120 
(d) PAYMENT FREQUENCY.—Service providers under 
this Act shall be paid at such time or times as the National 
Health Board finds appropriate. 
(e) ALLOCATION OF SUPPLEMENTARY PAYMENTS.— 
Before and during any fiscal year, supplementary funds 
may be allocated to any Service provider if the National 
Health Board finds that such funds are required by events 
occurring or information acquired after the initial alloca-
tions were made. 
(f) USE OF FUNDS.—Service providers may retain 
funds received from the National Health Board for 2 years 
following the receipt of such funds. Any funds which are 
unexpended after such time shall be returned to the Na-
tional Health Board for deposit in the Trust Fund. 
SEC. 534. ANNUAL STATEMENT, RECORDS, AND AUDITS. 
(a) ANNUAL STATEMENT.—Each Service provider 
shall prepare annually and transmit to the National 
Health Board a statement which shall accurately show its 
financial operations and for the year for which such state-
ment is prepared. 
(b) RECORDKEEPING.—Each Service provider shall 
keep such records as determined to be necessary for the 
purposes of this Act, including for the facilitation of au-
dits. 
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(c) AUDITS.—The National Health Board and the 
Comptroller General of the United States, or their duly 
authorized representatives, shall, for the purpose of au-
dits, have access to any books, documents, papers, and 
records which in their opinion are related or pertinent to 
the operation of the Service. 
Subtitle E—General Provisions 
SEC. 541. ISSUANCE OF OBLIGATIONS. 
(a) BORROWING AUTHORITY.—The National Health 
Board is authorized to borrow money and to issue and 
sell such obligations as it determines necessary to carry 
out the purposes of this Act, but only in such amounts 
as may be specified from time to time in appropriation 
Acts. The aggregate amount of any such obligations out-
standing 
at 
any 
one 
time 
shall 
not 
exceed 
$10,000,000,000. 
(b) PLEDGING OF ASSETS.—The National Health 
Board may pledge the assets of the Trust Fund and 
pledge and use its revenues and receipts for the payment 
of the principal of or interest on such obligations, for the 
purchase or redemption thereof, and for other purposes 
incidental thereto. The National Health Board is author-
ized to enter into binding covenants with the holders of 
such obligations, and with the trustee, if any, under any 
agreement entered into in connection with the issuance 
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thereof with respect to the establishment of reserve, sink-
ing, and other funds, stipulations concerning the issuance 
of obligations or the execution of leases or lease purchases 
relating to properties of the Service and such other mat-
ters as the National Health Board deems necessary or de-
sirable to enhance the marketability of such obligations. 
(c) FORM OF OBLIGATIONS.—Obligations issued by 
the Service under this section— 
(1) shall be in such forms and denominations; 
(2) shall be sold at such times and in such 
amounts; 
(3) shall mature at such time or times; 
(4) shall be sold at such prices; 
(5) shall bear such rates of interest; 
(6) may be redeemable before maturity in such 
manner, at such times, and at such redemption pre-
miums; 
(7) may be entitled to such relative priorities of 
claim on the assets of the Service with respect to 
principal and interest payments; and 
(8) shall be subject to other terms and condi-
tions, as the National Health Board determines. 
(d) CHARACTER
OF
OBLIGATIONS.—Obligations 
issued by the Service under this section shall— 
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(1) be negotiable or nonnegotiable and bearer 
or registered instruments, as specified therein and in 
any indenture or covenant relating thereto; 
(2) contain a recital that they are issued under 
this section, and such recital shall be conclusive evi-
dence of the regularity of the issuance and sale of 
such obligations and of their validity; 
(3) be lawful investments and may be accepted 
as security for all fiduciary, trust, and public funds, 
the investment or deposit of which shall be under 
the authority or control of any officer or agency of 
the Government of the United States, and the Sec-
retary of the Treasury or any other officer or agency 
having authority over or control of any such fidu-
ciary, trust, or public funds, may at any time sell 
any of the obligations of the Service acquired under 
this section; 
(4) be exempt both as to principal and interest 
from all taxation now or hereafter imposed by any 
State or local taxing authority except estate, inherit-
ance, and gift taxes; and 
(5) not be obligations of, nor shall payment of 
the principal thereof or interest thereon be guaran-
teed by, the Government of the United States, ex-
cept as provided in subsection (g). 
