# Petition — Madry v. Sorel > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_0256%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1978 - **Citation:** 434 U.S. 1086 ## Text Supreme Court, U. S, FILED Petanneneneemne! AT a {MICHAEL RODAK, JR. CLERK | IN THE SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1977 DR. JOHN G. MADRY, JR., Petitioner, V DR. OTTO G. SOREL, DR. EDITH K. MANGONE, DR. JOHN T. BLACKBURN, DR. D. W. McMILLAN, BREVARD HOSPITAL ASSOCIATION, INC., et al., Respondents. PETITION FOR WRIT OF CERTIORARI To the United States Court of Appeals for the Fifth Circuit THEODORE M. FORBES, JR. GAMBRELL, RUSSELL, KILLORIN & FORBES 4000 First National Bank Tower _ Atlanta, Georgia 30303 WILLIAM H. GLEASON P.O. Box 3266 Indialantic Melbourne, Florida 32903 723-5121 (A.C. 305) THORWALD J. HUSFELD LANDIS, GRAHAM, FRENCH, HUSFELD, SHERMAN & FORD, P.A. 110 West Indiana Avenue P.O. Box 329 DeLand, Florida 32720 Attorneys for Petitioner St. Louis Law Printing Co.. Inc., 812 Olive Street 63101 314-231-4477 A Sa INDEX Page PP bbc cc cen aNebu tase dses bi benneaane 2 CE Ske cae pakGess Feat pec e h Wae wee eS 2 I oon ck ck sinc ewneeanceuea 2 Constitutional Provisions and Statutes Involved ........ 3 I i ot cadcesémeescueneu ares 5 Reasons for Granting the Writ... 0.0... ee es 11 1. The decision of the United States Court of Appeals for the Fifth Circuit conflicts with decisions of other United States Courts of Appeals on the same I $5 0-0.6 6h u che cuee clewdetanceseeeer ll 2. The question presented is one of national scope... 12 3. The issue is presented here sharply ............ 14 4. The question involved in this case has arisen with sufficient frequency to warrant this Court's atten- BN cekeced eke keae ve ee ekeaeeianeent 15 SE oda sb Oyen bicees seek ee Cae cae ease eees 16 Appendix Cases involving Federal Jurisdiction based on Hill-Burton EEE bh edechucavnes erence reeseaaenteate awa A-l Order of United States District Court from which appeal EE er ye eer ey Peer e eee ee A-5 Opinion of United States Court of Appeals ............ A-9 Judgment of the United States Court of Appeals ........ A-15 Notice from the Clerk of the United States Court of Appeals that petitions for rehearing and rehearing en banc have EE IE ee te PEA naka lars) say lene A-16 Copy of opinion in Greco v. Orange Memorial Hospital Corp., $13 F.2d 873 (Sth Cir. 1975) .............. A-17 Copy of opinion in Sosa v. Board of Managers of the Val Verde Memorial Hospital, 437 F.2d 173 (Sth Cir. 1971) A-37 Prior Order of United States District Court containing find- ings of fact in the instant case ................005, A-47 Hospital Survey and Construction Act, 60 Stat. 1041 ....A-56 Hospital Survey and Construction Amendments of 1949, 63 Stat. 898 Hospital and Medical Facilities Amendments of 1964, 78 UE Ava dae we oc s oe cob wed mice reese A-82 Hospital Programs Extension Act of 1973, 87 Stat. 91 ..A-112 Table of Authorities Cases Bricker v. Sceva Speare Memorial Hospital, 339 F. Supp. 234 (D.N.H.), aff'd sub nom., Bricker v. Crane, 468 F. re ere rrr 12 Bruner v. United States, 343 U.S. 112 (1952) .......... 15 Citta v. Delaware Valley Hospital, 313 F. Supp. 301 (E.D. i Pt +. skareas ane uc ueeee snd tieuaul. 13 Commissioner v. Estate of Bosch, 387 U.S. 456 (1967)... 14 Doe v. Bolton, 410 U.S. 179 (1973) ................ 14 Don v. Okmulgee Memorial Hospital, 443 F.2d 234, 237 CO Gee GPE cok cccopudscevscesrccescadees 12 Foster v. Mobile County Hospital, 398 F.2d 227 (Sth Cir. EE. 2. .uk inden ee 64s oS AVENE DS HOES oh OwEN eB 13 Greco v. Orange Memorial Hospital Corporation, 513 F. 2d 873 (Sth Cir.), cert. denied, 423 U.S. 1000 RET errr rere eye eee 6,7, 11, 13 Hodge v. Paoli Memorial Hospital, 433 F. Supp. 281 (E.D. De, GEOR spec vec bacseciewesecenecsccesecenues 13 Jackson v. Norton-Children’s Hospitals, Inc., 487 F.2d 502 (6th Cir. 1973), cert. denied, 416 U.S. 1000 (1974) 12 O’Neill v. Grayson County War Memorial Hospital, 472 F.2d 1140 (6th Cir. 1973) ....... cece eee eee ees 13 Shaw v. Hospital Authority, 507 F.2d 625 (Sth Cir. 1975) 13 Simkins v. Moses H. Cone Memorial Hospital, 323 F.2d 959 (4th Cir. 1963) (en banc), cert. denied, 376 U.S. PP rrTeTrerrTT irre rte 12 Sosa v. Board of Managers of Val Verde Memorial Hos- pital, 437 F.2d 173 (Sth Cir. 1971) ........+.6,7, 11, 13 Taylor v. St. Vincents Hospital, 424 U.S. 948 (1976) .... 11 Ward v. St. Anthony Hospital, 476 F.2d 671 (10th Cir. Pr err err Tr TT rrr ret kr er 12 Constitution Fifth Amendment to the Constitution of the United States 6 Fourteenth Amendment to the Constitution of the United 2 ee eee ede ake ooh ae se 6 iv Statutes Health Programs Extension Act of 1973, 87 Stat.91..... 11 Section 401(b) (87 Stat. 95, 42 U.S.C.A. 300a-7) ... 14 Hospital Survey and Construction Act, 60 Stat. 1041 (1946), 42 U.S.C. §§ 291, et seq... 0... eee eee, 12 Section 601 (60 Stat. 1041, 42 U.S.C.A. § 291)... .12, 13 Section 622 (60 Stat. 1042, 42 U.S.C.A. § 29lc).... 10 Section 623 (60 Stat. 1043, 42 U.S.C.A. § 291d).... 8 Section 624 (60 Stat. 1045, 42 U.S.C.A. §211b)... 8 Section 625 (60 Stat. 1045, 42 U.S.C.A. §29le)... 8 Section 631 (60 Stat. 1046, 42 U.S.C.A.§ 29lo).... 13 Hospital Survey and Construction Amendments of 1949, | PP re 9 Hospital and Medical Facilities Amendments of 1964, 78 WO, SEF oo vvccccnscebueee cee 9 58 UBL. § 125GG8) . 00 vckiveccenceeunene 2 8 VSL. § 1S00RD ... 06 snuddecesecne ee 6 42 US.C.A. § 1983, 17 Stat. 13 20... 0.0... eee. 6 Florida Statutes § 196.122 ................... 10 Miscellaneous H.R. Rep. No. 93-227, 93d Cong., Ist Sess.; 1973 U.S. Code & Cong. News at p. 1473 .................. 1] H.R. Rep. 2519, 79th Cong., 2d Sess.; 1946 U.S. Code & Comp, Moms 1908 oo... occcccccvucceceudeee 12 S. Rep. 790, 81st Cong., Ist Sess.; 1949 U.S, Code & Cong. etna Ms MUTT 12 IN THE SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1977 J ae DR. JOHN G. MADRY, JR., Petitioner, v DR. OTTO G. SOREL, DR. EDITH K. MANGONE, DR. JOHN T. BLACKBURN, DR. D. W. McMILLAN, BREVARD HOSPITAL ASSOCIATION, INC., and THE MEMBERS OF ITS BOARD OF GOVERNORS,’ Respondents. et es ecto om mene —— 69-136-Orl-Civ-Y. Dr. Otto G. Sorel, et al., Defendants. J ORDER (1) Defendant Brevard Hospital Association, Inc. is a non- profit Florida corporation and owns and operates Brevard Hos- pital. The property where said Hospital is now situated, and at all times pertinent hereto has been situated, was acquired by the defendant Association from the City of Melbourne for the nominal consideration of one dollar, the property to revert to the City if it should cease to be used for a hospital. The original facility located on that property was paid for by contributions by the public and funds appropriated by the Federal Govern- ment pursuant to the Hill-Burton Act, 42 U. S.C. A. § 291 ef seq., in approximately equal portions, in 1962. In 1967 the facility was expanded, again using Hill-Burton funds for approximately one-third of the cost and the remainder being derived from public contributions and private loan. Plans exist for a further expansion, and the defendant Association has a commitment from the United States Department of Health, Education & Welfare to guarantee pursuant to the Hill-Burton Act, a loan for 90% of the cost of the expansion and to pay three percentage points of the annual interest charges on such loan. There thus will be a continuing infusion of Federal funds into the hospital during the life of the loan. —_e When the parking lot of the Hospital was expanded, Brevard County supplied labor and equipment to accomplish the work, without charge to the Hospital or Association. (2) At the time the Hill-Burton funds were obtained for con- struction of the original facility in 1962, the by-laws of the defendant Association provided in Article III, Secvtion 1, Para- graph (A) as follows: “Composition of the Board of Governors—A Board of Governors comprising, ex-officio, the Mayors of the in- corporated municipalities in Brevard County Commissioner District 3 and 5 and the Brevard County Commissioners of Districts 3 and 5; together with 12 elected members of the Association of whom four are elected at each annual meeting of the Association for a term of three years.” On June 6, 1973 [sic.; should be 1963], the by-laws of the defendant Association were revised. Article III, Section 1, Para- graph A of the revised by-laws provided: “Composition of the Board of Governors—A Board of Governors comprising, ex-officio, the Mayors of the In- corporated Municipalities in Brevard County Commis- sioner Districts 3 and 5 and the Brevard County Commis- sioners of the Districts 3 and 5; together with 12 elected members of the Association of whom four are elected at each annual meeting of the Association for a term of three years. No member of the Board of Governors or the spouse of an elected member of the Board of Governors shall be an employee of Brevard Hospital.” At the hearing on August 14, 1974 counsel for the defendant Association acknowledged that the by-laws had been amended again after Dr. Madry’s dismissal and after this suit was begun to eliminate the county and municipal officials who theretofore had been members of the Board of Governors. Counsel for the —_Y Hospital urged that because the Mayors and County Commis- sioner members were “ex officio”, they were not entitled to vote. There was no such restriction on their participation in the by- laws, and the Court does not so interpret the phrase “ex officio”. In any event, the municipal and county officers were entitled to be members of the Board of Governors and presumably could have had some influence upon its deliberations and decisions even though there is no evidence that they did. (3) The Brevard Hospital accepts medically indigent patients from the Brevard County Health Department and receives a flat fee per patient, which is not sufficient to cover the cost of the medical services. One such patient was the woman whose treatment by Dr. Madry, plaintiff herein, was the event that triggered his expulsion from the Hospital’s Medical Staff, as pointed out hereinafter. (4) Brevard Hospital is exempt from the ad valorem taxes levied generally upon real property by Brevard County and the City of Melbourne. That exemption constitutes an indirect payment of County and City funds to the Hospital and is equally as effective a contribution to the Hospital as a direct payment would be. That tax exemption is created by § 196.192, Fla. Stat., a law of the State of Florida. (5) By reason of the participation of municipal and county Officials, as members of the Board of Governors, in the affairs of the Hospital prior to the time of Dr. Madry’s expulsion; by reason of the application of City property, County property and Services and Federal funds to the construction, expansion and improvement of the Hospital; by reason of the indirect sub- sidization of the Hospital by the County and City through tax exemption pursuant to State law; and by reason of the relation- ship between the Hospital and Brevard County for care of in- digents, the acts of the Board of Governors of Brevard Hospital Association, Inc. at