(iii) Safe, comfortable, and convenient
abortion services.
(iv) Counseling for women in conjunc-
tion with the provision of all gynecologic,
female contraceptive, and abortion services
and counseling for men on male fertility-
related services.
(2) VOLUNTARY.—The services described in
paragraph (1) shall be delivered without coercion or
harassment, with complete confidentiality, and with-
out prior approval of individuals other than the indi-
vidual receiving the services.
(3) ACCOMPANIMENT.—An individual shall be
permitted to be accompanied by a person of the indi-
vidual’s choice during the provision of the services
described in paragraph (1) to the extent this would
not significantly increase the medical risk to the in-
dividual.
(b) VOLUNTARY CONSENT.—No health care provider
may perform upon an individual a treatment or procedure
(other than a treatment or procedure required to preserve
the life of the individual) which could reasonably be ex-
pected to affect the individual’s capacity to reproduce chil-
dren, unless—
(1) the individual has given voluntary written
consent to the treatment or procedure after being
given complete information on the effect of the
treatment or procedure on the individual’s reproduc-
tive capacity, and on possible alternative treatments
and procedures, at least 30 days before beginning
the treatment or procedure, and
(2) the individual has, after such 30-day wait-
ing period, again given written consent to the per-
formance of the treatment or procedure, except that
in the case of a woman who has given initial written
consent to a sterilization she may be sterilized in
less than 30 days following such consent (but in no
case in less than 72 hours)—
(A) if she had given initial written consent
at least 30 days before her anticipated delivery
date, she delivers before the anticipated date,
and the sterilization is performed at the time of
delivery;
(B) if she undergoes emergency abdominal
surgery within the 30-day waiting period and
the sterilization is concurrent with the abdom-
inal surgery; or
(C) in the case of an elective sterilization
procedure, such as tubal ligation or vasectomy,
that is scheduled and performed separately
from the act of childbirth, where prior informed
consent is provided and the procedure is per-
formed at the next subsequent or any later
medical visit after informed consent is obtained.
(c) BREAST CANCER TREATMENT.—The National
Health Board shall insure that, before a mastectomy or
other breast cancer treatment is performed on a woman,
the woman shall be provided with complete information
on the complete range of medical options available for
treatment of her condition and the risks and side effects
of each option and an opportunity to consult individuals
of her choice, and shall have given voluntary written con-
sent to such procedure.
(d) BIRTHING
OPTIONS.—The National Health
Board shall provide that a woman giving birth to an infant
shall have the right to choose from a complete range of
childbirth options including—
(1) giving birth at home, in a birth center (if
available), or in a hospital;
(2) the presence during childbirth of a person
or persons of her choosing;
(3) the position for labor and delivery which she
chooses;
(4) caring for her infant at her bedside;
(5) feeding her infant according to the method
and schedule of her choice; and
(6) selecting the birth attendant of her own
choice.
She shall be provided with information on the benefits,
risks, and side effects of each option and an opportunity
to consult individuals and groups of her choosing for infor-
mation and assistance on these options.
TITLE III—HEALTH LABOR
FORCE
Subtitle A—Job Categories and
Certification
SEC. 301. EFFECT OF STATE LAW.
Notwithstanding any law of a State or political sub-
division to the contrary, the Service, acting in accordance
with the provisions of this Act, shall be the sole judge of
the qualifications of its employees.
SEC. 302. QUALIFICATIONS OF HEALTH WORKERS.
(a) CERTIFICATION OF COMPETENCE.—The National
Health Board shall establish procedures which will ensure
that, except in emergency situations, any work which is
classified under a job category established under this sub-
title is performed by a health worker who at the time of
such work was—
(1) certified (in accordance with this subtitle)
as competent to perform the work under such job
category, and
(2) authorized to perform such work by the em-
ployer of such worker.
(b) PERIODIC ASSESSMENTS.—There shall be peri-
odic review and assessment of the competency of such
workers to perform the work within their job category, and
opportunities for health workers to be assessed and cer-
tified with respect to skills required for advancement to
other job categories.
SEC. 303. ESTABLISHMENT OF JOB CATEGORIES AND CER-
TIFICATION STANDARDS.
(a) IN GENERAL.—
(1) CLASSIFICATION.—The National Health
Board shall establish such guidelines for the classi-
fication, certification, and employment of health
workers by job category as it determines to be
necessary—
(A) to ensure that health workers who per-
form work for the Service which requires spe-
cialized skills have demonstrated that they pos-
sess such skills,
(B) to expand the roles of health workers
to enable them to participate in health care de-
livery to the maximum extent consistent with
their skills, and
(C) to provide for affiliation of health
workers with health care facilities at the com-
munity, district, and regional levels.
These guidelines shall permit alternative approaches
to healing, and practitioners skilled in such ap-
proaches, when these approaches have not been dem-
onstrated to be injurious to health.
(2) CONSIDERATIONS.—In establishing guide-
lines under paragraph (1), the National Health
Board shall provide for (A) sufficient flexibility to
permit utilization of health workers most effectively
to meet the health needs of the region, and (B) suf-
ficient uniformity to permit mobility of health work-
ers among the regions.
(b) CERTIFICATION STANDARDS.—
(1) ESTABLISHMENT.—For each job category
(other than a job category determined by the Na-
tional Health Board to involve highly specialized
skills requiring advanced specialty training), the Na-
tional Health Board shall, taking into account the
guidelines established under subsection (a), establish
certification standards which shall specify—
(A) the functions performed by a health
worker employed in such job category;
(B) the skills required in the course of
properly performing work under such job cat-
egory;
(C) the initial and continuing training, ex-
perience, and performance which must be un-
dertaken or demonstrated by a health worker to
achieve and maintain competency to perform
the work within such job category; and
(D) the curriculum which a health worker
must follow in studies in a health team school
(established under subtitle B) to demonstrate
sufficient competence to satisfy the specification
of subparagraph (C) for such job category.
(2) SPECIFICATIONS.—For each job category
established and determined by the National Health
Board to involve highly specialized skills requiring
advanced specialty training, the National Health
Board shall make the specifications described in sub-
paragraphs (A) through (D) of paragraph (1).
(3) PERIODIC
REVIEW.—Standards for a job
category under this subsection shall be periodically
reviewed to supplement, modify, or eliminate such
standards as will facilitate the delivery of quality
health care services under this Act.
(4) QUALITY PROTECTION.—
(A) PROHIBITION
OF
DOWNGRADES
OF
LEVELS.—No individual health facility adminis-
trator is authorized to downgrade the level of
skill, license or certification required to perform
duties delineated by the Board.
(B) REVIEW.—
(i) REVIEW OF STAFFING CHANGES.—
Upon enactment of this Act, the Board
shall convene a national level task force to
review the impact on the safety and health
of patients and workers of downgrading
and deskilling of health care job categories
by replacing licensed with unlicensed work-
ers during the 1990s, particularly in the
nursing area, and to recommend remedies
as appropriate.
(ii) WHISTLEBLOWER PROTECTION.—
Health care workers who report com-
promises in the quality of care shall not be
subjected to recriminations.
(C) WORKFORCE STAFFING LEVELS.—The
Board may establish health workforce staffing
levels as it determines will promote the delivery
of quality health care services.
Subtitle B—Education of Health
Workers
SEC. 311. HEALTH TEAM SCHOOLS.
(a) ESTABLISHMENT.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the Board shall establish a procedure for
converting existing educational facilities for health
services workers to create health team schools (each
in this subtitle referred to as a ‘‘school’’) in accord-
ance with this section to provide programs of initial
and continuing basic education in health care deliv-
ery for health workers in all job categories, and to
provide initial continuing advanced education in
health care specialties and health science specialty
fields. Such schools shall be established and func-
tioning not later than 4 years after the effective date
of health services.
(2) USE OF FUNDS.—Schools shall be funded
exclusively by the Service, shall not charge nor ac-
cept tuition or fees for enrollment, and shall provide
each student with an adequate allowance for living
expenses, educational supplies, and any child care
expenses.
(b) OPERATIONAL PRINCIPLES.—Schools shall be op-
erated and maintained in accordance with the following
principles:
(1) The activities of each school shall be de-
signed to meet the health needs of the population.
(2) The number of students enrolled in each
educational program in a school shall be based on
the needs for health workers within a given area, de-
fined by geographic and political boundaries.
(3) Schools shall integrate the education of
health workers in the different job categories (estab-
lished under subtitle A) so as to permit health work-
ers to be educated and certified for successively
higher levels of health care work.
(4) Each school’s admissions policies, cur-
riculum policies, faculty hiring procedures, and gov-
ernance plan shall be established and implemented
in accordance with subsections (c) through (f), re-
spectively, and with the fullest possible participation
of the community health workers, staff, and students
in its region.
(5) A school may not use individuals who are
from low-income populations or minority groups, or
who are women or confined in mental or penal insti-
tutions, as subjects for training or demonstration in
numbers that are disproportionate to their numbers
in the population of the region, and may not use any
individuals as subjects for training or demonstration
in a manner beyond that required for the immediate
purpose of the training or demonstration or without
their explicit consent.
The National Health Board shall establish, not later than
one year after the effective date of health services, guide-
lines for the application of these principles and for the
phased integration of health worker education programs,
including medical, dental, osteopathic, and nursing school
programs, in existence on the date of enactment of this
Act into the schools established under this section.
