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the health center for which the project is
undertaken has for required primary
health services and additional health serv-
ices;
‘‘(ii) the design of a health center pro-
gram for such population based on such
assessment;
‘‘(iii) efforts to secure, within the pro-
posed catchment area of such center, fi-
nancial and professional assistance and
support for the project;
‘‘(iv) initiation and encouragement of
continuing community involvement in the
development and operation of the project;
and
‘‘(v) proposed linkages between the
center and other appropriate provider enti-
ties, such as health departments, local hos-
pitals, and rural health clinics, to provide
better coordinated, higher quality, and
more cost-effective health care services.
‘‘(B) COMPREHENSIVE SERVICE DELIVERY
NETWORKS
AND
PLANS.—The Secretary may
make grants to health centers that receive as-
sistance under this section to enable the centers
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to plan and develop a network or plan for the
provision of health services, which may include
the provision of health services on a prepaid
basis or through another managed care ar-
rangement, to some or to all of the individuals
which the centers serve. Such a grant may only
be made for such a center if—
‘‘(i) the center has received grants
under subsection (d)(1)(A) for at least 2
consecutive years preceding the year of the
grant under this subparagraph or has oth-
erwise demonstrated, as required by the
Secretary, that such center has been pro-
viding primary care services for at least
the 2 consecutive years immediately pre-
ceding such year; and
‘‘(ii) the center provides assurances
satisfactory to the Secretary that the pro-
vision of such services on a prepaid basis,
or under another managed care arrange-
ment, will not result in the diminution of
the level or quality of health services pro-
vided to the medically underserved popu-
lation served prior to the grant under this
subparagraph.
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Any such grant may include the acquisition and
lease, expansion, and modernization of existing
buildings, construction of new buildings, acqui-
sition or lease of equipment which may include
data and information systems, and providing
training and technical assistance related to the
provision of health services on a prepaid basis
or under another managed care arrangement,
and for other purposes that promote the devel-
opment of managed care networks and plans.
‘‘(2) LIMITATION.—Not more than two grants
may be made under this subsection for the same
project, except that upon a showing of good cause,
the Secretary may make additional grant awards.
‘‘(d) OPERATING GRANTS.—
‘‘(1) AUTHORITY.—
‘‘(A) IN
GENERAL.—The Secretary may
make grants for the costs of the operation of
public and nonprofit private health centers that
provide health services to medically underserved
populations.
‘‘(B) ENTITIES THAT FAIL TO MEET CER-
TAIN
REQUIREMENTS.—The Secretary may
make grants, for a period of not to exceed 2-
years, for the costs of the operation of public
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and nonprofit private entities which provide
health services to medically underserved popu-
lations but with respect to which the Secretary
is unable to make each of the determinations
required by subsection (i)(3).
‘‘(2) USE OF FUNDS.—The costs for which a
grant may be made under subparagraph (A) or (B)
of paragraph (1) may include the costs of acquiring,
expanding, and modernizing existing buildings and
constructing new buildings (including the costs of
amortizing the principal of, and paying interest on,
loans), the costs of repaying loans for buildings, and
the costs of providing training related to the provi-
sion of required primary health services and addi-
tional health services and to the management of
health center programs.
‘‘(3) LIMITATION.—Not more than two grants
may be made under subparagraph (B) of paragraph
(1) for the same entity.
‘‘(4) AMOUNT.—
‘‘(A) IN GENERAL.—The amount of any
grant made in any fiscal year under paragraph
(1) to a health center shall be determined by
the Secretary, but may not exceed the amount
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by which the costs of operation of the center in
such fiscal year exceed the total of—
‘‘(i) State, local, and other operational
funding provided to the center; and
‘‘(ii) the fees, premiums, and third-
party reimbursements, which the center
may reasonably be expected to receive for
its operations in such fiscal year.
‘‘(B) PAYMENTS.—Payments under grants
under subparagraph (A) or (B) of paragraph
(1) shall be made in advance or by way of reim-
bursement and in such installments as the Sec-
retary finds necessary and adjustments may be
made for overpayments or underpayments.