the time of Dr. Madry’s expulsion were sufficiently infused with state action so as to require that such — A-50 — acis Must comport with the requirements of “due process of law” within the meaning of the Fifth and Fourteenth Amendments of the United States Constitution. See Sosa v. Board of Managers of Val Verde Memorial Hospital, 437 F.2d 173, 174 (Sth Cir. 1971), and cases there cited. This Court previously so ruled herein by its orders of July 15, and September 1, 1971. (6) This case arises under the Constitution and laws of the United States, and the amount in controversy exceeds $10,000, exclusive of interest and costs. Therefore, this Court has juris- diction of the case under 28 U.S.C.A. § 1331. (7) Plaintiff Dr. John G. Madry was a member of the Medi- cal Staff of Brevard Hospital. Following a series of events that occurred over a period of several years, Dr. Madry was on May 27, 1966 “permanently suspended” for [sic] his professional privileges at that Hospital and his appointment to its Medical Staff “terminated”. (8) As previously ruled herein, Dr. Madry’s original expul- sion from the Medical Staff did not meet the requirements of due process of law for a fair hearing before an impartial tribunal after adequate notice of the hearing and of the matters to be asserted against him. Although the practice of medicine in a particular hospital may be a privilege and not an absolute right, yet the blemish upon a professional reputation and the restric- tion of a physician's opportunity to earn a livelihood that result when he is expelled from a hospital constitute a sufficient prop- erty right to require that the expulsion be accomplished in accordance with due process of law. Sosa v. Val Verde Hos- pital, supra; Woodbury v. McKinnon, 447 F.2d 839 (Sth Cir. 1971). (9) Therefore, by Orders entered July 15, 1971 and Sep- tember 1, 1971, this Court directed the defendant Board of Governors of the Brevard Hospital Association to hold a “due process of law hearing” of the charges brought against plaintiff. on ft m- Said Board of Governors (ten of its twelve members sitting) held hearings over a period of six days and 60 hours during November 1971, and on November 19, 1971, the Board’s counsel filed with this Court “Findings of the Board of Gov- ernors of Brevard Hospital Regarding Dr. John G. Madry, Jr.” Of the nine charges against plaintiff, the Board in such “Find- ings” found no evidence cuncerning Charge 9 and found Charge 3 not substantiated. It found the remaining charges “substantiated” and concluded, “The Board does hereby reaffirm the permanent suspension of Dr. John G. Madry from member- ship on the Medical Staff of Brevard Hospital.” \ After the transcript of the hearings before the Board of Governors was prepared and filed with this Court, plaintiff filed a “Motion (1) To Set Aside ‘Findings of the Board of Governors of Brevard Hospital Regarding Dr. John G. Madry, Jr.’; (2) For Summary Judgment for Plaintiff; (3) For Tem- porary and Permanent Injunctive Relief; and (4) In the Alter- native, for a Hearing Before a Fair and Impartial Tribunal.” After consideration of the written and oral arguments of counsel for all parties addressed to those motions, and upon consideration of all the pleadings and all the evidence of rec- ord, the Court finds further: (10) The hearings before the Hospital’s Board of Gov- ernors in November, 1971, failed to accord plaintiff the “due process of law” to which this Court has previously found him to be entitled. At the beginning of such hearings plaintiff challenged the ability of the Board of Governors to grant plaintiff the fair and impartial hearing that is an essential in- gredient of due process of law. In connection therewith, plain- tiff was allowed to examine each of the Board’s members present as to such member’s interest, bias, prejudice, or pre- conceived ideas. Additionally, plaintiff has interrogated some of the Board’s members by depositions. —_— or m= “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 ap- propriated 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 con- struction the sums provided in section 624. The sums appropri- ated pursuant to this section shall be used for making payments to States which have submitted, and had approved by the Sur- geon General, State plans for carrying out the purposes of sec- tion 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 by general regulation pre- scribe— “(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 maxi- mum allowance. “(b) The number of beds required to provide adequate hos- pital 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 num- ber of beds for tuberculosis 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 popu- lation. “(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 hos- pitals 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 discrimina- tion on account of race, creed, or color, and shall provide for — A-61 — adeyuate hospital facilities for persons unable to pay therefor. Such regulation may require that before approval of any applica- tion 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; ee Done (3) provide for the designation of a State advisory coun- cil 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 serv- ices 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 de- veloped a program under part B of this title, conforms to the program so developed except for any modification re- quired in order to comply with regulations prescribed pur- suant 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 require- ments 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 avail- able 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 personne: standards on a merit basis (ex- cept that the Surgeon General shall exercise no authority — with respect to the selection, tenure of office, or compensa- tion 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 con- struction project an opportunity for hearing before the State agency; “(9) provide that the State agency will make such re- ports in such form and containing such information as the Surgeon General may from time to time reasonably re- quire, 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 modifica- tion complies with the provisions of such subsection, the Sur- geor General shall thereupon approve such plan or modifica- tion. “(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 reasor. of any change — A-64 — 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, 1948, has not enacted legis- lation providing that compliance with minimum standards of maintenance and operation shall be required in the case of hos- pitals which shall 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 ap- proved 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 allotment percentage (as defined in section 631 (a)) 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 33% per centum of the cost of approved projects within such State. The Surgeon General shall calculate the al- lotments 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 unobli- gated 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 — A-65 — allotted to a State but remaining unobligated 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 2 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 specifica- tions therefor in accordance with the regulations prescribed by the Surgeon General under section 622 (c), (3) reasonable assur- ance that title to such site is or will be vested solely in the ap- plicant, (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 en- gaged in construction of the project will be not less than the prevailing local wage rates for similar work as determined in ac- cordance 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 to pay 33% per centum of the cost of construction of such project are avail- able from the allotment to the State, and if the Surgeon General finds (A) that the application contains such reasonable assur- ance as to title, financial support, and payment of prevailing rates of wages, (B) that the plans and specifications are in ac- cord with the regulations prescribed pursuant to section 622, (C) that the application is in conformity with the State plan ap- proved under section 623 and contains an assuran © that the applicant will conform to the applicable requirements of the — A-66 — State plan and of the regulations prescribed pursuant to section 622 (f) regarding the provision of facilities without discrimina- tion 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 ap- proved 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 622 (d). No ap- plication shall be disapproved until the Surgeon General has afforded 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 33% per centum of the estimated cost of con- struction of the project and designate the appropriation from which it is to be paid. Such certification shall provide for pay- ment 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 Gen- eral, 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 sub- section, 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 o> £6? — of the estimated cost of a project. An amended certification may direct that any additional payment be made from the ap- plicable 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 com- pletion of construction, (A) be sold or transfered 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 hos: pital 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) 33% per centum 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 this titl— “(a) the allotment percentage for any State shall be 100 per centum less 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 allotment percentage shall in no case be more than 75 per centum or less than 33% per centum, — A-68 — and (2) the allotment percentage for Alaska and Hawaii shall be 50 per centum each, and the allotment percentage for Puerto Rico shall be 75 percentum, “(b) the allotment 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 promulga- tion: 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; “(e) the term ‘hospital’ (except as used in section 622 (a) and (b)) includes public health centers and general, tuberculosis, mental, chronic disease, and other types of hospitals, and related facilities, such as laboratories, out-patient departments, nurses’ home aad training facilities, and central service facilities oper- ated in connection with hospitals, but does not include any hospital furnishing primarily domiciliary care; “(f) the term ‘public health center’ means a publicly owned facility for the provision of public health services, including related facilities such as laboratories, clinics, and administrative offices operated in ~onnection with public health centers, — A-69 — “(g) the term ‘nonprofit hospital’ means any hospital owned and operated by a corporation or association, no part of the net earnings of which inures, or may lawfully inure, to the bene- fit of any private shareholder or individual; “(h) the term ‘construction’ includes construction of new build- ings, expansion, remodeling, and alteration of existing build- ings, and