(c) ADMISSIONS POLICIES.—Admissions policies for
education programs in schools shall—
(1) emphasize previous health-related work ex-
perience, as evaluated by health workers (including
peers), by individuals who have received health care
services from the applicant, and by faculty members;
(2) minimize the use of criteria of academic
performance other than such criteria as have been
shown to be significantly related to future work per-
formance;
(3) give preference to segments of the popu-
lation of the region underrepresented among health
workers;
(4) to the extent consistent with paragraph (3),
provide for admission of individuals so that the stu-
dent body approximates the population of the region
by race, sex, family income, and language; and
(5) require that the applicant agree, if accepted
into the school, to perform health care services in ac-
cordance with section 312.
(d) CURRICULUM POLICIES.—The National Health
Board, in consultation with its local and regional authori-
ties, shall establish and implement curriculum policies for
educational programs in schools. Such policies shall—
(1) give priority in study and field work to the
leading causes of illness and death in the region, in-
cluding environmental, biological, and social deter-
minants of mortality and morbidity;
(2) give special consideration to studying the
social, as well as biological, causation and prevention
of illness and disease, and to the differing health
care needs of populations facing special health risks
and having special cultures and lifestyles within the
region;
(3) provide that all students shall take a com-
mon, initial sequence of courses and that students
preparing for more advanced types of health work
shall take studies that are progressively more spe-
cialized and differentiated;
(4) emphasize work study experience in all
types of health care facilities in the region, including
community and workplace facilities, facilities for the
aged, mentally ill, and mentally retarded, health care
facilities in prisons and other correctional institu-
tions, alcohol and drug rehabilitation facilities, envi-
ronmental health facilities, and all other health care
facilities of the Service in communities and districts
in the region;
(5) emphasize the appropriate and safe use,
and discourage the overuse, of drugs and medical
techniques; and
(6) facilitate the development by all health
workers of skills in decisionmaking and assessment
of user needs in cooperation with other health work-
ers and with users.
(e) FACULTY HIRING PROCEDURES.—Faculty hiring
procedures in schools shall, to the maximum extent fea-
sible, create a faculty which approximates the population
of the region by race, sex, and language.
(f) GOVERNANCE PLANS.—Governance plans for the
management of a school shall give significant decision-
making powers to staff and students of the school.
SEC. 312. SERVICE REQUIREMENT.
(a) SERVICE REQUIREMENT.—
(1) IN GENERAL.—No individual may be en-
rolled in a school unless the individual agrees to per-
form health care services as an employee of the
Service in the job category for which training is
being provided—
(A) for a period of time equal to the period
of such enrollment in the school but not less
than 2 years;
(B) beginning not later than 1 year after
the date of the individual’s graduation from the
school; and
(C) for an area with the highest priority
ranking under subsection (c) that agrees to em-
ploy the individual.
(2) DEFERRAL.—An individual’s obligation to
perform service under an agreement described in
paragraph (1) shall be deferred only for a period
during which the individual is physically or mentally
incapable of performing such service.
(3) COMPLETION OF SERVICE REQUIRED.—No
individual who has made an agreement described in
paragraph (1) may be employed other than in ac-
cordance with subsection (c), until the individual has
completed the period of obligated service in accord-
ance with this section.
(4) PENALTY FOR BREACH OF AGREEMENT.—
Except as provided in paragraph (5), if an individual
breaches an agreement under paragraph (1) by fail-
ing (for any reason) either to begin such individual’s
service obligation or to complete such service obliga-
tion, the Service shall be entitled to recover from the
individual an amount determined in accordance with
the formula A=C (1–s / (t)) in which—
(A) ‘‘A’’ is the amount the Service is enti-
tled to recover;
(B) ‘‘C’’ is an amount determined by the
National Health Board to be the costs to the
Service of the education program and allowance
received by the individual and the interest on
such costs which would be payable if at the
time the costs were undertaken they were loans
bearing interest at the maximum legal pre-
vailing rate, as determined by the Treasurer of
the United States;
(C) ‘‘t’’ is the total number of months in
the individual’s period of obligated service; and
(D) ‘‘s’’ is the number of months of such
period served by the individual. Any amount of
damages which the Service is entitled to recover
under this paragraph shall, within the 1-year
period beginning on the date of the breach of
the agreement, be paid to the Service.
(5) CANCELLATION.—
(A) UPON DEATH.—Any obligation of an
individual under this subsection for service or
payment of damages shall be canceled upon the
death of the individual.
(B) EXTREME
HARDSHIP
EXCEPTION.—
The National Health Board shall provide for
the waiver or suspension of any obligation of
service or payment by an individual under this
subtitle whenever compliance by the individual
is impossible or would involve extreme hardship
to the individual and if enforcement of such ob-
ligation with respect to any individual would be
unconscionable.
(C) LIMITATION ON DISCHARGE IN BANK-
RUPTCY.—Any obligation of an individual under
this subtitle for payment of damages may be re-
leased by a discharge in bankruptcy under title
11 of the United States Code only if such dis-
charge is granted after the expiration of the 5-
year period beginning on the first date that
payment of such damages is required.
(b) PERIODIC REASSESSMENT
OF WORKER RA-
TIOS.—The National Health Board shall periodically as-
sess the ratio of the number of health workers employed
by the Board in each job category (established under sub-
title A) in an area to the number of residents in the area.
(c) WORKER MATCHES.—The National Health Board
shall establish a program to match the locational pref-
erences of graduates of schools with the needs and pref-
erences of regions.
SEC. 313. PAYMENT FOR CERTAIN EDUCATIONAL LOANS.
(a) LOAN PAYMENT PROGRAM.—In the case of any
individual who has incurred any educational loan before
the fourth year after the effective date of health services
and for the individual’s costs for an educational program
in health care delivery, health care specialties, or health
science specialty fields, the National Health Board shall
make payments, in accordance with subsection (b), for and
on behalf of that individual, on the principal of and inter-
est on any such loan which is outstanding on the date the
individual begins to work for the Service.
(b) MAKING OF PAYMENT.—The payments described
in subsection (a) shall be made by the National Health
Board as follows:
(1) Upon completion by the individual for whom
the payments are to be made of the first year of em-
ployment with the Service, the National Health
Board shall pay 30 percent of the principal of, and
the interest on, each loan described in subsection (a)
which is outstanding on the date he began such em-
ployment.
(2) Upon completion by that individual of the
second year of such employment, the National
Health Board shall pay another 30 percent of the
principal of, and the interest on, each such loan.
(3) Upon completion by that individual of a
third year of such employment, the National Health
Board shall pay another 25 percent of the principal
of, and the interest on, each such loan.
(4) Upon completion by that individual of a
fourth year of such employment, the National
Health Board shall pay the remaining 15 percent of
the principal of, and all remaining interest on, each
such loan.
No payment may be made under this subsection with re-
spect to a loan unless the person on whose behalf the pay-
ment is to be made has submitted to the National Health
Board a certified copy of the agreement under which such
loan was made.
(c) PAYMENT
DURING
EMPLOYMENT.—Notwith-
standing the requirement of completion of employment
specified in subsection (b), the National Health Board
shall on or before the due date thereof, pay any loan or
loan installment which may fall due within the period of
employment for which the borrower may receive payments
under this section, upon the declaration of such borrower,
at such times and in such manner as the National Health
Board may prescribe (and supported by such other evi-
dence as the National Health Board may reasonably re-
quire), that the borrower is then employed as described
in subsection (b) and that the borrower will continue to
be so engaged for the period required (in the absence of
this subsection) to entitle the borrower to have made the
payments provided by this section for such period, except
that not more than 85 percent of the principal of any such
loan shall be paid pursuant to this subsection.
Subtitle 
C—Employment 
and
Labor-Management 
Relations
Within the Service
SEC. 321. EMPLOYMENT, TRANSFER, PROMOTION, AND RE-
CEIPT OF FEES.
(a) SERVICE EMPLOYEES.—The National Health
Board shall employ, classify, and fix the salaries and bene-
fits of all employees of the Service employed in the Serv-
ice’s facilities.
(b) POLICIES.—The National Health Board, in estab-
lishing guidelines and standards under this subtitle, shall,
to the extent feasible and consistent with the provisions
of this subtitle, provide for—
(1) employment and promotion in the Service in
the same manner as is provided for employment and
promotion under the Federal civil service system;
(2) meaningful opportunities for career ad-
vancement;
(3) encouragement of health workers to use up
to 10 percent of their work time for continuing edu-
cation under subtitle B without loss of pay or other
job rights; and
(4) full protection of employees’ rights by pro-
viding an opportunity for a fair hearing on adverse
actions with representation of their own choosing.
(c) HIRING PREFERENCES.—The National Health
Board, in hiring for employees to fill vacancies in newly
created positions, shall give preference to individuals who
were employed as health workers, or self-employed while
delivering health services, before the date of enactment of
this Act. The National Health Board shall ensure, through
such steps as it deems necessary, that all such individuals
desiring to be employed within the Service shall find ap-
propriate employment in the Service.