‘‘(C) 
USE
OF
NONGRANT
FUNDS.—
Nongrant funds described in clauses (i) and (ii)
of subparagraph (A), including any such funds
in excess of those originally expected, shall be
used as permitted under this section, and may
be used for such other purposes as are not spe-
cifically prohibited under this section if such
use furthers the objectives of the project.
‘‘(e) INFANT MORTALITY GRANTS.—
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‘‘(1) IN GENERAL.—The Secretary may make
grants to health centers for the purpose of assisting
such centers in—
‘‘(A) providing comprehensive health care
and support services for the reduction of—
‘‘(i) the incidence of infant mortality;
and
‘‘(ii) morbidity among children who
are less than 3 years of age; and
‘‘(B) developing and coordinating service
and referral arrangements between health cen-
ters and other entities for the health manage-
ment of pregnant women and children described
in subparagraph (A).
‘‘(2) PRIORITY.—In making grants under this
subsection the Secretary shall give priority to health
centers providing services to any medically under-
served population among which there is a substantial
incidence of infant mortality or among which there
is a significant increase in the incidence of infant
mortality.
‘‘(3) REQUIREMENTS.—The Secretary may
make a grant under this subsection only if the
health center involved agrees that—
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‘‘(A) the center will coordinate the provi-
sion of services under the grant to each of the
recipients of the services;
‘‘(B) such services will be continuous for
each such recipient;
‘‘(C) the center will provide follow-up serv-
ices for individuals who are referred by the cen-
ter for services described in paragraph (1);
‘‘(D) the grant will be expended to supple-
ment, and not supplant, the expenditures of the
center for primary health services (including
prenatal care) with respect to the purpose de-
scribed in this subsection; and
‘‘(E) the center will coordinate the provi-
sion of services with other maternal and child
health providers operating in the catchment
area.
‘‘(f) MIGRATORY
AND SEASONAL AGRICULTURAL
WORKERS.—
‘‘(1) IN GENERAL.—The Secretary may award
grants for the purposes described in subsections (c),
(d), and (e) for the planning and delivery of services
to a special medically underserved population com-
prised of—
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‘‘(A) migratory agricultural workers, sea-
sonal agricultural workers, and members of the
families of such migratory and seasonal agricul-
tural workers who are within a designated
catchment area; and
‘‘(B) individuals who have previously been
migratory agricultural workers but who no
longer meet the requirements of subparagraph
(A) of paragraph (4) because of age or disabil-
ity and members of the families of such individ-
uals who are within such catchment area.
‘‘(2) ENVIRONMENTAL
CONCERNS.—The Sec-
retary may enter into grants or contracts under this
subsection with public and private entities to—
‘‘(A) assist the States in the implementa-
tion and enforcement of acceptable environ-
mental health standards, including enforcement
of standards for sanitation in migratory agricul-
tural worker labor camps, and applicable Fed-
eral and State pesticide control standards; and
‘‘(B) conduct projects and studies to assist
the several States and entities which have re-
ceived grants or contracts under this section in
the assessment of problems related to camp and
field sanitation, exposure to unsafe levels of ag-
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ricultural chemicals including pesticides, and
other environmental health hazards to which
migratory agricultural workers and members of
their families are exposed.
‘‘(3) DEFINITIONS.—For purposes of this sub-
section:
‘‘(A) MIGRATORY
AGRICULTURAL
WORK-
ER.—The term ‘migratory agricultural worker’
means an individual whose principal employ-
ment is in agriculture on a seasonal basis, who
has been so employed within the last 24
months, and who establishes for the purposes of
such employment a temporary abode.
‘‘(B) SEASONAL
AGRICULTURAL
WORK-
ER.—The term ‘seasonal agricultural worker’
means an individual whose principal employ-
ment is in agriculture on a seasonal basis and
who is not a migratory agricultural worker.
‘‘(C) 
AGRICULTURE.—The 
term 
‘agri-
culture’ means farming in all its branches, in-
cluding—
‘‘(i) cultivation and tillage of the soil;
‘‘(ii) the production, cultivation, grow-
ing, and harvesting of any commodity
grown on, in, or as an adjunct to or part
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of a commodity grown in or on, the land;
and
‘‘(iii) any practice (including prepara-
tion and processing for market and deliv-
ery to storage or to market or to carriers
for transportation to market) performed by
a farmer or on a farm incident to or in
conjunction with an activity described in
clause (ii).
