith the approral of the Federal Hospital Council and the Secretar de Incation, and Welfare (hereinafter referred to as the 'Secretari'), sha] I supplement the regulations issued under section 622 to proride general

of construction and equipment, general standards of adequacs and nd requirements comparable to those provided in such regulations as crimination and persons unable to pay, and as to general methods of fion of the State plan, for facilities for which payments are authorized

mart. After such regulations hare been issued, any State desiring to age of this part may submit, as a rerision of, or supplement to its

crtion 623, a plan for a construction program for diagnostic or waters, hospitals for the chronically ill and impaired, rehabilitation rid nursing homes. The Surgeon General shall approre ans such or supplement to the State plan which is based upon a statewide pristing facilities arailable for such purposes and which Lets the requirements of paragraphs (1), (2), (3), (6), (8), and xation 623 (a): Prorided. That if the designated adrisory maneil Dende representatives of nongovernmental organizations or groups concies, concerned with rehabilitation, the plan shall provide for 010 mith organizations, groups, and State agencies so concerned: Informe with the regnlations frescribed under section 622 as revised Somented for the purposes of this part; is forth, with respert to each type of facility, the relative deed d in accordance with such rerised regulations, and prorides for ***}'tion, insofar as financial resources arailable therefor and for pani operation make possible, of such facilities in the order of

operation and maintenance shall be limited to such standards, if any, as the State may prescribe. Approved applications shall be subject to amendment as provided in subsection (c) of section 625.

"(b) In accordance with regulations, any State may file with the Surgeon General a request that a specified portion of an allotment to it under this part for any type of facility be added to the corresponding allotment of another State for the purpose of meeting a portion of the Federal share of the cost of a project for the construction of a facility of the type in such other State. If it is found by the Surgeon General (or, in the case of a rehabilitation facility, by the Surgeon General and the Secretary) that construction of the facility with respect to which the request is made would meet needs of the State making the request and that use of the specified portion of such State's allotment, as requested by it, would assist in carrying out the purposes of this part, such portion of such State's allotment shall be added to the corresponding allotment of the other State, to be used for the purpose referred to above.

"(c) Procedures and conditions for payinents under this part shall be in accord with the provisions of subsection (b) of section 625.

"(d) Notwithstanding subsection (a) of this section, no application for a diagnostic or treatment center shall be approved under such subsection unless the applicant is (1) a State, political subdivision, or public agency, or (2) a corporation or association which owns and operates a nonprofit hospital (as defined in section 631 (g) )."

AMENDMENT OF PARTS A, C, AND D OF TITLE VI Sec. 4. (a) That part of section 601 of the Public Health Service Act which precedes paragraph (a) is amended by striking out "purpose of this title” and inserting in lieu thereof “purpose of parts B through D of this title”.

(b) Subsection (e) of section 625 of the Public Health Service Act is hereby amended to read:

"(e) If any hospital, diagnostic or treatment center, rehabilitation facility, or nursing home for which funds have been paid under this section or under section 654 shall, at any time 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, nonprofit diagnostic or treatment center, nonprofit rehabilitation facility, or nonprofit nursing home 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, diagnostic or treatment center, rehabilitation facility, or nursing home, which has ceased to be nonprofit, from the owners thereof) an amount bearing the same ratio to the then value (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, center, facility, or nursing home is situated) of so much of the hospital, center, facility, or nursing home as constituted an approved project or projects, as the amount of the Federal participation bore to the cost of the construction of such project or projects."

(c) Subsection (g) of section 631 is amended to read: "(g) The terms ‘nonprofit hospital', 'nonprofit diagnostic or treatment center', nonprofit rehabilitation facility', and 'nonprofit nursing home' mean any hospital, diagnostic or treatment center, rehabilitation facility, and nursing home, as the case may be, 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) Subsection (h) of section 631 is amended to read: "(h) 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, except with respect to public health centers, the cost of the acquisition of land ;".

(e) Subsection (k) of section 631 is amended to read: "(k) (1) The term 'Federal share with respect to any project means the proportion of the cost of construction of such project to be paid by the Federal Government. In the case of any project approved prior to October 25, 1949, the Federal share shall be 331 per centum of the cost of construction of such project. In the case of any project approved on or after October 25, 1949, the

croneeds; and of des that the State agency will from time to time rerien its " program for such facilities as a part of its Sate plan and !1f Surgeon General any modifications thereof which it considers

visions of subsections (b) and (c) of section 623 shall he applic Ens trith respect to proferts for construction under this part. sport to hospitals, the prorisions of subsection (d) of such sertion t.cable to State plans with respect to projects for construction

PROVAL OF PROJECTS AND PATMENTS_FEDERAL SHARE Apivications under this part by States, political subdirisions, nuans fit ngencies for (1) public or other nonprofit diagnostic pore, 2) public or other nonprofit hospitals for the chronically

siulie or other nonprofit rehabilitation facilities, or (4) vir die nursing homes shall be submitted, and shall be approred recht (subject also, in the case of rehabilitation facilities, to

Somsptary) if sufficient funds are available from the State's
wiart for such type of facility, in accordance with the pro-
i to the conditions prescribed in subsection (a) of section
poissued under section 622 as revised and supplemented for
part: Provided, however, That (except with respect to

required for compliance with State standards for

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