(d) PROMOTION AND TRANSFER.—Employees of the
Service shall be eligible for promotion or transfer to any
position in the Service for which they are qualified. A job
placement service in each region shall assist health work-
ers in its region in identifying suitable employment oppor-
tunities and in transferring between jobs. The authority
given by this subsection shall be used to provide a max-
imum degree of career opportunities for employees and to
ensure continued improvement of health care services.
(e) NO UNDUE FINANCIAL INCENTIVES.—No health
worker should benefit financially from the provision or de-
nial of services to individual patients, beyond their regular
remuneration.
(f) SOLE EMPLOYER.—An employee of the Service
may not receive any fee or perquisite on account of duties
performed by virtue of such employment except from the
Service.
(g) GRANDFATHER CLAUSE.—The National Health
Board shall support alternative procedures to assure that
health care professionals meet required standards, par-
ticularly those currently practicing in health professional
shortage areas in inner cities and in rural communities.
(h) TRANSITIONAL EMPLOYMENT.—Up to 1 percent
of the budget of the United States Health Service for each
of its first 2 years may be expended for the retraining
and hiring of sales, administrative, clerical, and service
employees displaced as a result of this Act, including those
in the health insurance industry.
SEC. 322. APPLICABILITY OF LAWS RELATING TO FEDERAL
EMPLOYEES.
(a) IN GENERAL.—Chapter 75 of title 5, United
States Code (relating to adverse actions against employ-
ees), apply to employees of the Service (other than employ-
ees serving on the personal staff of members of health
boards) except to the extent provided—
(1) in a collective bargaining agreement nego-
tiated on behalf of and applicable to them; or
(2) in procedures established by the Service and
approved by the Office of Personnel Management.
(b) COVERAGE UNDER WORKERS COMPENSATION.—
Employees of the Service are covered by subchapter I of
chapter 81 of title 5, United States Code (relating to com-
pensation for work injuries).
(c) CIVIL SERVICE.—
(1) APPLICATION
OF
CIVIL
SERVICE
RETIRE-
MENT.—Chapter 83 of title 5, United States Code
(relating to civil service retirement), applies to em-
ployees of the Service except to the extent provided
in a collective bargaining agreement negotiated on
behalf of and applicable to them.
(2) WITHHOLDING.—The Service shall withhold
from pay and shall pay into the Civil Service Retire-
ment and Disability Fund the amounts specified in
chapter 83 of title 5, United States Code, as re-
quired under paragraph (1). The Service, upon re-
quest of the Office of Personnel Management, but
not less frequently than annually, shall pay to the
Office the costs reasonably related to the adminis-
tration of Fund activities for employees of the Serv-
ice.
(d) ACCRUAL OF SICK AND ANNUAL LEAVE.—Sick
and annual leave and compensatory time of employees of
the Service, whether accrued prior to or after the com-
for whom there is a collective bargaining representa-
tive shall be made except by agreement between such
representative and the Service.
SEC. 323. APPLICABILITY OF FEDERAL LABOR-MANAGE-
MENT RELATIONS LAWS.
(a) APPLICATION OF NLRA.—
(1) IN GENERAL.—The provisions of the Na-
tional Labor Relations Act (42 U.S.C. 141 et seq.)
shall apply to the Service and its employees to the
extent, not inconsistent with subsection (b), to which
such provisions apply to employers (as defined in
section 2(2) of such Act), except that—
(A) the phrase ‘‘or any individual employed
as a supervisor’’ in section 2(3) of such Act
shall not apply (thereby making such Act apply,
for these purposes, to such individuals);
(B) section 9(b)(1) of such Act (providing
for separate treatment for professional and
nonprofessional employees) shall not apply;
(C) sections 206 through 210 of such Act
(relating to national emergencies) shall, for pur-
poses of this Act, have the phrases ‘‘the Presi-
dent of the United States’’ and ‘‘the Presi-
dent’’, wherever they appear, replaced by the
phrase ‘‘the National Health Board (or a com-
mittee thereof to which it has delegated such
authority)’’ and the phrase ‘‘national health or
safety’’ replaced by the phrase ‘‘health or safety
of the residents of any region’’; and
(D) section 213 (providing for intervention
in a strike or lockout by the Director of the
Federal Mediation and Conciliation Service)
shall not apply.
(2) STRIKES PERMITTED.—Paragraphs (3) and
(4) of section 7311 of title 5, United States Code
(prohibiting participation in a strike or an organiza-
tion asserting the right to strike), shall not apply to
employees of the Service.
(b) NEUTRALITY
IN UNION MATTERS.—The Na-
tional Health Board shall adopt as a matter of general
policy that governing boards at each level of the Service,
and employers acting as agents of these boards, agree to
determine employee preference on the subject of labor
union representation, and to determine which one if union
representation is preferred, by a card check procedure con-
ducted by a neutral third party in lieu of a formal election.
(c) COLLECTIVE BARGAINING.—
(1) IN GENERAL.—Collective bargaining agree-
ments between the National Health Board and duly
recognized bargaining representatives of employees
of the Service may include procedures for resolution
by the parties of grievances and adverse actions aris-
ing under the agreement, including procedures cul-
minating in binding third party arbitration.
(2) ALTERNATIVE PROCEDURES.—The National
Health Board and duly recognized bargaining rep-
resentatives of employees of the Service may by mu-
tual agreement adopt procedures for the resolution
by the parties—
(A) of grievances and adverse actions aris-
ing under collective bargaining agreements, and
(B) of disputes or impasses arising in the
negotiation of such agreements.
(d) CONFORMING AMENDMENT.—Section 3(e) of the
Labor-Management Reporting and Disclosure Act of 1959
(42 U.S.C. 402(e)) is amended by inserting ‘‘the United
States Health Service and’’ after ‘‘and includes’’.
SEC. 324. DEFENSE OF CERTAIN MALPRACTICE AND NEG-
LIGENCE SUITS.
(a) EXCLUSIVE REMEDY.—The remedy against the
United States provided by sections 1346(b) and 2672 of
title 28, United States Code, or by alternative benefits
provided by the United States where the availability of
such benefits precludes a remedy under section 1346(b)
of such title, for damage for personal injury, including
death, resulting from the performance of medical, surgical,
dental, or related functions, including the conduct of clin-
ical studies or investigations, by any employee of the Serv-
ice while acting within the scope of the employee’s employ-
ment, shall be exclusive of any other civil action or pro-
ceeding by reason of the same subject matter against the
employee (or the employee’s estate) whose act or omission
gave rise to the claim.
(b) DEFENSE.—The Attorney General shall defend
any civil action or proceeding brought in any court against
any person referred to in subsection (a) (or the person’s
estate) for any such damage or injury. Any such person
against whom such civil action or proceeding is brought
shall deliver within such time after date of service or
knowledge of service as determined by the Attorney Gen-
eral, all process served upon the person or an attested true
copy thereof to the person’s immediate superior or to
whomever was designated by the appropriate National
Health Board to receive such papers and such person shall
promptly furnish copies of the pleading and process there-
in to the United States attorney for the district embracing
the place wherein the proceeding is brought, to the Attor-
ney General, and to the National Health Board.
(c) PROCEDURE.—
(1) REMOVAL FROM STATE COURTS.—Upon a
certification by the Attorney General that the de-
fendant was acting in the scope of employment at
the time of the incident out of which the suit arose,
any such civil action or proceeding commenced in a
State court shall be removed without bond at any
time before trial by the Attorney General to the dis-
trict court of the United States of the district and
division embracing the place wherein it is pending
and the proceeding deemed a tort action brought
against the United States under the provision of
title 28, United States Code, and all references
thereto.
(2) MOTIONS TO REMAND.—If a United States
district court determines on a hearing on a motion
to remand held before a trial on the merits that the
case so removed is one in which a remedy by suit
within the meaning of subsection (a) is not available
against the United States, the case shall be re-
manded to the State court.
(3) EFFECT
OF
ALTERNATIVE
REMEDIES.—
Where a remedy by suit within the meaning of sub-
section (a) is not available because of the availability
of a remedy through proceedings for compensation
or other benefits from the United States as provided
by any other law, the case shall be dismissed, but in
the event the running of any limitation of time for
commencing, or filing an application or claim in,
such proceedings for compensation or other benefits
shall be deemed to have been suspended during the
pendency of the civil action or proceeding under this
section.
(d) SETTLEMENT.—The Attorney General may com-
promise or settle any claim asserted in such civil action
or proceeding in the manner provided in section 2677 of
title 28, United States Code, and with the same effect.
(e) LIMITATION.—For purposes of this section, the
provisions of section 2680(h) of title 28, United States
Code, shall not apply to assault or battery arising out of
negligence in the performance of medical, surgical, dental,
or related functions, including the conduct of clinical stud-
ies or investigations.
(f) LIABILITY INSURANCE.—The appropriate Na-
tional Health Board may, to the extent it deems appro-
priate, hold harmless or provide liability insurance for any
employee of the Service for damage for personal injury,
including death, negligently caused by such employee while
acting within the scope of employment and as a result of
the performance of medical, surgical, dental, or related
functions, including the conduct of clinical studies or in-
vestigations, if the employee is assigned to a foreign coun-
try or detailed to a State or political subdivision thereof
or to a nonprofit institution, and if the circumstances are
such as are likely to preclude the remedies of third persons
against the United States described in section 2679(b) of
title 28, United States Code, for such damage or injury.