‘‘(g) HOMELESS POPULATION.—
‘‘(1) IN GENERAL.—The Secretary may award
grants for the purposes described in subsections (c),
(d), and (e) for the planning and delivery of services
to a special medically underserved population com-
prised of homeless individuals, including grants for
innovative programs that provide outreach and com-
prehensive primary health services to homeless chil-
dren and children at risk of homelessness.
‘‘(2) REQUIRED SERVICES.—In addition to re-
quired primary health services (as defined in sub-
section (b)(1)), an entity that receives a grant under
this subsection shall be required to provide sub-
stance abuse services as a condition of such grant.
‘‘(3) SUPPLEMENT
NOT
SUPPLANT
REQUIRE-
MENT.—A grant awarded under this subsection shall
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be expended to supplement, and not supplant, the
expenditures of the health center and the value of in
kind contributions for the delivery of services to the
population described in paragraph (1).
‘‘(4) DEFINITIONS.—For purposes of this sec-
tion:
‘‘(A) HOMELESS
INDIVIDUAL.—The term
‘homeless individual’ means an individual who
lacks housing (without regard to whether the
individual is a member of a family), including
an individual whose primary residence during
the night is a supervised public or private facil-
ity that provides temporary living accommoda-
tions and an individual who is a resident in
transitional housing.
‘‘(B) SUBSTANCE ABUSE.—The term ‘sub-
stance abuse’ has the same meaning given such
term in section 534(4).
‘‘(C) SUBSTANCE ABUSE SERVICES.—The
term ‘substance abuse services’ includes detoxi-
fication and residential treatment for substance
abuse provided in settings other than hospitals.
‘‘(h) RESIDENTS OF PUBLIC HOUSING.—
‘‘(1) IN GENERAL.—The Secretary may award
grants for the purposes described in subsections (c),
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(d), and (e) for the planning and delivery of services
to a special medically underserved population com-
prised of residents of public housing (such term, for
purposes of this subsection, shall have the same
meaning given such term in section 3(b)(1) of the
United States Housing Act of 1937) and individuals
living in areas immediately accessible to such public
housing.
‘‘(2) SUPPLEMENT
NOT
SUPPLANT.—A grant
awarded under this subsection shall be expended to
supplement, and not supplant, the expenditures of
the health center and the value of in kind contribu-
tions for the delivery of services to the population
described in paragraph (1).
‘‘(3) CONSULTATION
WITH
RESIDENTS.—The
Secretary may not make a grant under paragraph
(1) unless, with respect to the residents of the public
housing involved, the applicant for the grant—
‘‘(A) has consulted with the residents in
the preparation of the application for the grant;
and
‘‘(B) agrees to provide for ongoing con-
sultation with the residents regarding the plan-
ning and administration of the program carried
out with the grant.
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‘‘(i) APPLICATIONS.—
‘‘(1) SUBMISSION.—No grant may be made
under this section unless an application therefore is
submitted to, and approved by, the Secretary. Such
an application shall be submitted in such form and
manner and shall contain such information as the
Secretary shall prescribe.
‘‘(2) DESCRIPTION OF NEED.—An application
for a grant under subparagraph (A) or (B) of sub-
section (d)(1) for a health center shall include—
‘‘(A) a description of the need for health
services in the catchment area of the center;
‘‘(B) a demonstration by the applicant that
the area or the population group to be served
by the applicant has a shortage of personal
health services; and
‘‘(C) a demonstration that the center will
be located so that it will provide services to the
greatest number of individuals residing in the
catchment area or included in such population
group.