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(e) CONSULTATION WITH TREASURY.—At least 15 
days before selling any issue of obligations, the National 
Health Board shall advise the Secretary of the Treasury 
of the amount, proposed date of sale, maturities, terms 
and conditions, and expected maximum rates of interest 
of the proposed issue in appropriate detail and shall con-
sult with him or his designee thereon. The Secretary may 
elect to purchase such obligations under such terms, in-
cluding rates of interest, as he and the National Health 
Board may agree, but at a rate of yield no less than the 
prevailing yield on outstanding marketable Treasury secu-
rities of comparable maturity, as determined by the Sec-
retary. If the Secretary does not purchase such obliga-
tions, the National Health Board may proceed to issue 
and sell them to a party or parties other than the Sec-
retary upon notice to the Secretary and upon consultation 
as to the date of issuance, maximum rates of interest, and 
other terms and conditions. 
(f) PURCHASE
OF OBLIGATIONS.—Subject to the 
conditions of subsection (e), the National Health Board 
may require the Secretary of the Treasury to purchase ob-
ligations of the Service in such amounts as will not cause 
the holding by the Secretary of the Treasury resulting 
from such required purchases to exceed $2,000,000,000 
at any one time. This subsection shall not be construed 
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125 
as limiting the authority of the Secretary to purchase obli-
gations of the Service in excess of such amount. 
(g) FULL FAITH
AND CREDIT.—Notwithstanding 
subsection (d)(5), obligations issued by the Service shall 
be obligations of the Government of the United States, 
and payment of principal and interest thereon shall be 
fully guaranteed by the Government of the United States, 
such guaranty being expressed on the face thereof, if and 
to the extent that— 
(1) the National Health Board requests the 
Secretary of the Treasury to pledge the full faith 
and credit of the Government of the United States 
for the payment of principal and interest thereon; 
and 
(2) the Secretary, in his discretion, determines 
that it would be in the public interest to do so. 
(h) PUBLIC DEBT TRANSACTION.—For the purpose 
of any purchase of the obligations of the Service, the Sec-
retary of the Treasury is authorized to use as a public 
debt transaction the proceeds from the sale of any securi-
ties issued under the Second Liberty Bond Act, as now 
or hereafter in force, and the purposes for which securities 
may be issued under the Second Liberty Bond Act, as now 
or hereafter in force, are extended to include any pur-
chases of the obligations of the Service under this subtitle. 
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The Secretary of the Treasury may, at any time, sell any 
of the obligations of the Service acquired by him under 
this chapter. All redemptions, purchases, and sales by the 
Secretary of the obligations of the Service shall be treated 
as public debt transactions of the United States. 
SEC. 542. DEFINITIONS. 
For purposes of this title: 
(1) OPERATING EXPENSES.—The term ‘‘oper-
ating expenses’’ means the cost of providing, plan-
ning, operating, and maintaining services, facilities, 
programs, and boards (other than those associated 
with research) established or furnished under this 
Act, and of capital buildings and equipment (other 
than those associated with research) costing less 
than $100,000, except for funds associated with the 
conduct of preventive health measures and research. 
(2) CAPITAL EXPENSES.—The term ‘‘capital ex-
penses’’ means expenses which under generally ac-
cepted accounting principles are not properly charge-
able as expenses of operation and maintenance, 
which exceed $100,000, and which are not associ-
ated primarily with the conduct of research. 
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127 
TITLE VI—MISCELLANEOUS 
PROVISIONS 
SEC. 601. EFFECTIVE DATE OF HEALTH SERVICES. 
The effective date of health services under this Act 
is January 1 of the fourth calendar year after the year 
in which this Act is enacted. 
SEC. 602. REPEAL OF PROVISIONS. 
(a) IN GENERAL.—Effective on the effective date of 
health services, the following provisions of law are re-
pealed: 
(1) The Public Health Service Act, except for— 
(A) title I (relating to short title and defi-
nitions), parts F and G of title III (relating to 
licensing and quarantine authority), and title 
XIV (relating to safety of public water sys-
tems); and 
(B) titles VII and VIII, which shall remain 
effective, during the period beginning on such 
effective date and ending on the date occurring 
4 years after such effective date, with respect to 
the provision of assistance to educational insti-
tutions, and students thereof, in areas which 
have not established health team schools under 
subtitle A of title III of this Act. 