TITLE IV—OTHER FUNCTIONS
OF HEALTH BOARDS
Subtitle A—Advocacy, Grievance
Procedures, and Trusteeships
SEC. 401. ADVOCACY AND LEGAL SERVICES PROGRAM.
(a) ESTABLISHMENT OF PROGRAM.—The National
Health Board shall establish a program of health advocacy
to ensure the full realization of the patient rights enumer-
ated in subtitle A of title II. Such a program shall
include—
(1) the employment of individuals having basic
legal knowledge and skills as health advocates;
(2) the presence of health advocates—
(A) in inpatient health care facilities at all
times; and
(B) in other health care facilities during
the provision of health care services;
(3) provision for health advocates to (A) in-
form, on an ongoing basis, users and health workers
of such patient rights and (B) report to the National
Health Board any infraction of such rights which is
not promptly corrected;
(4) provision for regular meetings between
health workers and health advocates, users, and any
user representatives to discuss ways of ensuring the
fulfillment of such rights through affirmative action
of such workers and the National Health Board; and
(5) appropriate action by the National Health
Board to ensure that infractions of such rights are
promptly and sufficiently corrected.
(b) HEALTH RIGHTS LEGAL SERVICES.—
(1) ESTABLISHMENT OF PROGRAM.—The Na-
tional Health Board shall establish a health rights
legal services program and shall provide such pro-
gram with sufficient legal and administrative per-
sonnel, funding, and facilities (A) to ensure that
users and health workers receive, free of charge,
high quality legal services (including representation
in grievance proceedings commenced under section
402) for legal problems related to health rights and
health care services, and (B) to improve, through
litigation and other activities, the health care system
and expand the rights of users and health workers.
(2) SERVICES.—The health rights legal services
program shall provide directly, by contract with the
Legal Services Corporation, or by contract with
members of the private bar, for—
(A) establishment of a legal services office
in each region to provide representation (other
than representation provided under subpara-
graph (B)) of users, health workers, and vol-
untary associations having a demonstrated in-
terest in health care in proceedings and hear-
ings under sections 324 and 402; and
(B) establishment of legal services offices
in such communities and districts as are deter-
mined, in accordance with guidelines established
by the National Health Board, to have inad-
equate legal services to provide the legal serv-
ices described in paragraph (1)(A).
(3) USE OF CONTRACTS.—The National Health
Board may carry out the functions described in
paragraph (1)(B) directly, by contract, or otherwise.
SEC. 402. GRIEVANCE PROCEDURES.
(a) GRIEVANCE PROCEEDINGS.—
(1) IN GENERAL.—The National Health Board
shall provide, in accordance with this section, that
any user, health worker, or any user association hav-
ing a demonstrated interest in health care may com-
mence a grievance proceeding before the Board (or
a person or committee designated by such Board)
with respect to an alleged violation of this Act. The
National Health Board may commence a grievance
proceeding before itself (or a person or committee
designated by such Board) with respect to an alleged
violation of this Act.
(2) GRIEVANCES AGAINST NATIONAL HEALTH
BOARD.—Grievances against the National Health
Board may be presented to and adjudicated by the
Inspector General for Health Services or the Inspec-
tor’s General local designees. Grievants shall also
have access to review in the courts.
(b) REVIEW.—
(1) BY NATIONAL HEALTH BOARD.—The Na-
tional Health Board shall provide, subject to para-
graphs (2) and (3), for its review (or a review by a
person or committee designated by the Board), by
appeal to the Board by any party to a proceeding
described in subsection (a)(1) or on its own initia-
tive, of an adverse decision
(2) LIMITATION ONCE SUIT COMMENCED.—On
and after the date a suit with respect to an adverse
determination in a grievance proceeding or review
proceeding is filed under subsection (e), no review
proceeding respecting such proceeding may be com-
menced by appeal to the Board under paragraph (1),
and any such review proceeding which was com-
menced by appeal to the Board under such para-
graph before the date of filing of such suit and is
pending on such date shall promptly be discon-
tinued.
(3) TIME LIMIT.—No review of an adverse ad-
ministrative decision may be made by appeal or by
initiative under this subsection unless the appeal is
filed or notice of the initiative is published (as the
case may be) not later than 30 days after the publi-
cation of the decision.
(c) INVESTIGATION.—Whenever a grievance pro-
ceeding is commenced under subsection (a), the entity be-
fore which the proceeding is held shall investigate the
grievance.
(d) RIGHT TO SUE.—Any party to a grievance pro-
ceeding or review proceeding commenced under this sec-
tion may bring suit in the United States district court for
the judicial district in which such proceeding, or review
proceeding, was brought, for the review of an adverse de-
termination in such proceeding or review proceeding. Such
court shall affirm such determination unless it finds that
such determination is not supported by substantial evi-
dence or is arbitrary and capricious.
Subtitle B—Occupational Safety
and Health Programs
SEC. 411. FUNCTIONS OF THE NATIONAL HEALTH BOARD.
(a) OVERSIGHT AUTHORITY.—On and after the effec-
tive date of health services, the National Health Board
shall oversee occupational safety and health programs con-
ducted at the regional level, and shall participate in the
establishment and administration of occupational safety
and health standards under the Occupational Safety and
Health Act of 1970.
(b) CONFORMING AMENDMENTS.—
(1) IN GENERAL.—To provide for participation
of the National Health Board in the establishment
and administration of occupational safety and health
standards, the Occupational Safety and Health Act
of 1970 (29 U.S.C. 651 et seq.) is amended—
(A) in section 3, by adding at the end the
following new paragraph:
‘‘(15) The term ‘National Health Board’’
means the National Health Board of the United
States Health Services.’’;
(B) by striking ‘‘Secretary of Health and
Human Services’’ each place it appears (other
than in section 22(b)) and inserting ‘‘National
Health Board’’;
(C) in the first sentence of section 6(b)(1),
by inserting ‘‘shall request the National Health
Board and’’ before ‘‘may request’’;
(D) in the second sentence of section
6(b)(1), by inserting ‘‘the Board and’’ after
‘‘The Secretary shall provide’’;
(E) in the third sentence of section
6(b)(1), by striking ‘‘An’’ and inserting ‘‘The
Board and an’’;
(F) in the third sentence of section
6(b)(1), by striking ‘‘its’’ each place it appears
and inserting ‘‘their’’;
(G) in the fourth sentence of section
6(b)(6)(A), by inserting ‘‘after consultation
with the National Health Board and’’ after
‘‘may be granted only’’;
(H) in the third sentence of section 6(d),
by inserting ‘‘after consultation with the Na-
tional Health Board and’’ before ‘‘after oppor-
tunity for’’;
(I) in section 8(g)(2), by striking ‘‘The
Secretary’’ and all that follows through ‘‘shall
each’’ and inserting ‘‘The Secretary shall’’;
(J) in section 8(g)(2), by striking ‘‘their’’
and inserting ‘‘his’’;
(K) in section 16, by inserting ‘‘after con-
sultation with the National Health Board and’’
before ‘‘after notice and opportunity’’;
(L) in section 18(c), by inserting ‘‘(after
consultation with the National Health Board)’’
after ‘‘in his judgment’’;
(M) in section 19(d), by inserting ‘‘and the
National Health Board’’ after ‘‘Secretary’’ each
place it appears; and
(N) in section 20(a), by striking the first
sentence of paragraph (5).
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall take effect on the effective
date of health services.
(f) GUIDELINES.—The National Health Board shall
establish guidelines—
(1) for its participation in the establishment
and administration of occupational safety and health
standards under the Occupational Safety and Health
Act of 1970; and
(2) for the establishment and operation of
workplace health facilities under section 413.
SEC. 
412. 
COMMUNITY 
OCCUPATIONAL 
SAFETY 
AND
HEALTH ACTIVITIES.
The Occupational Safety and Health Administration,
under the direction of the National Health Board, shall
develop and provide staff support for local and regional
occupational safety and health programs, to include com-
munity-based occupational safety and health councils that
represent community workers and residents. Such pro-
grams shall—
(1) promote and assist in the establishment of
workplace occupational safety and health committees
in workplaces in the community, and advise and fa-
cilitate such committees’ actions relating to safety
and health hazards in workplaces in the community;
and
(2) assist employees in determining methods of,
and requirements for, inspections of workplaces in
the community for safety and health hazards.
(A) implement training programs to en-
hance the ability of employees in the region to
monitor safety and health conditions in their
workplaces and to assist safety and health in-
spectors in the conduct of workplace inspec-
tions;
(B) facilitate communication among work-
ers employed in similar industries in the region
and the Nation with respect to occupational
health and safety hazards they face in common;
(C) conduct baseline and periodic biologic
screening of employees in the region;
(D) develop and maintain environmental
monitoring programs to identify and isolate
hazardous workplaces and work areas in the re-
gion;
(E) analyze employment-related injuries
and illnesses occurring in the region
SEC. 413. WORKPLACE HEALTH FACILITIES.
(a) ESTABLISHMENT.—The Occupational Safety and
Health Administration, under the direction of the Na-
tional Health Board, shall develop a program to establish
worksite health facilities, distributed to make available oc-
cupational and emergency health care services to individ-
uals employed in the workplace in accordance with this
section and guidelines and standards for such facilities es-
tablished by the National Health Board. Such facilities
may be maintained by each employer where the facility
is located, or by the group of employers covered by a facil-
ity.