initial equipment of any such buildings; 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; and “(i) the term ‘cost of construction’ means the amount found by the Surgeon General to be necessary for the construction of a project. “Withholding of certification “Sec. 632. (a) Whenever the Surgeon General, after reason- able notice and opportunity for hearing to the State agency designated in accordance with section 612(z) (1), finds that the State agency is not complying substantialiy with the pro- visions required by section 612 (a) to be contained in its appli- cation for funds under part B, or after reasonable notice and opportunity for hearing to the State agency designated in ac- cordance with section 623 (a) (1) finds (1) that the State agency is not complying substantially with the provisions required by section 623 (a), or by regulations prescribed pursuant to sec- tion 622, to be contained in its pian submitted under section 623 (a), or (2) that any funds have been diverted from the purposes for which they have been allotted or paid, or (3) that any assurance given in an application filed under section 625 is not being or cannot be carried out, or (4) that there is a substantial failure to carry out plans and specifications ap- proved by the Surgeon General under section 625, 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 or part C, 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 alreary been approved and which is not directly affected by such default, he may withhold further cer- tifications until there is no longer any failure 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 expended. “(b) (1) If the Surgeon General refuses to approve any appli- cation under section 625, the State agency through which the application was submitted, or if any State is dissatisfied with the Surgeon General's action under subsection (a) of this sec- tion, 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. “(2) The findings of fact by the Surgeon General, unless substantially contrary to the weight of the evidence, shall be conclusive; but the court, for good cause shown, may remand the case to the Surgeon General to take further evidence, and the Surgeon General may thereupon make new or modified findings of fact and may modify his previous action, and shall certify to the court the transcript and record of the further pro- ceedings. Such new or modified findings of ‘act shall likewise be conclusive unless substantially contrary to the weight of the evidence. —_* “(3) The court shall have jurisdiction to affirm the action of the Surgeon General or to set it aside, in whole or in part. The judgment of the court shall be subject to review by the Supreme Court of the United States upon certiorari or certification as provided in sections 239 and 240 of the Judicial Code, as amended. “Federal hospital council; administration of title “Sec. 633. (a) The Surgeon General is authorized to make such administrative regulations and perform such other func- tions as he finds necessary to carry out the provisions of this title. Any such regulations shall be subject to the approval of the Administrator. “(b) In administering this title, the Surgeon General shall con- sult with a Federal Hospital Council consisting of the Surgeon General, who shall serve as Chairman ex officio, and eight members appointed by the Administrator. Four of the eight appointed members shall be persons who are outstanding in fields pertaining to hospital and health activities, three of whom shall be authorities in matters relating to the operation of hos- pitals, and the other four members shall be appointed to rep- resent the consumers of hospital services and shal! be persons familiar with the need for hospital services in urban or rural areas. Each appointed member shall hold office for a term of four years, except that any member appointed to fill a vacancy Occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed for the remainder of such term, and the terms of office of the members first tak- ing office shall expire, as designated by the Administrator at the time of appointment, two at the end of the first year, two at the end of the second year, two at the end of the third year, and two at the end of the fourth year after the date of appoint- ie A-T2 ment. An appointed member shall not be eligible to serve con- tinuously for more than two terms but shall be eligible for re- appointment if he has not served immediately preceding his reappointment. The Council is authorized to appoint such spe- cial advisory and technical committees as may be useful in _ carrying out its functions. Appointed Council members and members of advisory or technical committees, while serving on business of the Council, shall receive compensation at rates fixed by the Administrator, but not exceeding $25 per day, and shall also be entitled to receive an allowance for actual and necessary travel and subsistence expenses while so serving away from their places of residence. The Council shall meet as frequently as the Surgeon General deems necessary, but not less than once each year. Upon request by three or more members. it shall be the duty of the Surgeon General to call a meeting of the Council. “(c) In administering the provisions of this title, the Surgeon General, with the approval of the Administrator, is author- ized to utilize the services and facilities of any executive de- partment in accordance with an agreement with the head thereof. Payment for such services and facilities shall be made in advance or by way of reimbursement, as may be agreed upon between the Administrator and the head of the executive department furnishing them. “Conferences of state agencies “Sec. 634. Whenever in his opinion the purposes of this title would be promoted by a conference, the Surgeon General may invite representatives of as many State agencies, designated in accordance with section 612 (a) (1) or section 623 (a) (1), to confer as he deems necessary or proper. Upon the applica- tion of five or more of such State agencies, it shall be the duty of the Surgeon General to call a conference of representatives —*. a of all State agencies joining in the request. A conference of the representatives of all such State agencies shall be called annually by the Surgeon General. “State control of operations “Sec. 635. Except as otherwise specifically provided, nothing in this title shall be construed as conferring on any Federal officer or employee the right to exercise any supervision or control over the administration, personnel. maintenance, or operation of any hospital with respect to which any funds have been or may be expended under this title.” Sec. 3. Paragraph (2) of section 208 (b) of the Public Health Service Act, as amended, is amended by inserting “(A)” before the words “to assist”; by striking out the word “paragraph” and inserting in lieu thereof the word “clause”: and by striking out the period at the end of such paragraph and inserting in lieu thereof a comma and the following: “and (B) to assist in car- rying out the purposes of title VI of this Act, but not more than twenty such officers appointed pursuant to this clause shall hold office at the same time.” Sec. 4. Section 1 of the Public Health Service Act is amended to read: “Section 1. Titles I to VI, inclusive, of this Act may be cited as the ‘Public Health Service Act’.” Sec. 5. The Act of July 1, 1944 (58 Stat. 682), is hereby further amended by changing the number of title VI to title VII and by changing the numbers of sections 601 to 612, in- clusive, and references thereto, to sections 701 to 712. respec- tively. Approved August 13, 1946. — A-74 — HOSPITAL SURVEY AND CONSTRUCTION AMENDMENTS OF 1949 63 Stat. 898 An Act to amend the Hospital Survey and Construction Act (title VI of the Public Health Service Act), to extend its duration and provide greater financial assistance in the construction of hospitals, and for other purposes, 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 “Hospital Survey and Construc- tion Amendments of 1949”. Extension of Duration and Increase in Authorized Appropriations Sec. 2. (a) The first sentence of section 621 of the Public Health Service Act is amended to read as follows: “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, 1950, and for each of the five succeeding fiscal years, the sum of $150,000,000 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,” (b) The paragraph “Grants for hospital construction” under the heading “Public Health Service” in the Federal Security Agency Appropriation Act, 1950, is amended by striking out “$75,000,000” and inserting in lieu thereof “$150,000,000”. —s Additional Federal Aid in Construction of Hospitals Sec. 3. (a) Section 623 of the Public Health Service Act is amended by adding after subsection (d) the following new sub- section: “(e) The State plan may include standards for determination of the Federal share of the cost of projects approved in the State. Such standards shall provide equitably (and, to the ex- tent practicable, on the basis of objective criteria) for variations between projects or classes of projects on the basis of the eco- nomic status of areas, relative need as between areas for addi- tional hospital facilities, and other relevant factors. No such standards shall provide for a Federal share of more than 66% per centum or less than 334% per centum of the cost of construc- tion of any project. The Surgeon General shall approve any such standards and any modifications thereof which comply with the provisions of this subsection.” (b) Sections 624 and 625 (b) of such Act are each amended by striking out “33% per centum” and inserting in lieu thereof “the Federal share”. (c) Section 625(e) of such Act is amended by striking out “33s per centum of the then value of such hospital, as deter- mined 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” and inserting in lieu thereof the following: “an amount bearing the same ratio to the then value (as de- termined 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) of so much of the hospital as con- stituted an approved project or projects, as the amount of the Federal participation bore to the cost of the construction of such project or projects”. —te Plans Sec. 4, Section 632 (a) of such Act is amended by inserting after “under section 625,” in clause (4) thereof the following: “or (5) that adequate State funds are not being provided an- nually for the direct administration of the State plan,”. Studies and Demonstrations Relating to Coordinated Use of Hospital Facilities Sec. 5. Part D of title VI of such Act is amended by adding after section 635 the following new section: “Studies and Demonstrations Relating to Coordinated Use of Hospital Facilities “Sec. 636. In carrying out the purposes of section 301 with respect to hospital facilities, the Surgeon General is authorized to conduct research, experiments, and demonstrations relating to the effective development and utilization of hospital services, —_s facilities, and resources, and, after consultation with the Federal Hospital Council, to make grants-in-aid to