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(2) Titles V, XVIII, XIX, and XXI of the So-
cial Security Act (relating to the maternal and child 
health and crippled children’s services, Medicare, 
Medicaid, and State children’s health insurance pro-
gram); part B of title XI of such Act (relating to 
professional standards review); sections 226, 1121 
through 1124, and 1126 of such Act (relating to en-
titlement to hospital insurance benefits, uniform 
health reporting systems, limitation on Federal par-
ticipation for capital expenditures, program for de-
termining qualification for certain health care per-
sonnel, disclosure of ownership and related informa-
tion, and disclosure of certain convictions); and so 
much of title XX of such Act (relating to grants to 
States for services) as provides for payments to 
States for health care and supplemental services. 
(3) Chapter 89 of title 5, United States Code 
(relating to health insurance for Federal employees). 
(4) Chapters 17, 73, and 81 and section 1506 
of title 38, United States Code (relating to medical 
benefits and programs relating to veterans). 
(5) Sections 1079 through 1083 and section 
1086 of title 10, United States Code (relating to the 
civilian health and medical program of the uni-
formed services). 
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(6) The Comprehensive Alcohol Abuse and Al-
coholism Prevention, Treatment, and Rehabilitation 
Act of 1970; the Comprehensive Alcohol Abuse and 
Alcoholism Prevention, Treatment, and Rehabilita-
tion Act Amendments of 1974; and section 4 of the 
Comprehensive Drug Abuse Prevention and Control 
Act of 1970 (relating to medical treatment of nar-
cotic addiction). 
(7) Public Law 83–568 (42 U.S.C. 2001– 
2004b) (relating to hospital and other health facili-
ties for Indians) and Public Law 85–151 (42 U.S.C. 
2005–2005f) (relating to community hospitals for 
Indians). 
(8) The District of Columbia Medical Facilities 
Construction Act of 1968 and the District of Colum-
bia Medical and Dental Manpower Act of 1970. 
(9) Sections 232 and 242 and title XI of the 
National Housing Act (relating to mortgage insur-
ance for nursing homes, hospitals, and group prac-
tice facilities). 
(10) The Mental Retardation Facilities and 
Community Mental Health Centers Construction Act 
of 1963. 
(11) The Family Planning Services and Popu-
lation Research Act of 1970. 
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(12) The National Arthritis Act of 1974 and 
the National Diabetes Mellitus Research and Edu-
cation Act. 
(13) Titles I and II and section 301 of the 
Lead-Based Paint Poisoning Prevention Act (42 
U.S.C. 4801, 4811, 4821) (relating to grant pro-
grams for lead-based paint poisoning prevention). 
(14) The Act of March 2, 1897 (21 U.S.C. 41– 
50) (relating to tea importation). 
(15) Subsection (e) of section 20 and section 22 
of the Occupational Safety and Health Act of 1970 
(relating to the National Institute for Occupational 
Safety and Health). 
(b) PREPARATION OF ADDITIONAL LIST.— 
(1) IN GENERAL.—Not later than three years 
after the date of enactment of this Act, the Presi-
dent shall prepare, in consultation with the appro-
priate National Health Board, and transmit to Con-
gress legislation— 
(A) to repeal or amend such provisions of 
law as are inconsistent with the purposes of this 
Act or the provision of health care and supple-
mental services by the Service under this Act; 
and 
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(B) to make such conforming and technical 
amendments in provisions of law as may be nec-
essary to properly effect the repeal of provisions 
described in subsection (a) and the repeal or 
amendment of provisions described in subpara-
graph (A) of this paragraph. 
(2) TRANSFER
AUTHORITY.—Such legislation 
shall include the transfers of such authority of the 
Secretary of Health and Human Services under the 
provisions of— 
(A) the Controlled Substances Act; 
(B) chapter 175 of title 28, United States 
Code (relating to civil commitment and rehabili-
tation of narcotics addicts); 
(C) chapter 314 of title 18, United States 
Code (relating to sentencing of narcotic addicts 
to commitment for treatment); 
(D) the Narcotic Addict Rehabilitation Act 
of 1966; 
(E) the Drug Abuse Office and Treatment 
Act of 1972; 
(F) the Occupational Safety and Health 
Act of 1970; 
(G) the Lead-Based Paint Poisoning Pre-
vention Act; 
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132 
(H) the Federal Cigarette Labeling and 
Advertising Act; 
(I) the Federal Food, Drug, and Cosmetic 
Act; 
(J) the Fair Packaging and Labeling Act; 
(K) the Act of March 4, 1923 (21 U.S.C. 