(b) APPLICATION OF GUIDELINES.—Each workplace
health facility established pursuant to subsection (a) shall,
taking into account guidelines established by the National
Health Board—
(1) be organized in a manner so as to provide
an appropriate number of appropriately skilled
health workers to meet occupational and emergency
health care needs of employees in the workplace; and
(2) be operated by the community for the com-
munity in which the workplace is predominantly lo-
cated, or, where the National Health Board or its
local authority deems appropriate, by the employer,
with the cost in either case borne by the employer
in each workplace.
SEC. 414. EMPLOYEE RIGHTS RELATING TO OCCUPATIONAL
SAFETY AND HEALTH.
(a) WORKPLACE COMMITTEES.—
(1) 
ESTABLISHMENT.—Employees 
in 
each
workplace having 25 or more employees shall have
the right to establish workplace occupational safety
and health committees (each in this subsection re-
ferred to as a ‘‘committee’’) with members of their
choosing.
(2) MEMBERSHIP.—Members of committees
(composed of the greater of 3 members or one mem-
ber for each 100 employees in the workplace) shall,
without any loss of pay or other job rights—
(A) be permitted to spend eight hours of
each month inspecting their workplace and con-
ducting such other functions relating to occupa-
tional safety and health as are determined by
the employees in the workplace; and
(B) be permitted to accompany any safety
and health inspectors during inspections of the
workplace.
(b) SAFETY-RELATED RIGHTS.—Employees in each
workplace shall have the right, without any loss of pay
or other job rights—
(1) to monitor safety and health conditions in
their workplace whenever they reasonably deem it
necessary and with whatever reasonable scientific in-
struments and expert assistance they choose; and
(2) to remove themselves from the site of any
hazard to their safety or health until an authorized
inspector has certified that the hazard has been
eliminated.
(c) SAFE WORKPLACES.—Employers shall adopt all
feasible engineering measures that will minimize occupa-
tional safety and health hazards in the workplace. Where
such measures are not adequate to protect employees from
such hazards, employers shall furnish their employees
with, or reimburse their employees for the reasonable cost
of, equipment and clothing needed to protect an employee
from any residual occupational safety and health hazards
in the workplace.
(d) RIGHT TO INSPECT MEDICAL RECORDS.—Em-
ployees or their duly chosen representatives shall have the
right to inspect all medical records maintained by their
employers on the condition of their health, and shall have
the right to be assisted during such inspections by persons
of their choosing.
(e) COPIES OF REPORTS.—Employers shall provide
their employees with copies of all reports, studies, and
data concerning conditions affecting the health and safety
of employees within their workplaces, with annual reports
on the morbidity and mortality experience of present and
former employees, and with timely notification of the pres-
ence within the workplace of any materials, agents, or con-
ditions which may have a deleterious effect on the safety
and health of their employees, along with relevant infor-
mation on hazards and precautions, symptoms, remedies,
and antidotes.
(f) RIGHT TO NEGOTIATE STANDARDS.—Employees
shall have the right to seek, through collective bargaining,
occupational safety and health standards, including stand-
ards relating to physical and mental stress and speed of
work, more restrictive than such standards established
under the Occupational Safety and Health Act of 1970.
SEC. 415. DEFINITIONS.
(a) WORKPLACE.—For purposes of this subtitle, the
term ‘‘workplace’’ means the regular location where work
is performed by one or more employees of an employer.
(b) EMPLOYER; EMPLOYEE.—For the purposes of
sections 413 and 414, the terms ‘‘employer’’ and ‘‘em-
ployee’’ have the same meanings those terms have in sec-
tion 3 of the Occupational Safety and Health Act of 1970
(42 U.S.C. 653).
Subtitle 
C—Health 
and 
Health
Care Delivery Research, Quality
Assurance, and Health Equity
SEC. 421. PRINCIPLES AND GUIDELINES FOR RESEARCH.
(a) CONDUCT.—On and after the effective date of
health services, the Service shall conduct a program of re-
search concerning health and health care delivery. On and
after 2 years after such date, such research program shall
conform to the following principles:
(1) The research shall, to the maximum extent
possible, be performed under the direction of, and in
association with, agencies representative of the popu-
lation.
(2) No research shall be conducted within, or
using the resources of, an area health facility until
it has been reviewed and approved by the National
Health Board, or a designated local authority re-
sponsible for such facility.
(3) Priority shall be given in health research to
the prevention and correction of the leading causes
of illness and death, particularly environmental, oc-
cupational, nutritional, social, and economic causes.
(4) Priority shall be given in health care deliv-
ery research to improvement of the effectiveness and
efficiency of ambulatory and primary health care de-
livery, including research on alternative systems of
health care delivery and alternative conceptions of
health and health care.
(5) The National Health Board shall encourage
and support the conduct of clinical trials that may
improve the health of the public. Any clinical trial
conducted with the intention of evaluating new pre-
ventive, diagnostic, or therapeutic methods or agents
shall be conducted only in accordance with estab-
lished ethical procedures that protect subjects from
undue harm. If benefit becomes apparent, by sci-
entific consensus, before the scheduled conclusion of
any clinical trial, such trial shall nevertheless be ter-
minated, and the benefit made available to trial par-
ticipants and the public at large.
(6) No research shall be conducted on a human
subject without the subject’s informed written con-
sent.
(7) No research shall be conducted on a human
subject while the subject is involuntarily confined to
an institution.
(8) The planning and conduct of research under
the program, shall take place in cooperation with ap-
propriate officials conducting related research in the
Federal Government and agencies and departments
of State, territorial, and local governments.
(9) The results of research shall be dissemi-
nated to the public and to National Health Board in
a manner that will most readily permit the use of
such results to improve the health of users and the
delivery of health care services.
(b) GUIDELINES.—The National Health Board shall
establish guidelines for the conduct of research in con-
formance with the principles described in subsection (a).
SEC. 422. ESTABLISHMENT OF INSTITUTES.
(a) IN GENERAL.—On the effective date of health
services, the agencies of the Department of Health and
Human Services that conduct research on health and
health care are transferred to the National Health Board.
These include the Agency for Healthcare Research and
Quality, the Agency for Toxic Substances and Disease
Registry, the Centers for Disease Control and Prevention,
the National Institutes of Health (established under title
IV of the Public Health Service Act), and the Substance
Abuse and Mental Health Services Administration. In ad-
dition, the National Health Board shall establish the fol-
lowing institutes:
(1) NATIONAL INSTITUTE OF EPIDEMIOLOGY.—
A National Institute of Epidemiology, which shall—
(A) gather and analyze disease-related sta-
tistics collected by the Service;
(B) plan, conduct, support, and assist in
epidemiologic research conducted by the Serv-
ice;
(C) conduct and support research on epi-
demiologic methodology and experimental epide-
miology;
(D) establish and maintain an early warn-
ing system for the detection of new diseases
and epidemics; and
(E) assist in the formulation of policies to
eliminate or reduce the causes of illness and in-
jury and to prevent and curtail epidemics of
these conditions.
(F) provide technical assistance and sup-
port to regional and local jurisdictions related
to measures to prevent and curtail outbreaks of
illness and injury.
(2) NATIONAL
INSTITUTE
OF
EVALUATIVE
CLINICAL RESEARCH.—A National Institute of Eval-
uative Clinical Research, which shall—
(A) create a uniform electronic data base
for research on quality improvement in clinical
care and the organization and delivery of serv-
ices, and for research on outcomes of care;
(B) assess and analyze evidence on newly
discovered or proposed preventive, diagnostic,
and therapeutic methods and agents, including
new technologies, and assist the National
Health Board, in cooperation with other bodies,
including the National Institute of Pharmacy
and Medical Supply, in developing guidelines
and standards for their introduction;
(C) analyze evidence on newly discovered
or proposed preventive, diagnostic, and thera-
peutic methods and agents;
(D) plan and conduct clinical trials, in con-
formance with the limitations of subtitle A of
title II;
(E) assist the National Health Board, in
cooperation with other bodies, including the Na-
tional Institute of Pharmacy and Medical Sup-
ply, in developing guidelines and standards for
the introduction of new methods of prevention,
diagnosis, and treatment;
(F)(i) regularly assess and recommend
measures to improve the health status of the
population, which methods shall include anal-
ysis of the national health data base, regular
surveys of the population regarding their expe-
rience and evaluation of their health and health
services, and such other methods as designated
by the Institute;
(ii) identify the most effective methods of
prevention, diagnosis and treatment, as deter-
mined by the most recent evidence, and assist
the National Health Board, in cooperation with
other bodies, in establishing guidelines to im-
prove clinical practice, including clinical deci-
sion criteria per section 221(f);
(iii): regularly monitor and report to the
National Health Board for further action the
extent of inappropriate care, including under-
service and overservice, and its consequences;
(iv) develop additional methods of quality
improvement for implementation by the Na-
tional Health Board and other entities, includ-
ing systematic review of patterns of practice
that compromise the quality of care and rec-
ommendations to redress such practices, edu-
cation for health care workers to improve the
quality of care, and guidelines for the optimal
organization of health services and the use of
tertiary care facilities;
(G) administer the periodic convening of
the U.S. Preventive Health Services Task
Force, which shall recommend to the National
Health Board a schedule for preventive health
services based on age and sex, which schedule
shall reflect the most recent medical evidence;
and
(H) provide education for users on clinical
effectiveness guidelines and the most effective
preventive, diagnostic, and treatment practices.