States, political sub- divisions, universities, hospitals, and other public and private nonprofit institutions or organizations for projects for the con- duct of research, experiments, or demonstrations relating to the development, utilization, and coordination of hospital services, facilities, and resources. Any award made under this section for any such project in any fiscal year may include amounts for not to exceed the four succeeding fiscal years, and such amounts for such succeeding fiscal years shall constitute contractual obli- gations of the Federal Government: Provided, That the total expenditures for all such projects may not exceed $1,200,000 in any fiscal year.” Purpose of Act Sec. 6. Section 601 of such Act is amended to read as follows: “Sec. 601. The purpose of this title is— “(a) to assist the several States to inventory their exist- ing hospitals (as defined in section 631 (e)), to survey the need for construction of hospitals, and to develop programs for construction of such public and other nonprofit hos- pitals as will, in conjunction with existing facilities, afford the necessary physical facilities for furnishing adequate hos- pital, clinic, and similar services to all their people; “(b) to assist in the construction of public and other nonprofit hospitals in accordance with such programs; and “(c) to authorize the Surgeon General to conduct, and make grants for the conduct of, research, experiments, and demonstrations relating to the effective development and utilization of hospital services, facilities, and resources, and to promote the coordination of such experiments and demonstrations and the useful application of their results.” — A-79 — Minimum Allotment Sec. 7. Section 624 of such Act is amended by striking out “$100,000” and inserting in lieu thereof “$200,000”. Filing of Applications Sec. 8. Section 625(a) of such Act is amended to read as follows: “(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. If two or more such agencies join in the construction of the project, the application may be filed by one or more of such agencies. Such application shall set forth (1) a description of the site for such project; (2) plans and specifications therefor in accordance with the regulations pre- scribed by the Surgeon General under section 622(e); (3) rea- sonable assurance that title, as defined in section 631 (j), to such site is or will be vested in one or more of the agencies filing the application or in a public or other non-profit agency which is to operate the hospital; (4) reasonable assurance that adequate financial support will be available for the construction of the project and for its maintenance and operation when completed; (5) reasonable assurance that the rates of pay for laborers and mechanics engaged in construction of the project 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; and (6) a certification by the State agency of the Federal share for the project. The Surgeon General shall approve such applica- tion 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 Surgeon General finds (A) that the ap- plication contains such reasonable assurance as to title, financial — A-80 — 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 in the operation of the hospital there will be compliance with the applicable requirements of the State plan and of the regulations prescribed under section 622(f) regarding the provision of facilities without discrimination on ac- count of race, creed, or color, and for furnishing needed hospital facilities for persons unable to pay therefor, and with State stand- ards for operation and maintenance; and (D) that it 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 622(d). No application shall be disapproved until the Surgeon General has afforded the State agency an opportunity for a hearing.” Definitions Sec. 9. (a) Subsection (g) of section 631 of such Act is amended to read as follows: “(g) the term ‘nonprofit hospital’ means any hospital 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;”. (b) Such section is further amended by striking out “and” at the end of paragraph (h), by striking out the period at the end of paragraph (i) and inserting in lieu thereof a semicolon, and by inserting after paragraph (i) the following new paragraphs. “(j) 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 Sur- geon General finds sufficient to assure for a period of not — A-81 — less than fifty years undisturbed use and possession for the purposes of construction and operation of the project; “(k) 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 under part C. In the case of any project approved prior to the effective date of this subsection, the Federal share shall be 3314 per centum of the cost of construction of such project. In the case of any project approved on or after the effective date of this subsection, the Federal share shall be determined as follows: “(1) 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; “(2) if the State plan does not contain such stand- ards, the Federal share shal! be the amount (not less than 33% per centum and not more than either 6634 per centum or the State’s allotment percentage, which- 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 estab- lished 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.” Effective Date Sec. 10. This Act shall take effect upon the date of its enact- ment. Approved October 25, 1949. — A-82 — HOSPITAL AND MEDICAL FACILITIES AMENDMENTS OF 1964 78 Stat. 447 An Act to improve the public health through revising, con- solidating, and improving the hospital and other medical facilities provisions of the Public Health Service Act. 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 “Hospital and Medical Facili- ties Amendments of 1964”. Sec. 2. Part B of title III of the Public Health Service Act (42 U.S.C. 243, et seq.) is amended by inserting at the end thereof the following new section: “Special project grants for assisting in the areawide planning of health and related facilities “Sec. 318. There are authorized to be appropriated $2,500,- 000 for the fiscal year ending June 30, 1965, and $5,000,000 for each of the next four fiscal years to enable the Surgeon General to make grants to the appropriate State agency or agencies designated in accordance with section 604(a)(1) to cover not to exceed 50 per centum of the costs of projects for developing (and from time to time revising) and supervising and assisting in the carrying out of comprehensive regional, metropolitan area, or other local area plans for coordination of existing and planned health facilities, and facilities related thereto, and services provided by such facilities.” Sec. 3. (a) Title VI of the Public Health Service Act (42 U.S.C.. ch. 6A. subch. IV) is amended to read as follows: — A-83 — “Title VI—Assistance for Construction and Modernization of Hospitals and Other Medical Facilities “Declaration of purpose “Sec. 600. The purpose of this title is— “(a) to assist the several States in the Carrying out of their programs for the construction and modernization of such public or other nonprofit community hospitals and other medical facilities as may be necessary, in conjunc- tion with existing facilities, to furnish adequate hospital, clinic, or similar services to all their people; “(b) to stimulate the development of new or improved types of physical facilities for medical, diagnostic, pre- ventive, treatment, or rehabilitative services; and “(c) to promote research, experiments, and demonstra- tions relating to the effective development and utilization of hospital, clinic, or similar services, facilities, and re- sources, and to promote the coordination of such research, experiments, and demonstrations and the useful applica- tion of their results. “Part A—Grants and Loans for Construction and Modernization of Hospitals and Other Medical Facilities “Authorization of appropriations for construction grants “Sec. 601. In order to assist the States in carrying out the purposes of section 600, there are authorized to be appro- priated— “(a) for the fiscal year ending June 30, 1965, and each of the next four fiscal years— —_— “(1) $70,000,000 for grants for the construction of public or other nonprofit facilities for long-term care; “(2) $20,000,000 for grants for the construction of public or other nonprofit diagnostic or treatment centers; “(3) $10,000,000 for grants for the construction of public or other nonprofit rehabilitation facilities, “(b) for grants for the construction of public or other nonprofit hospitals and public health centers and for grants for modernization of such facilities and the facili- ties referred to in paragraph (a), $150,000,000 for the fiscal year ending June 30, 1965, $160,000,000 for the fiscal year ending June 30, 1966, $170,000,000 for the fiscal year ending June 30, 1967, and $180,000,000 each for the next two fiscal years. “State Allotments “Sec. 602. (a) (1) Each State shall be entitled for each fiscal year to an allotment bearing the same ratio to the sums ap- propriated for each year pursuant to subparagraphs (1), (2), and (3), respectively, of section 601(a), and to an allotment bearing the same ratio to the new hospital portion of the sums appropriated for such year pursuant to section 601(b), as the product of— “(A) the population of such State, and “(B) the square of its allotment percentage, bears to the sum of the corresponding products for all of the States. As used in this paragraph, the new hospital portion of sums appropriated pursuant to section 601(b) (which portion shall be available for grants for the construction of public or — A-85 — other nonprofit hospitals and public health centers) is 100 per centum of such sums in the case of the fiscal year ending June 30, 1965, seven-eighths thereof in the case of the first fiscal year thereafter, twenty-seven thirty-fourths thereof in the case of the second fiscal year thereafter, thirteen-eighteenths thereof in the case of the third fiscal year thereafter, twenty-five thirty- sixths thereof in the case of the fourth fiscal year thereafter. “(2) For each fiscal year beginning after June 30, 1965, the Surgeon General shall, in accordance with regulations, make allotments from the remainder of the sums appropriated pur- suant to section 601(b) (which portion shall be available for grants for modernization of facilities referred to in paragraphs (a) and (b) of section 601) on the basis of the population, the extent of the need for modernization of the facilities referred to in paragraphs (a) and (b) of section 601, and the financial need of the respective States. “(b) (1) The allotment to any State under subsection (a) for any fiscal year which is less than— “(A) $25,000 for the Virgin Islands, American Samoa, or Guam and $50,000 for any other State, in the case of an allotment for grants for the construction of public or other nonprofit rehabilitation facilities, “(B) $50,000 for the Virgin Islands, American Somoa, or Guam and $100,000 for any other State in the case of an allotment for grants for the construction of public or other nonprofit diagnostic or treatment