61–64) (relating to filled milk); 
(L) the Act of February 15, 1927 (21 
U.S.C. 141–149) (relating to milk importation); 
(M) the Federal Caustic Poison Act; 
(N) the Federal Coal Mine Health and 
Safety Act of 1969 (other than title IV there-
of); and 
(O) the Solid Waste Disposal Act, 
to the Service as the President determines, after 
consultation with the National Health Board, to be 
appropriate. 
(c) REVIEW OF PROGRAMS.— 
(1) IN GENERAL.—The National Health Board 
shall, immediately upon its initial appointment, and 
in consultation with the Secretary of Health and 
Human Services, review the programs conducted 
under the specified provisions of the Public Health 
Service Act and the other Acts described in sub-
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section (a) and shall determine how the Service shall 
carry out the purposes of such programs. 
(2) INITIAL REPORT.—Not later than one year 
after the effective date of health services, the Na-
tional Health Board shall report to the President 
and to the Congress on how the Service is carrying 
out the purposes of the programs authorized to be 
conducted under provisions of law which are re-
pealed by subsection (a) (other than paragraph 
(1)(B) thereof). 
(3) LATER REPORT.—Not later than 5 years 
after the effective date of health services, the Na-
tional Health Board shall report to the President 
and to the Congress on how the Service is carrying 
out the purposes of programs described in subsection 
(a)(1)(B). 
(d) CODIFICATION PROPOSAL.—Not later than 2 
years after the effective date of health services, the Na-
tional Health Board shall transmit to Congress a proposed 
codification of all the provisions of law which contain func-
tions that are transferred or relate to the Service. 
SEC. 603. TRANSITION PROVISIONS. 
(a) TRANSFER OF APPROPRIATIONS.—Amounts ap-
propriated to carry out the purposes of any provisions of 
law repealed by this Act and available on the effective date 
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of such repeal shall be transferred on such date to the 
Health Service Trust Fund (established under section 511 
of this Act). 
(b) TRANSFER OF PERSONNEL, ASSETS, ETC.—The 
President is authorized to transfer so much of the posi-
tions, personnel, assets, liabilities, contracts, property, and 
records employed, held, used, arising from, available to or 
made available in connection with the functions or pro-
grams repealed by this Act to the Service as may be 
agreed upon by the President and the National Health 
Board. 
(c) LAPSES OF OFFICES.—In the case where the au-
thority for the establishment of any office or agency, or 
all the functions of such office or agency, are repealed 
under section 602, such office or agency shall lapse. 
(d) APPLICATION OF AMENDMENTS.—The amend-
ments made by section 602— 
(1) shall not apply with respect to any contract 
entered into before the effective date of such amend-
ments, and 
(2) shall not affect (A) any right or obligation 
arising out of any matter occurring before the effec-
tive date of such amendments, or (B) any adminis-
trative or judicial proceeding (whether or not initi-
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135 
ated before that date) for the adjudication or en-
forcement of any such right or obligation. 
SEC. 604. AMENDMENT TO BUDGET AND ACCOUNTING ACT. 
(a) HEALTH SERVICE BUDGET.—Subsection (h) of 
section 1105 of title 31, United States Code, is amended 
to read as follows: 
‘‘(h) The Budget transmitted pursuant to subsection 
(a) shall set forth the items enumerated in paragraphs (4) 
through (9) and (12) of subsection (a) with respect to ex-
penditures from and appropriations to the Health Service 
Trust Fund (established under section 511 of the Jose-
phine Butler United States Health Service Act) separately 
from such items with respect to expenditures and appro-
priations relating to other operations of the Government.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply with respect to fiscal years be-
ginning more than 1 year after the date of enactment of 
this Act. 
SEC. 605. SEPARABILITY. 
If any provision of this Act, or the application of such 
provision to any person or circumstance, shall be held in-
valid, the remainder of this Act, or the application of such 
provision to persons or circumstances other than those as 
to which it is held invalid, shall not be affected thereby. 
Æ 
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