(3) NATIONAL
INSTITUTE
OF
HEALTH
CARE
SERVICES.—A National Institute of Health Care
Services, which shall—
(A) analyze data and statistics on the
health care resources and needs of the Nation
and on the quality of present services;
(B) conduct comparative studies of health
care services in the various regions of the Na-
tion, and make recommendations for the im-
provement of health care services in areas with
inferior quality of health care services;
(C) plan and conduct research on alter-
native methods of health care delivery, on the
functions, tasks, performance and work rela-
tionships of various kinds and categories of
health workers, on patterns of organization of
health care, and on the effectiveness and bene-
fits of health care in relation to costs; and
(D) assist the National Health Board in
formulating national policies to improve the
quality of health care services.
(4) NATIONAL INSTITUTE OF PHARMACY AND
MEDICAL SUPPLY.—A National Institute of Phar-
macy and Medical Supply, which shall—
(A) recommend to the National Health
Board standards regarding the quality, dis-
tribution, and price of all drugs, therapeutic de-
vices, appliances and equipment to be used by
the Service;
(B) certify drugs, therapeutic devices, ap-
pliances, and equipment for use in the health
facilities of the Service, and for furnishing to
users of such health facilities;
(C) assist the National Health Board in
issuing a National Pharmacy and Medical Sup-
ply Formulary; and
(D) conduct a comprehensive program of
pharmaceutical and medical supply research
and utilization education using regional facili-
ties to the maximum extent possible
(5) NATIONAL
INSTITUTE
OF
SOCIOLOGY
OF
HEALTH AND HEALTH CARE.—A National Institute
of Sociology of Health and Health Care, which
shall—
(A) conduct ongoing analyses of the basic
epistemological assumptions of health and
health care;
(B) assess critically the effects of scientific
medicine and of divisions in institutional and
technical skills in health care;
(C) evaluate the effects of health care
measures and policies upon population groups
and subgroups in the Nation;
(D) identify and analyze the social, cul-
tural, economic, occupational, distributional,
and environmental factors in modern society af-
fecting health and well-being;
(E) analyze alternative, holistic approaches
to the human body, health, and causality of ill
health and the lack of social and psychological
well-being; and
(F) assist the National Health Board in
formulating national policies relating to the pro-
motion of health and the provision of health
care.
(b) COORDINATION
OF
EFFORT.—The National
Health Board will establish mechanisms for internal co-
ordination of research among the five Institutes, and will
also coordinate effort with agencies under the Department
of Health and Human Services, including the Food and
Drug Administration and the Health Resources and Serv-
ices Administration.
Subtitle D—Health Planning, Dis-
tribution of Drugs and Other
Medical Supplies, and Miscella-
neous Functions
SEC. 431. HEALTH PLANNING AND BUDGETING.
(a) IN GENERAL.—The National Health Board shall
develop and implement guidelines to collect data on the
supply of and demand for health workers in facilities
under its supervision, and on the delivery of health care
and supplemental services in health care facilities under
its supervision, shall evaluate such data in relation to the
health care needs of their respective area, and shall trans-
mit such data and evaluation as necessary for implementa-
tion, and shall make available such data and evaluations
to residents of their respective area.
(b) COORDINATION.—The National Health Board
shall coordinate the planning and administration of the
delivery of health care services, health worker education,
and health research within regions, and shall facilitate the
planning and administration of such programs.
(c) PLANS.—The National Health Board shall formu-
late a 1-year and 5-year national health plan and budget,
taking into account the regional budgets prepared in ac-
cordance with section 522.
SEC. 432. DISTRIBUTION OF DRUGS AND OTHER MEDICAL
SUPPLIES.
(a) NATIONAL FORMULARY.—
(1) 
PUBLICATION.—The 
National 
Health
Board, shall, not later than the effective date of
health services, publish and disseminate a National
Pharmacy and Medical Supply Formulary (in this
section referred to as the ‘‘Formulary’’).
(2) CONTENTS.—The Formulary shall contain a
listing of drugs, therapeutic devices, appliances,
equipment, and other medical supplies (including
eyeglasses, other visual aids, hearing aids, and pros-
thetic devices) (in this section referred to as ‘‘drugs
and other medical supplies’’). For each item on such
listing the Formulary shall contain (A) the stand-
ards of quality for the production of such item, (B)
the medical conditions for which the item is certified
as effective for purposes of the provision of health
care services under this Act, and (C) such other in-
formation on such item as the National Health
Board determines to be appropriate for the effective
and efficient delivery of health care services under
this Act.
(3) UPDATING.—The National Health Board
shall, at regular intervals, update the contents of the
Formulary and publish a price list for items listed
in the Formulary, which prices shall reflect the ac-
tual costs of manufacture.
(b) DRUG PURCHASE PROGRAMS.—
(1) IN GENERAL.—The National Health Board
shall establish a program, in accordance with this
subsection for the purchase and distribution of
drugs and other medical supplies for use in health
care facilities.
(2) PRICING.—Such program shall provide for
the purchase of each drug or other medical supply
item only (A) following competitive bidding on such
item or (B) based on the price listed for such item
in the price list published under subsection (a)(3).
(3) GENERIC
DISTRIBUTION.—Such program
shall provide for the distribution and dispensing of
drugs under their generic names.
(4) GENERIC NAMES DEFINED.—For purposes
of paragraph (3), the term ‘‘generic names’’ means
the established names, as defined in section
502(e)(2) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 352(e)(2)).
(c) AUTHORITY TO MANUFACTURE.—The National
Health Board is authorized to establish and operate drug
and medical supply manufacturing facilities, if it deter-
mines that such operation will result in reduced expendi-
tures by the Service.
SEC. 433. MISCELLANEOUS FUNCTIONS OF THE NATIONAL
HEALTH BOARD.
(a) ANNUAL REPORT.—The appropriate National
Health Board shall publish, not later than December 31
of each year, a report presenting and evaluating oper-
ations of the Service during the fiscal year ending in such
year and surveying the future health needs of the Nation
and plans the Board has for the Service to meet such
needs.
(b) DISSEMINATION.—The National Health Board
shall, not later than the effective date of health services,
prepare and disseminate, for use by users, information
about health and health services deemed essential to en-
sure users’ active and informed participation in the health
care system, including information that is culturally ap-
propriate for each area’s principal cultural and ethnic
groupings, a comprehensive dictionary of terms used in
health care records and services maintained or provided
by the Service. Such dictionary shall explain terms related
to symptoms, signs, diagnoses, etiologic agents and condi-
tions, diagnostic procedures, and the treatment and pre-
vention of, and rehabilitation following, illnesses, and shall
include extensive citations of lay and professional sources
100
which a user might consult for additional information on
such terms.
TITLE V—FINANCING OF THE
SERVICE
Subtitle A—Health Service Taxes
SEC. 501. INDIVIDUAL AND CORPORATE INCOME TAXES.
(a) HEALTH SERVICE TAXES.—
(1) IN GENERAL.—Subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to
normal taxes and surtaxes) is amended by adding at
the end the following new part:
‘‘PART VIII—HEALTH SERVICE TAXES
‘‘Sec. 59B. Tax imposed.
‘‘SEC. 59B. TAX IMPOSED.
‘‘(a) INDIVIDUALS, ESTATES, AND TRUSTS.—In ad-
dition to other taxes, there is hereby imposed for each tax-
able year on the taxable income of every individual and
of every estate and trust taxable under section 1(d), a tax
in an amount equal to 10 percent of the total tax imposed
by section 1 for such taxable year.
‘‘(b) CORPORATION.—In addition to the other taxes,
there is hereby imposed for each taxable year on the tax-
able income of every corporation, a tax in an amount equal
to 90 percent of the total amount of the normal tax and
surtax imposed by section 11 for such taxable year.’’
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(2) CLERICAL
AMENDMENT.—The table of
parts of such subchapter A is amended by adding
after the item relating to part VII the following new
item:
‘‘Part VIII. Health service taxes.’’.
(b) EFFECTIVE DATE.—The amendments made in
this section shall apply to taxable years beginning on or
after the effective date of health services.
SEC. 502. OTHER CHANGES IN THE INTERNAL REVENUE
CODE OF 1986.
(a) DENIAL OF EXCLUSION FROM GROSS INCOME
FOR AMOUNTS PAID BY THIRD PARTIES FOR MEDICAL
CARE.—Section 105 of the Internal Revenue Code of 1986
(relating to amounts received under accident and health
plans) is amended by striking subsection (b).
(b) DENIAL OF EXCLUSION FROM GROSS INCOME OF
CERTAIN
CONTRIBUTIONS
BY
THE
EMPLOYER
TO
HEALTH PLANS.—Subsection (a) of section 106 of such
Code (relating to contributions by employer to accident
and health plans) is amended to read as follows:
‘‘(a) GENERAL RULE.—Except as otherwise provided
in this section, gross income does not include contributions
by the employer to accident or health plans for compensa-
tion (through insurance or otherwise) to his employees for
personal injuries or sickness to the extent that such con-
tributions do not provide for health care and supplemental
102
services available to such employees under the Josephine
Butler United States Health Service Act.’’