centers, or “(C) $100,000 for the Virgin Islands, American Samoa, or Guam and $200,000 for any other State in the case of an allotment for grants for the construction of public or other nonprofit facilities for long-term care or for’ the construction of public or other nonprofit hospitals and public health centers, or for the modernization of facilities referred to in paragraph (a) or (b) of section 601, — A-86 — shall be increased to that amount, the total of the increases thereby required being derived by proportionately reducing the allotment from appropriations under such subparagraph or para- graph to each of the remaining States under subsection (a) of this section, but with such adjustments as may be necessary to prevent the allotment of any of such remaining States from appropriations under such subparagraph or paragraph from be- ing thereby reduced to less than that amount. “(2) An allotment of the Virgin Islands, American Samoa, or Guam for any fiscal year may be increased as provided in para- graph (1) only to the extent it satisfies the Surgeon General, at such time prior to the beginning of such year as the Surgeon General may designate, that such increase will be used for pay- ments under and in accordance with the provisions of this part. “(c) For the purposes of this part— “(1) The ‘allotment percentage’ for any State shall be 100 per centum less 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 United States, except that (A) the allotment percentage shall in no case be more than 75 per centum or less than 33% per centum, and (B) the allotment percentage for the Commonwealth of Puerto Rico, Guam, American Samoa, and the Virgin Islands shall be 75 per centum. “(2) The allotment percentages shall be determined by the Surgeon General between July 1 and September 30 of each even-numbered year, on the basis of the average of the per capita incomes of each of the States and of the United States for the three most recent consecutive years for which satisfac- tory data are available from the Department of Commerce, and the States shall be notified promptly thereof. Such determi- nation shall be conclusive for each of the two fiscal years in the period beginning July 1 next succeeding such determination. —_Y (3) The population of the several States shall be determined on the basis of the latest figures certified by the Department of Commerce. “(4) The term ‘United States’ means (but only for purposes of paragraphs (1) and (2)) the fifty States and the District of Columbia. “(d) (1) Any sum alloted to a State, other than the Virgin Islands, American Samoa, and Guam for a fiscal year under this section and remaining unobligated at the end of such year shall remain available to such State, for the purpose for which made, for the next fiscal vear (and for such year only), in addition to the sums allotted to such State for such purpose for such next fiscal year. “(2) Any sum allotted to the Virgin Islands, American Samoa, or Guam for a fiscal year under this section and remaining un- obligated at the end of such year shall remain available to it, for the purpose for which made, for the next two fiscal years (and for such years only), in addition to the sums allotted to it for such purpose for each of such next two fiscal years. “(e) (1) Upon the request of any State that— “(A) a specified portion of any allotment of such State under paragraph (1) of subsection (a), other than an allot- ment for grants for the construction of public or other nonprofit rehabilitation facilities, be added to another al- lotment of such State under paragraph (1) or (2) of such subsection, other than an allotment for grants for the con- struction of public or other nonprofit hospitals and public health centers, or “(B) a specified portion of an allotment of such State under paragraph (2) of subsection (a) be added to an ai- lotment of such State under paragraph (1) of such sub- section, — A-88 — and upon simultaneous certification to the Surgeon General by the State agency in such State to the effect that— “(C) it has afforded a reasonable opportunity to make applications for the portion so specified and there have been no approvable applications for such portion, or “(D) in the case of a request to transfer a portion of an allotment under paragraph (1) of subsection (a) for grants for the construction of public or other nonprofit hospitals and public health centers, use of such portion as requested by such State agency will better carry out the purposes of this title, — the Surgeon General shall promptly (but after application of sub- section (b)) adjust the allotments of such State in accordance with such request and shall notify the State agency. “(2) In addition to the transfer of portions of allotments un- der paragraph (1), the Surgeon General, upon the request of any State that a specified portion of an allotment of such State un- der paragraph (2) of subsection (a) be added to an allotment of such State under paragraph (1) of such subsection for grants for the construction of public or other nonprofit hospitals and pub- lic health centers and upon simultaneous certification to him by the State agency in such State to the effect that the need for new public or other nonprofit hospitals and public health centers is substantially greater than the need for modernization of fa- cilities referred to in paragraph (a) or (b) of section 601, shall promptly (but after application of subsection (b) of this section) adjust the allotments of such State in accordance with such request and shall notify the State agency; except that not more than the following portions of allotments of a State under para- graph (2) of subsection (a) may be so added (under this para- graph) to allotments of such State under paragraph (1) of such subsection: — A-89 — “(A) in the case of an allotment under paragraph (2) of subsection (a) for the fiscal year ending June 30, 1966, one-half of such allotment; “(B) in the case of an allotment thereunder for the fiscal year ending June 30, 1967, three-sevenths of such allot- ment; “(C) in the case of an allotment thereunder for the fiscal year ending June 30, 1968, two-fifths of such allotment; and “(D) in the case of an allotment thereunder for the fiscal year ending June 30, 1969, five-elevenths of such allot- ment. “(3) After adjustment of allotments of any State as provided in paragraph (1) or (2) of this subsection, the allotments as so adjusted shall be deemed to be the State’s allotments under this section. “(f) 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 grants for construction of any type of facility, or for modernization of facilities, 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 that type in such other State, or for modernization of a facility in such other State, as the case may be. If it is found by the Surgeon General (or, in the case of a rehabilitation facility, by the Surgeon General and the Sec- retary) that construction or modernization 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 ot the purposes of this title, 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. —_— “General regulations “Sec. 603. The Surgeon General, with the approval of the Federal Hospital Council and the Secretary of Health, Education, and Welfare, shall by general regulations prescribe— “(a) the general manner in which the State agency shall determine the priority of projects based on the relative need of different areas lacking adequate facilities of various types for which assistance is available under this part, giving special consideration— “(1) in the case of projects for the construction of hospitals, to facilities serving rural communities and areas with relatively small financial resources, “(2) in the case of projects for the construction of rehabilitation facilities, to facilities operated in con- nection with a university teaching hospital which will provide an integrated program of medical, psycho- logical, social and vocational evaluation and services under competent supervision; “(3) in the case of projects for modernization of facilities, to facilities serving densely populated areas, and “(4) to the extent deemed feasible by the State agency, to hospital facilities which will include new or expanded facilities for nurse training; “(b) general standards of construction and equipment for facilities of different classes and in different types of loca- tion, for which assistance is available under this part; “(c) criteria for determining needs for general hospital and long-term care beds, and needs for hospitals and other facilities for which aid under this part is available, and for —_* developing plans for the distribution of such beds and facilities; “(d) criteria for determining the extent to which existing facilities, for which aid under this part is available, are in need of modernization; and “(e) that the State plan shall provide for adequate hospitals, and other facilities for which aid under this part is available, for all persons residing in the State, and ade- quate hospitals (and such other facilities) to furnish needed services for persons unable to pay therefor. Such regula- tions may also require that before approval of an applica- tion for a project is recommended by a State agency to the Surgeon General for approval under this part, assurance shall be received by the State from the applicant that (1) the facility or portion thereof to be constructed or modernized will be made available to all persons residing in the territorial area of the applicant; and (2) there will be made available in the facility or portion thereof to be con- structed or modernized a reasonable volume of services to persons unable to pay therefor, but an exception shall be made if such a requirement is not feasible from a financial viewpoint. “State plans “Sec. 604. (a) Any State desiring to participate in this part may submit a State plan. Such 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) will have au- — A-92 — thority to carry out such plan in conformity with this part; “(3) provide for the designation of a State advisory coun- cil which shall include representatives of nongovernmental organizations or groups, and of public agencies, concerned with the operation, construction, or utilization of hospital or other facilities for diagnosis, prevention, or treatment of illness or disease, or for provision of rehabilitation services, and an equal number of representatives of con- sumers familiar with the need for the services provided by such facilities, to consult with the State agency in carrying out the plan, and provide, if such council does not include any representatives of nongovernmental organizations or groups, or State agencies, concerned with rehabilitation, for consultation with organizations, groups, and State agencies so concerned; (4) set forth, in accordance with criteria established in regulations prescribed under section 603 and on the basis of a statewide inventory of existing facilities, a survey of need, and (except to the extent provided by or pursuant to such regulations) community, area, or regional plans— (A) the