(c) DENIAL OF DEDUCTION OF HEALTH CARE EX-
PENSES AS TRADE OR BUSINESS EXPENSES.—Section
162 of such Code (relating to trade or business expenses)
is amended by redesignating subsection (p) as subsection
(q) and by adding after subsection (o) the following new
subsection:
‘‘(p) PAYMENTS FOR HEALTH CARE.—No deduction
shall be allowed under subsection (a) for any amount paid
for health care services (other than any amount of tax im-
posed by section 59B and paid by the employer on behalf
of his employees) which an individual was eligible to re-
ceive under title II of the Josephine Butler United States
Health Service Act.’’.
(d) DENIAL OF DEDUCTION FOR CONTRIBUTIONS TO
CERTAIN MEDICAL AND HOSPITAL FACILITIES.—
(1) Paragraph (2) of section 170(c) of such
Code (relating to charitable, etc., contributions and
gifts) is amended by inserting ‘‘(other than an orga-
nization described in subsection (b)(1)(A)(iii))’’ after
‘‘(2) A corporation, trust, or community chest, fund,
or foundation’’.
103
(2) Subsection (e) of section 501 of such Code
(relating to cooperative hospital service organiza-
tions) is amended by striking the last sentence.
(e) DENIAL OF DEDUCTION FOR MEDICAL, DENTAL,
ETC., EXPENSES.—
(1) Section 213 of such Code (relating to med-
ical, dental, etc., expenses) is repealed.
(2) The table of sections of part VII of sub-
chapter B of chapter 1 of such Code is amended by
striking the item relating to section 213.
(f) HOSPITAL INSURANCE TAX.—
(1) Subsection (b) of section 1401 of such Code
(relating to rate of tax on self-employment income)
is repealed.
(2) Subsection (b) of section 3101 of such Code
(relating to rate of tax on employees under the Fed-
eral Insurance Contributions Act) is repealed.
(3) Section 3201(a) of such Code (relating to
rate of tax imposed on employees under the Railroad
Retirement Tax Act) is amended by striking ‘‘the
sum of the rates of tax in effect under subsections
(a) and (b) of section 3101’’ and inserting ‘‘the rate
of tax in effect under section 3101(a)’’.
(4) Section 3211(a)(1) of such Code (relating
to rate of tax on employee representatives under the
104
Railroad Retirement Tax Act) is amended by strik-
ing ‘‘subsections (a) and (b)’’ the first place it ap-
pears and inserting ‘‘subsection (a)’’.
(5) Subsection (e) of section 6051 of such Code
(relating to railroad employees) is repealed.
(g) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning on or
after the effective date of health services.
SEC. 503. EXISTING EMPLOYER-EMPLOYEE HEALTH BEN-
EFIT PLANS.
No contractual or other nonstatutory obligation of
any employer to pay for or provide any health care and
supplemental service to his present and former employees
and their dependents and survivors, or to any of such per-
sons, shall apply on and after the effective date of health
services to the extent such individuals are eligible to re-
ceive such health care and supplemental services under
this Act.
SEC. 504. WORKERS COMPENSATION PROGRAMS.
No workers compensation program, whether estab-
lished pursuant to Federal or State law or private initia-
tive, shall pay for or provide any health care and supple-
mental services on and after the effective date of health
services, to the extent such health care and supplemental
services are available under this Act.
105
Subtitle B—Health Service Trust
Fund
SEC. 511. ESTABLISHMENT OF HEALTH SERVICE TRUST
FUND.
(a) ESTABLISHMENT.—There is hereby created on
the books of the Treasury of the United States a trust
fund to be known as the Health Service Trust Fund (in
this title referred to as the ‘‘Trust Fund’’). The Trust
Fund shall consist of such gifts and bequests as may be
made to the Service and such amounts as may be depos-
ited in, or appropriated to, such fund as provided in this
subtitle.
(b) APPROPRIATION.—There is hereby appropriated
to the Trust Fund for each fiscal year beginning in the
fiscal year in which the effective date of health services
(as defined in title VI) falls, and for each fiscal year there-
after, out of any moneys in the Treasury not otherwise
appropriated, an amount equal to 100 percent of expected
net receipts from the taxes imposed by sections 59B and
3111(b) of the Internal Revenue Code of 1986 (as esti-
mated by the Secretary of the Treasury). The amount ap-
propriated by the preceding sentence shall be transferred
from time to time from the general fund in the Treasury
to the Trust Fund in such smaller amounts to be deter-
mined on the basis of estimates by the Secretary of the
106
Treasury of the receipts specified in the preceding sen-
tence; and proper adjustments shall be made in the
amounts subsequently transferred to the extent prior esti-
mates were in excess of or were less than the receipts spec-
ified in such sentence.
SEC. 512. TRANSFER OF FUNDS TO THE HEALTH SERVICE
TRUST FUND.
(a) OF MEDICARE TRUST FUNDS.—On the effective
date of health services, there are transferred to the Trust
Fund all of the assets and liabilities of the Federal Hos-
pital Insurance Trust Fund and the Federal Supple-
mentary Medical Insurance Trust Fund.
(b) ADDITIONAL AMOUNTS.—In addition to the sums
appropriated by section 511(b), there is appropriated to
the Trust Fund for each fiscal year, out of any moneys
in the Treasury not otherwise appropriated, a govern-
mental contribution equal to 40 percent of the sums ap-
propriated by section 511(b) for such fiscal year. There
shall be deposited in the Trust Fund all recoveries of over-
payments, and all receipts under loans or other agree-
ments entered into, under this Act.
SEC. 513. ADMINISTRATION OF HEALTH SERVICE TRUST
FUND.
(a) BOARD
OF TRUSTEES.—With respect to the
Trust Fund, there is hereby created a body to be known
107
as the Board of Trustees of the Trust Fund (in this sec-
tion referred to as the ‘‘Board of Trustees’’) composed of
the Secretary of the Treasury, the Secretary of Health and
Human Services, and the Chairperson of the National
Health Board, all ex officio. The Secretary of the Treasury
shall be the Managing Trustee of the Board of Trustees
(in this section referred to as the ‘‘Managing Trustee’’).
The Chairperson of the National Health Board shall serve
as the Secretary of the Board of Trustees. The Board of
Trustees shall meet not less frequently than once each cal-
endar year. It shall be the duty of the Board of Trustees
to—
(1) hold the Trust Fund;
(2) report to the Congress not later than the
first day of April of each year on the operation and
status of the Trust Fund during the preceding fiscal
year and on its expected operation and status during
the current fiscal year and the next 2 fiscal years;
(3) report immediately to the Congress when-
ever the Board is of the opinion that the amount of
the Trust Fund is unduly small; and
(4) review the general policies followed in man-
aging the Trust Fund, and recommend changes in
such policies, including necessary changes in the
108
provisions of law which govern the way in which the
Trust Fund is to be managed.
The report provided for in paragraph (2) shall include a
statement of the assets of, and the disbursements made
from, the Trust Fund during the preceding fiscal year,
an estimate of the expected income to, and disbursements
to be made from, the Trust Fund during the current fiscal
year and each of the next 2 fiscal years, and a statement
of the actuarial status of the Trust Fund. Such report
shall be printed as a House document of the session of
the Congress to which the report is made.
(b) INVESTMENT.—It shall be the duty of the Man-
aging Trustee to invest such portion of the Trust Fund
as is not, in his judgment, required to meet current with-
drawals. Such investments may be made only in interest
bearing obligations of the United States or in obligations
guaranteed as to both principal and interest by the United
States. For such purpose such obligations may be acquired
(1) on original issue at the issue price, or (2) by purchase
of outstanding obligations at the market price. The pur-
poses for which obligations of the United States may be
issued under the Second Liberty Bond Act, as amended,
are hereby extended to authorize the issuance at par of
public debt obligations for purchase by the Trust Fund.
109
(c) ISSUANCE OF OBLIGATIONS.—Any obligations ac-
quired by the Trust Fund (except public debt obligations
issued exclusively to the Trust Fund) may be sold by the
Managing Trustee at the market price, and such public
debt obligations may be redeemed at par plus accrued in-
terest.
(d) PAYMENT OF INTEREST.—The interest on, and
the proceeds from the sale or redemption of, any obliga-
tions held in the Trust Fund shall be credited to and form
a part of the Trust Fund.
(e) PAYMENTS.—The Managing Trustee shall pay
from time to time from the Trust Fund such amounts as
the National Health Board certifies are necessary to carry
out this Act.
Subtitle C—Preparation of Plans
and Budgets
SEC. 521. DETERMINATION OF FUND AVAILABILITY.
(a) MAXIMUM FUNDS.—
(1) FIXING.—The National Health Board shall,
not later than January 1 of each year, initially fix
the maximum amount of funds which may (except as
provided in subsection (c)) be obligated during the
fiscal year beginning on October 1 of such year for
expenditure from the Trust Fund.
110
(2) LIMITATION.—Such amount shall not ex-
ceed for a fiscal year the lesser of—
(A) 140 percent of the expected net re-
ceipts during the fiscal year (as estimated by
the Secretary of the Treasury) from the taxes
imposed by sections 59 and 3111(b) of the In-
ternal Revenue Code of 1986;
(B) the amount of the aggregate obliga-
tions that the National Health Board deter-
mines were (or will be) incurred by the Service
from the Trust Fund during the previous fiscal
year, adjusted to reflect changes in the cost of
living, in the number of users, and in the capac-
ity of the Service to provide services under this
Act. (C) the amount fixed under subsection (b).
(3) REFIXING.—The National Health Board
may at any time refix such amount to reflect
changes—
(A) of one percent or more in the expected
net tax receipts (described in paragraph
(2)(A)); or
(B) of five percent or more in the cost of
living, number of users, or the capacity of the
Service to provide services under this Act.
111
The National Health Board shall promptly report to
Congress any increase made in such amount and the
reasons therefor.
(b) LESSER AMOUNT.—The National Health Board
shall fix in a fiscal year an amount, which the maximum
amount described in subsection (a)(1) may not exceed in
the fiscal year, which is less than the amount described
in subsection (a)(2)(A) if the Board determines that—
(1) restriction of the amount to be made avail-
able for obligation will not materially impair the ade-
quacy or quality of health care and supplemental
services provided to users, or
(2) improvement in the organization, delivery,
or utilization of such services has lessened their ag-
gregate cost (or increase in such cost).
(c) OBLIGATION.—The National Health Board may
obligate for expenditure from the Trust Fund, in addition
to the maximum amount which may be obligated in a fis-
cal year under subsection (a), such funds as are necessary
to provide health care and supplemental services needed
because of an epidemic, disaster, or other occurrence
which was not, and could not have been, reasonably
planned for by the Board and for which the contingency
fund provided in section 532(b)(7) is insufficient. The Na-
tional Health Board shall promptly report to Congress any
112
obligation made pursuant to this subsection and the rea-
sons therefor.
(d) OBLIGATION OF BORROWED AMOUNTS.—In addi-
tion to the maximum amounts which may be obligated
pursuant to subsection (a), the National Health Board
may allocate funds borrowed in accordance with section
541 for such purposes as it deems necessary and appro-
priate.
SEC. 522. PREPARATION OF REGIONAL BUDGETS.
(a) POPULATION NEED.—In preparing its annual
budget the National Health Board, in coordination with
its local and regional authorities, shall determine the pro-
jected per capita health expenditures for each region,
based on the evaluation of health care needs described in
this Act.
(b) BUDGET BREAKDOWNS.—In preparing its annual
budget the National Health Board shall specify its oper-
ating, prevention, capital, and research expenses antici-
pated for the fiscal year covered by the budget and for
the 5-year period beginning with such fiscal year for each
such region.
113
Subtitle D—Allocation and
Distribution of Funds
SEC. 531. NATIONAL BUDGET.
(a) PREPARATION.—The National Health Board
shall prepare, taking into consideration the budgets pre-
pared under section 522, as soon after April 1 of each
year as is practicable, a national health budget for the fis-
cal year beginning on October 1 of such year. Such budget
shall divide the total funds available for obligation in such
year, as determined under section 521, into funds for—
(1) ordinary operating expenses;
(2) preventive health measures, and which
measures shall include primary prevention to im-
prove the conditions under which people live that af-
fect health status;
(3) capital expenses;
(4) research expenses; and
(5) special operating expenses, as described in
section 532.
(b) ORDINARY OPERATING EXPENSES.—Funds for
ordinary operating expenses, for preventive health meas-
ures, and for research expenses shall be divided among
regions in the proportion which the number of residents
in each region bears to the total population of the Nation,
adjusted for population need as defined in this Act.
114
(c) CAPITAL EXPENSES.—Funds for capital expenses
shall be allocated, to the extent consistent with the effi-
cient and equitable use of resources, except that during
the first 10 fiscal years following the effective date of
health services, priority shall be given to regions lacking
adequate health care facilities on such effective date.
SEC. 532. SPECIAL OPERATING EXPENSE FUND.
(a) IN GENERAL.—A fund for special operating ex-
penses shall be incorporated into each budget prepared by
the National Health Board. For the purposes of this title,
the term ‘‘special operating expenses’’ means operating ex-
penses associated with—
(1) the care and treatment of users 65 years of
age or older;
(2) the care and treatment of persons confined
to full-time residential care institutions, including
nursing homes and facilities for the treatment of
mental illness;
(3) the special health care needs of low-income
users;
(4) the special health care needs of communities
of color that experience disparities in health status
compared to white populations;
115
(5) the special health care needs of residents of
rural or frontier areas, or noncontiguous States and
territories;
(6) special health care needs arising from envi-
ronmental or occupational health conditions;
(7) special health care needs arising from unex-
pected occurrences, including epidemics and natural
disasters; and
(8) the conduct of environmental health inspec-
tion and monitoring services.
(b) ALLOCATION.—The special operating expense
fund shall be allocated as follows:
(1) Funds for the additional operating expenses
associated with the care and treatment of users 65
years of age or older shall be allocated and shall con-
sist of uniform basic capitation amounts multiplied
by the number of residents 65 years of age or older
in the respective areas. The basic capitation
amounts for areas shall be determined by the Na-
tional Health Board, based upon studies of the addi-
tional operating expenses associated with the care
and treatment of such residents in such areas.
(2) Funds for the additional operating expenses
associated with the care and treatment of persons
confined to full-time residential care institutions
116
shall be allocated and shall consist of a uniform
basic capitation amount for each kind of institution,
multiplied by the number of residents in such insti-
tutions in the respective areas. The basic capitation
amounts shall be determined by the National Health
Board, based upon studies of the additional oper-
ating expenses associated with the care and treat-
ment of such persons and the maintenance of such
institutions.
(3) Funds shall be allocated to areas for the ad-
ditional operating expenses associated with the spe-
cial health care needs of low-income persons. Such
payments shall be allocated in proportion to the
number of residents in these areas having incomes
below the poverty level (as defined by the Secretary
of Commerce). The total funds allocated for this
purpose shall be no less than 2 percent of the ordi-
nary operating expense funds allocated in accord-
ance with section 531(a).
(4) Funds shall be allocated for the additional
operating expenses associated with the special health
care needs of communities of color to the extent that
they experience disparities in health status compared
to white populations. The basic capitation amounts
shall be determined by the National Health Board,
117
based upon studies of the additional operating ex-
penses associated with providing the necessary or
appropriate health services for communities of color,
and the additional expenses associated with elimi-
nating such disparities in health status.
(5) Funds for the additional operating expenses
associated with the special health care needs of resi-
dents of rural or frontier areas, or noncontiguous
States and territories, shall be allocated to commu-
nities serving areas of low population density and
shall consist of basic capitation amounts multiplied
by the number of residents in the respective areas.
The basic capitation amounts shall be determined by
the National Health Board based upon studies of
the additional operating expenses associated with the
provision of health care in areas of low population
density or extreme geographic access barriers, or
both.
(6) Funds for the additional operating expenses
associated with special regional health care needs
arising from environmental and occupational health
problems shall be allocated by the National Health
Board in accordance with its determination of such
special needs. The total funds allocated for this pur-
pose shall be no greater than 1⁄2 of 1 percent of the
118
ordinary operating expense funds allocated in ac-
cordance with section 531(a).
(7) Funds for the additional operating expenses
associated with special health care needs arising
from unexpected occurrences shall be retained by the
National Health Board in a contingency fund and
shall be allocated by the National Health Board in
accordance with its determination of such needs.
The total funds retained for this purpose in any one
fiscal year shall be no greater than 1⁄2 of 1 percent
of the ordinary operating expense funds allocated in
such year in accordance with section 531(a).
(8) Funds for the additional operating expenses
associated with the conduct of environmental health
inspection and monitoring services shall be allocated
by the National Health Board for providing such
services.
SEC. 533. DISTRIBUTION OF FUNDS.
(a) IN GENERAL.—Funds allocated under the na-
tional health budget shall be distributed by the National
Health Board from the Trust Fund. Participating pro-
viders may not request or receive funds from any other
source.
(b) PAYMENTS AND EXPENDITURES.—All payments
shall be expended in accordance with the budget adopted
119
under section 531. If the budget for any fiscal year is not
adopted before the beginning of the fiscal year, until such
budget is adopted the National Health Service shall con-
tinue to receive ordinary operating expense funds, preven-
tion expense funds, and research expense funds at the rate
at which it was receiving such funds during the preceding
fiscal year, and it shall receive special operating expense
funds in accordance with section 532.
(c) ACCOUNTS.—The National Health Board shall
maintain separate accounts for—
(1) funds for operating expenses, including or-
dinary operating expenses and special operating ex-
penses;
(2) funds for preventive health measures;
(3) funds for capital expenses; and
(4) funds for research expenses.
Funds in a capital expense account shall be expended only
for capital expenses. Funds in a research expense account
shall be expended only for operations, equipment, and fa-
cilities for health and health care delivery research con-
ducted in accordance with subtitle C of title IV. Separate
accounts shall not be required for funds for ordinary oper-
ating expenses and for special operating expenses.
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.
121
(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
122
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—
123
(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).
124
(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
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.
126
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.
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.
128
(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).
129
(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.
130
(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
131
(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;
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-
133
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
134
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-
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.—Section 1105 of
title 31, United States Code, is amended by adding at the
end the following new subsection:
‘‘(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