number of general hospital beds and long- term care beds, and the number and types of hospital facilities and facilities for long-term care, needed to provide adequate facilities for inpatient care of people residing in the State, and a plan for the distribution of such beds and facilities in service areas throughout the State; “(B) the public health centers needed to provide adequate public health services for people residing in the State, and a plan for the distribution of sucn centers throughout the State; “(C) the diagnostic or treatment centers needed to provide adequate diagnostic or treatment services to — A-93 — ambulatory patients residing in the State, and a plan for distribution of such centers throughout the State; “(D) the rehabilitation facilities needed to assure adequate rehabilitation services for disabled persons residing in the State, and a plan for distribution of such facilities throughout the State; and “(E) effective January 1, 1966, the extent to which existing facilities referred to in section 601(a) or (b) in the State are in need of modernization; “(5) set forth a construction and modernization program conforming to the provisions set forth pursuant to para- graph (4) and regulations prescribed under section 603 and providing for construction or modernization of the hos- pital or long-term care facilities, public health centers, diagnostic or treatment centers, and rehabilitation facilities which are needed, as determined under the provisions so set forth pursuant to paragraph (4); “(6) set forth, with respect to each of such types of medical facilities, the relative need, determined in accord- ance with regulations prescribed under section 603, for projects for facilities of that type, and provide for the con- struction or modernization, insofar as financial resources available therefor and for maintenance and operation make possible, in the order of such relative need; (7) provide minimum standards (to be fixed in the dis- cretion of the State) for the maintenance and operation of facilities providing inpatient care which receive aid under this part and, effective July 1, 1966, provide for enforce- ment of such standards with respect to projects approved by the Surgeon General under this part after June 30, 1964; “(8) provide such methods of administration of the State plan, including methods relating to the establishment and — A-94 — maintenance of personnel 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 meth- ods), as are found by the Surgeon General to be necessary for the proper and efficient operation of the plan; “(9) provide for affording to every applicant for a con- struction or modernization project an opportunity for a hearing before the State agency; “(10) provide that the State agency will make such re- ports, in such form and containing such information, as the Surgeon General may from tiie to time reasonably require, and will keep such records and afford such access thereto as the Surgeon General may find necessary to assure the correctness and verification of such reports; “(11) provide that the Comptroller General of the United States or his duly authorized representatives shall have access for the purpose of audit and examination to the records specified in paragraph (10); and “(12) provide that the State agency will from time to time, but not less often than annually, review its State plan 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 modifica- tion complies with the provisions of such subsection, the Surgeon Genera! shall thereupon approve such plan or modification. — A-95 — “Approval of projects for construction or modernization “Sec. 605. (a) For each project pursuant to a State plan ap- proved 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. If two or more such agencies join in the project, the application may be filed by one or more of such agencies. Such application shall set forth— “(1) a description of the site for such project; ‘“(2) plans and specifications therefor, in accordance with regulations prescribed under section 603; “(3) reasonable assurance that title to such site is or will be vested in one or more of the agencies filing the applica- tion or in a public or other nonprofit agency which is to operate the facility on completion of the project; “(4) reasonable assurance that adequate financial sup- port will be available for the completion of the project and for its maintenance and operation when completed; “(S) reasonable assurance that all laborers and mechan- ics employed by contractors or subcontractors in the per- formance of construction or modernization on the project will be paid wages at rates not less than those prevailing on similar work in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, as amended (40 U.S.C. 276a—276a-5); and the Secretary of Labor shall have with respect to the labor standards speci- fied in this paragraph the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (15 F.R. 3176; 5 U.S.C. 1332-15) 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. —_ye “(b) The Surgeon General shall approve such application if sufficient funds to pay the Federal share of the cost of such project are available from the appropriate allotment to the State, and if the Surgeon General finds (1) that the application con- tains such reasgfiable assurance as to title, financial support, and payment of prevailing rates of wages; (2) that the plans and specifications are in accord with the regulations prescribed pur- suant to section 603; (3) that the application is in conformity with the State plan approved under section 604 and contains an assurance that in the operation of the project there will be com- pliance with the applicable requirements of the regulations prescribed under section 603(e), and with State standards for operation and maintenance; and (4) that the application has been approved and recommended by the State agency and is entitled to priority over other projects within the State in ac- cordance with the regulations prescribed pursuant to section 603(a). Notwithstanding the preceding sentence, the Surgeon General may approve such an application for a project for con- struction or modernization of a rehabilitation facility only if it is also approved by the Secretary of Health, Education, and Wel- fare. “(c) No application shall be disapproved until the Surgeon General has afforded the State agency an opportunity for a hearing. “(d) Amendment of any approved application shall be subject to approval in the same manner as an original application. “(e) Notwithstanding any other provision of this title, no ap- plication for a diagnostic or treatment center shail be approved under this section unless the applicant is (1) a State, political subdivision, or public agency, or (2) a corporation or associa- tion which owns and operates a nonprofit hospital (as defined in section 625). — A-97 — “Payments for construction or modernization “Sec. 606. (a) Upon certification to the Surgeon General 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 allot- ment of such State, except that (1) if the State is not authorized by law to make payments to the applicant, or if the State so requests, the payment shall be made directly to the applicant, (2) if the Surgeon General, after investigation or otherwise, has reason to believe that any act (or failure to act) has occurred requiring action pursuant to section 607, 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, pend- ing 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 ap- proved as provided in section 605 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 ap- proved. “(c) (1) At the request of any State, a portion of any allotment or allotments of such State under this part shall be available to pay one-half (or such smaller share as the State may request) of the expenditures found necessary by the Surgeon General for the proper and efficient administration during such year of the State plan approved under this part; except that not more than 2 per centum of the total of the allotments of such State for a year, or $50,000, whichever is less, shall be available for such — A-98 — purpose for such year. Payments of amounts due under this paragraph may be made in advance or by way of reimbursement, and in such installments, as the Surgeon General may determine. “(2) Any amount paid under paragraph (1) to any State for any fiscal year shall be paid on condition that there shall be ex- pended from State sources for such year for administration of the State plan approved under this part not less than the total amount expended for such purposes from such sources during the fiscal year ending June 30, 1964. “Withholding of Payments “Sec. 607. Whenever the Surgeon General, after reasonable notice and opportunity for hearing to the State agency desig- nated as provided in section 604(a) (1), finds— “(a) that the State agency is not complying substantially with the provisions required by section 604 to be included in its State plan; or “(b) that any assurance required to be given in an appli- cation filed under section 605 is not being or cannot be carried out; or “(c) that there is a substantial failure to carry out plans and specifications approved by the Surgeon General under section 605; or “(d) that adequate State funds are not being provided annually for the direct administration of the State plan, the Surgeon General may forthwith notify the State agency that— “(e) no further payments will be made to the State under this part, or “(f) no further payments will be made from the allot- ments of such State from appropriations under any one or — A-99 — more subparagraphs or paragraphs of section 601, or for any project or projects, designated by the Surgeon General as being affected by the action or inaction referred to in paragraph (a), (b), (c), or (d) of this section, 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, further payments may be withheld, in whole or in part, until there is no longer any failure to comply (or carry out the assurance or plans and specifications or pro- vide adequate State funds, as the case may be) or, if such com- pliance (or 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. 608. (a) If the Surgeon General refuses to approve any application for a project submitted under section 605 or section 610, the State agency through which such application was sub- mitted, or if any State is dissatisfied with his action under section 607 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 Surgeon General, or any officer designated by him for that purpose. The Surgeon General shall thereupon 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 jurisdiction to affirm the action of the Surgeon General or to set it aside, in whole or in part, temporarily or permanently, but until the filing of the record, the Surgeon General may modify or set aside his order. — A-100 — “(b) The findings of the Surgeon General 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 Sur- geon General to take further evidence, and the Surgeon General 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. “(c) The judgment of the court affirming or setting aside, in whole or in part, any action of the Surgeon General 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 proceed- ings under this section shall not, unless so specifically ordered by the court, operate as a stay of the Surgeon General's action. “Recovery “Sec. 609. If any facility with respect to which funds have been paid under section 606 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 section 605, or (2) which is not approved as a trans- feree by the State agency designated pursuant to section 604, or its successor, or “(b) cease to be a public health center or a public or other nonprofit hospital, diagnostic or treatment center, facility for long-term care, or rehabilitation facility, unless the Surgeon General determines, in accordance with regu- lations, that there is good cause for releasing the applicant or other owner from this obligation, — A-101 — 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 public or nonprofit, from the owners thereof) an amount bearing the same ratio to the then value (as deter- mined 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 of the Federal participation bore to the cost of the construction or moderniza- tion under such project or projects. Such right of recovery shall not constitute a lien upon said facility prior to judgment. “Loans for Construction or Modernization of Hospitals and Other Medical Facilities “Sec. 610. (a) In order further to assist the States in carrying out the purposes of this title, the Surgeon General is 2uthorized to make a loan of funds to the applicant for any project for construction or modernization which meets all of the conditions specified for a grant under this part. “(b) Except as provided in this section, an application for a loan with respect to any project under this part shall be sub- mitted, and shall be approved by the Surgeon General, in ac- cordance with the same procedures and subject to the same limitations and conditions as would be applicable to the making of a grant under this part for such project. Any such application may be approved in any fiscal year only if sufficient funds are available from the allotment for the type of project involved. All loans under this section shall be paid directly to the applicant. “(c) (1) The amount of a loan under this part shall not exceed an amount equal to the Federal share of the estimated cost of construction or modernization under the project. Where a loan and a grant are made under this part with respect to the same project, the aggregate amount of such loan and such grant shall — A-102 — not exceed an amount equal to the Federal share of the estimated cost of construction or modernization under the project. Each loan shall bear interest at the rate arrived at by adding one- quarter of 1 per centum per annum to the rate which the Secre- tary of the Treasury determines to be equal to the current average yield on all outstanding marketable obligations of the United States as of the last day of the month preceding the date the application for the loan is approved and by adjusting the result so obtained to the nearest one-eighth of 1 per centum. _. Each loan made under this part shall mature not more than forty years after the date on which such loan is made, except that nothing in this part shall prohibit the payment of all or part of the loan at any time prior to the maturity date. In addi- tion to the terms and conditions provided for, each loan under this part shall be made subject to such terms, conditions, and covenants relating to repayment of principal, payment of inter- est, and other matters as may be agreed upon by the applicant and the Surgeon General. “(2) The Surgeon General may enter into agreements modify- ing any of the terms and conditions of a loan made under this part whenever he determines such action is necessary to protect the financial interest of the United States. “(3) If, at any time before a loan for a project has been repaid in full, any of the events specified in clause (a) or clause (b) of section 609 occurs with respect to such project, the unpaid balance of the loan shall become immediately due and payable by the applicant, and any transferee of the facility shall be liable to the United States for such repayment. “(d) Any loan under this part shall be made out of the allot- ment from which a grant for the project concerned would be made. Payments of interest and repayments of principal on loans under this part shall be deposited in the Treasury as mis- cellaneous receipts. — A-103 — “Part B—General “Federal hospital council and advisory committees “Sec. 621. (a) In administering this title, the Surgeon General shall consult with a Federal Hospital Council consisting of the Surgeon General, who shall serve as Chairman ex officio, and twelve members appointed by the Secretary of Health, Educa- tion, and Welfare. Six of the twelve appointed members shall be penser us who are outstanding in fields pertaining to medical facility aud health activities, and three of these six shall be au- thorities in matters relating to the operation of hospitals or other medical facilities, one of them shall be an authority in matters relating to the mentally retarded, and one of them shall be an authority in matters relating to mental health, and the other six members shall be appointed to represent the consumers of serv- ices provided by such facilities and shall be persons familiar with the need for such services in urban or rural areas. “(b) Each appointed member shall hold office for a term of four years, except that any member appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor was appointed shall be appointed for the remainder of such term. An appointed member shall not be eligible to serve continuously for more than two terms (whether beginning before or after enactment of this section) but shall be eligible for reappointment if he has not served immediately preceding his reappointment. “(c) The Council shall meet as frequently as the Surgeon General deems necessary, but not less than once each year. Upon request by three or more members, it shall be the duty of the Surgeon General to call a meeting of the Council. “(d) The Council is authorized to appoint such special ad- visory or technical committees as may be useful in carrying out its functions. — A-104 — “(e) Appointed Council members and members of advisory or technical committees, while serving on business of the Coun- cil, shall be entitled to receive compensation at rates fixed by the Secretary of Health, Education, and Welfare, but not exceed- ing $75 per day, including travel time, and, while so serving away from their places of residence, they may be allowed travel expenses, including per diem in liev of subsistence, as author- ized by section 5 of the Administrative Expenses Act of 1946 (5 U.S.C. 73b-2) for persons in the Government service em- ployed intermittently. “Conference of state agencies “Sec. 622. Whenever in his opinion the purposes of this title would be promoted by a conference, the Surgeon General may invite representatives of as many State agencies, designated in accordance with section 604, to confer as he deems necessary or proper. A conference of the representatives of all such State agencies shall be called annually by the Surgeon General. Upon the application of five or more of such State agencies, it shall be the duty of the Surgeon General to call a conference of repre- sentatives of all State agencies joining in the request. “State control of operations “Sec, 623. Except as otherwise specifically provided, nothing in this title shall be construed as conferring on any Federal of- ficer 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. “Studies and demonstrations relating to coordinated use of hospital facilities “Sec. 624. (a) The Surgeon General is authorized to conduct research, experiments, and demonstrations relating to the ef- — A-105 — fective development and utilization of services, facilities, and resources of hospitals or other medical facilities and, after con- sultation with the Federal Hospital Council, to make grants-in- aid to States, political subdivisions, universities, hospitals, and other public and nonprofit private institutions or organizations for projects for the conduct of research, experiments, or demon- strations relating to the development, utilization, and coordina- tion of services, facilities, and resources of hospitals or other medical facilities, agencies, or institutions, and including the construction of units of hospitals or other medical facilities which involve experimental architectural designs or functional layout, the efficiency or economy of which can be tested and evaluated, or the demonstration thereof, and projects for ac- quisition of experimental or demonstration equipment for use in connection with hospitals or other medical facilities. Any award for any such project made from an appropriation under this section for any fiscal year may include such amounts as the Surgeon General determines to be necessary for succeeding fiscal years for completion of the Federal participation in the project as approved by the Surgeon General. Payments of any such grant may be made in advance or by way of reimburse- ment, and in such installments, as may be determined by the Surgeon General; and shall be made on such conditions as the Surgeon General finds necessary to carry out the purposes of this section. A grant under this section with respect to any project for construction of a facility or for acquisition of equip- ment (1) may not exceed $500,000, and (2) except where the Surgeon General determines that unusual circumstances make a larger percentage necessary in order to effectuate the purposes of this section, may not exceed 50 per centum of so much of the cost of such facility or such equipment as the Surgeon Gen- eral determines is reasonably attributable to experimental or demonstration purposes. The provisions of clause (5) of the third sentence of subsection (a) of section 605 and any other provisions of such section which the Surgeon General deems appropriate shall be applicable, along with such other condi- — A-106 — tions as the Surgeon General may determine, to grants under this section for projects for construction or for acquisition of equipment. There is authorized to be appropriated not to ex- ceed $10,000,000 for any fiscal year to carry out the provisions of this section. “(b) If, within twenty years after completion of any construc- tion for which funds have been paid under this section— “(1) the applicant or other owner of the facility shall cease to be a public or other nonprofit institution or organi- zation, or “(2) the facility shall cease to be used for the purposes for which it was constructed or for the provision of hos- pital or other services for which construction projects may be approved under this title (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), the United States shall be entitled to recover from the applicant or other owner of the facility an 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 dis- trict in which such facility is situated) of the facility, as the amount of the Federal participation bore to the cost of construc- tion of such facility. Such right of recovery shall not constitute a lien on such facility prior to judgment. “Definitions “Sec. 625. For the 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. — A-107 — “(b) 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, determined as follows: “(1) With respect to projects for which grants are made from allotments made from appropriations under paragraph (b) of section 601, the Federal share shall be whichever of the following the State elects: “(A) the share determined by the State agency in accordance with standards, included in the State plan, which provide equitably for variations between proj- ects on the basis of objective criteria related to the economic status of areas and, if the State so elects, such other factor or factors as may be appropriate and be permitted by regulations, except that such standards may not provide for a Federal share of more than 66%5 per centum, or less than 33% per centum, or “(B) the amount (not less than 33% per centum and not more than either 6635 per centum or the State's allotment percentage, whichever is lower) es- tablished by the State agency for all projects in the State; “(2) With respect to projects for which grants are made from allotments made from appropriations under paragraph (a) of section 601, the Federal share shall be whichever of the following the State elects: “(A) the share determined by the StaféYagency in accordance with the standards, included in the State plan, and meeting the requirements set forth in sub- paragraph (A) of paragraph (1), “(B) the amount (not less than 334% per centum and not more than either 6644 per centum or the — A-108 — State's allotment percentage, whichever is lower) es- tablished by the State agency for all projects in the State, or “(C) 50 per centum of the cost of construction of the project. The State agency shall, prior to the approval by it, under the State plan approved under part A, of the first project in the State during any fiscal year, give written notification to the Surgeon General of the Federal share which it has elected pur- suant to paragraph (1), and the Federal share which it has elected pursuant to paragraph (2), of this subsection for projects in such State to be approved by the Surgeon General during such fiscal year, and such Federal share or shares for projects in such State approved by the Surgeon General during such fiscal year shal! not be changed after approval of such first project by the State. “(c) The term ‘hospital’ includes general, tuberculosis, and other types of hospitals, and related facilities, such as labora- tories, out-patient departments, nurses’ home and training fa- cilities, and central service facilities operated in connection with hospitals, but does not include any hospital furnishing primarily domiciliary care. “(d) The term ‘public health center’ means a publicly owned facility for the provision of public health services, including related publicly owned facilities such as laboratories, clinics, and administrative offices operated in connection with such a facility. “(e) The term ‘nonprofit’ as applied to any facility means a facility 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 share- holder or individual. — A-109 — “(f) The term ‘diagnostic or treatment center’ means a facility for the diagnosis or diagnosis and treatment of ambulatory patients— “(1) which is operated in connection with a hospital, or “(2) in which patient care is under the professional su- pervision of persons licensed to practice medicine or sur- gery in the State, or, in the case of dental diagnosis or treat- ment, under the professional supervision of persons licensed to practice dentistry in the State. “(g) The term ‘rehabilitation facility’ means a facility which is operated for the primary purpose of assisting in the rehabilitation of disabled persons through an integrated program of— “(1) medical evaluation and services, and “(2) psychological, social, or vocational evaluation and services, under competent professional supervision, and in the case of which— “(3) the major portion of the required evaluation and services is furnished within the facility; and “(4) either (A) the facility is operated in connection with a hospital, or (B) all medical and related health services are prescribed by, or are under the general direction of, persons licensed to practice medimsne or surgery in the State. “(h) The term ‘facility for long-term care’ means a facility providing in-patient care for convalescent or chronic disease patients who require skilled nursing care and related medical services— e“(1) which is a hospital (other than a hospital primarily for the care and treatment of mentally ill or tuberculous patients) or is operated in connection with a hospital, or — A-110 — “(2) in which such nursing care and medical services are prescribed by, or are performed under the general di- rection of, persons licensed to practice medicine or sur- gery in the State. “(i) The term ‘construction’ includes construction of new build- ings, expansion, remodeling, and alteration of existing buildings, and initial equipment of any such buildings (including medical transportation facilities); including architects’ fees, but exclud- ing the cost of off-site improvements and, except with respect to public health centers, the cost of the acquisition of land. “(j) The term ‘cost’ as applied to construction or moderniza- tion means the amount found by the Surgeon General to be necessary for construction and modernization respectively, under a project, except that such term, as applied to a project for modernization of a facility for which a grant or loan is to be made from an allotment under section 602(a) (2), does not in- clude any amount found by the Surgeon General to be attribu- table to expansion of the bed capacity of such facility. “(k) The term ‘modernization’ includes alteration, major re- pair (to the extent permitted by regulations), remodeling, re- placement, and renovation of existing buildings (including initial equipment thereof), and replacement of obsolete, built-in (as de- termined in accordance with regulations) equipment of existing buildings. “(l) 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 operation of the project.” (b) The amendment made by subsection (a) shall become ef- fective upon the date of enactment of this Act, except that— — A-lll — (1) all applications approved by the Surgeon General under title VI of the Public Health Service Act prior to such date, and allotments of sums appropriated prior to such date, shall be governed by the provisions of such title VI in effect prior to such date: (2) allotment percentages promulgated by the Surgeon General under such title VI during 1962 shall continue to be effective for purposes of such title as amended by this Act for the fiscal year ending June 30, 1965: (3) the terms of members of the Federal Hospital Council who are serving on such Council prior to such date shall expire on the date they would have expired had this Act not been enacted; (4) the provisions of the fourth sentence of section 636 (a) of the Public Health Service Act, as in effect prior to the enactment of this Act, shall apply in lieu of the fourth sentence of section 624(a) of the Public Health Service Act, as amended by this Act, in the case of any project for con- struction of a facility or for acquisition of equipment with respect to which a grant for any part thereof or for planning such construction or equipment was made prior to the en- actment of this Act; (5) no application with respect to a project for moderni- zation of any facility in any State may be approved by the Surgeon General, for purposes of receiving funds from an allotment under section 602(a) (2) of the Public Health Service Act, as amended by this Act, before July 1, 1965, or before such State has had a State plan approved by the Surgeon General as meeting the requirements of section 604(a) (4) (E) as well as the other requirements of section 604 of such Act as so amended. Approved August 18, 1964. — A-112 — HEALTH PROGRAMS EXTENSION ACT OF 1973 87 STAT. 91 An Act io extend through fiscal year 1974 certain expiring appropriations authorizations in the Public Health Serv- ice Act, the Community Mental Health Centers Act, and the Developmental Disabilities Services and Facilities Con- struction Act, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That: Short Title Section 1. This Act may be cited as the “Health Programs Extension Act of 1973”. Sec. 401. (a) Section 601 of the Medical Facilities Construc- tion and Modernization Amendments of 1970 is amended by striking out “1973” and inserting in lieu thereof “1974”. (b) The receipt of any grant, contract, loan, or loan guaran- tee under the Public Health Service Act, the Community Men- tal Health Centers Act, or the Developmental Disabilities Serv- ices and Facilities Construction Act by any individual or entity does not authorize any court or any public official or other public authority to require— (1) such individual to perform or assist in the perform- ance of any sterilization procedure or abortion if his per- formance or assistance in the performance of such pro- cedure or abortion would be contrary to his religious be- liefs or moral convictions; or — A-113 — (2) such entity to— (A) make its facilities available for the perform- ance of any sterilization procedure or abortion if the performance of such procedure or abortion in such facilities is prohibited by the entity on the basis of religious beliefs or moral convicweons, or (B) provide any personnel for the performance or assistance in the performance of any sterilization pro- cedure or abortion if the performance or assistance in the performance of such procedure or abortion by such personnel would be contrary to the religious be- liefs or moral convictions of such personnel. (c) No entity which receives a grant, contract, loan, or loan guarantee under the Public Health Service Act, the Community Mental Health Centers Act, or the Developmental Disabilities Services and Facilities Construction Act after the date of en- actment of this Act may— (i) discriminate in the employment, promotion, or ter- mination of employment of any physician or other health care personnel, or P. (2) discriminate in the extension of staff or other privi- leges to any physician or other health care personnel, because he performed or assisted in the performance of a law- ful sterilization procedure or abortion, because he refused to perform or assist in the performance of such a procedure or abortion on the grounds that his performance or assistance in the performance of the procedure or abortion would be con- trary to his religious beliefs or moral convictions, or because of his religious beliefs or moral convictions respecting steriliza- tion procedures or abortions. Approved June 18, 1973. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_0256%3A1. Public record. Not legal advice.