Such a demonstration shall be made on the basis of
the criteria prescribed by the Secretary under sub-
section (b)(3) or on any other criteria which the Sec-
retary may prescribe to determine if the area or pop-
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ulation group to be served by the applicant has a
shortage of personal health services. In considering
an application for a grant under subparagraph (A)
or (B) of subsection (d)(1), the Secretary may re-
quire as a condition to the approval of such applica-
tion an assurance that the applicant will provide any
health service defined under paragraphs (1) and (2)
of subsection (b) that the Secretary finds is needed
to meet specific health needs of the area to be served
by the applicant. Such a finding shall be made in
writing and a copy shall be provided to the appli-
cant.
‘‘(3) REQUIREMENTS.—Except as provided in
subsection (d)(1)(B), the Secretary may not approve
an application for a grant under subparagraph (A)
or (B) of subsection (d)(1) unless the Secretary de-
termines that the entity for which the application is
submitted is a health center (within the meaning of
subsection (a)) and that—
‘‘(A) the required primary health services
of the center will be available and accessible in
the catchment area of the center promptly, as
appropriate, and in a manner which assures
continuity;
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‘‘(B) the center will have an ongoing qual-
ity improvement system that includes clinical
services and management, and that maintains
the confidentiality of patient records;
‘‘(C) the center will demonstrate its finan-
cial responsibility by the use of such accounting
procedures and other requirements as may be
prescribed by the Secretary;
‘‘(D) the center—
‘‘(i) has or will have a contractual or
other arrangement with the agency of the
State, in which it provides services, which
administers or supervises the administra-
tion of a State plan approved under title
XIX of the Social Security Act for the pay-
ment of all or a part of the center’s costs
in providing health services to persons who
are eligible for medical assistance under
such a State plan; or
‘‘(ii) has made or will make every rea-
sonable effort to enter into such an ar-
rangement;
‘‘(E) the center has made or will make and
will continue to make every reasonable effort to
collect appropriate reimbursement for its costs
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in providing health services to persons who are
entitled to insurance benefits under title XVIII
of the Social Security Act, to medical assistance
under a State plan approved under title XIX of
such Act, or to assistance for medical expenses
under any other public assistance program or
private health insurance program;
‘‘(F) the center—
‘‘(i) has prepared a schedule of fees or
payments for the provision of its services
consistent with locally prevailing rates or
charges and designed to cover its reason-
able costs of operation and has prepared a
corresponding schedule of discounts to be
applied to the payment of such fees or pay-
ments, which discounts are adjusted on the
basis of the patient’s ability to pay;
‘‘(ii) has made and will continue to
make every reasonable effort—
‘‘(I) to secure from patients pay-
ment for services in accordance with
such schedules; and
‘‘(II) to collect reimbursement for
health services to persons described in
subparagraph (E) on the basis of the
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full amount of fees and payments for
such services without application of
any discount; and
‘‘(iii) has submitted to the Secretary
such reports as the Secretary may require
to determine compliance with this subpara-
graph;
‘‘(G) the center has established a govern-
ing board which except in the case of an entity
operated by an Indian tribe or tribal or Indian
organization under the Indian Self-Determina-
tion Act—
‘‘(i) is composed of individuals, a ma-
jority of whom are being served by the cen-
ter and who, as a group, represent the in-
dividuals being served by the center;
‘‘(ii) meets at least once a month, se-
lects the services to be provided by the cen-
ter, schedules the hours during which such
services will be provided, approves the cen-
ter’s annual budget, approves the selection
of a director for the center, and, except in
the case of a governing board of a public
center (as defined in the second sentence
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of this paragraph), establishes general poli-
cies for the center; and
‘‘(iii) in the case of an application for
a second or subsequent grant for a public
center, has approved the application or if
the governing body has not approved the
application, the failure of the governing
body to approve the application was unrea-
sonable;
except that, upon a showing of good cause the
Secretary shall waive all or part of the require-
ments of this subparagraph in the case of a
health center that receives a grant pursuant to
subsection (f), (g), (h), or (o);
‘‘(H) the center has developed—
‘‘(i) an overall plan and budget that
meets the requirements of the Secretary;
and
‘‘(ii) an effective procedure for compil-
ing and reporting to the Secretary such
statistics and other information as the Sec-
retary may require relating to—
‘‘(I) the costs of its operations;
‘‘(II) the patterns of use of its
services;
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‘‘(III) the availability, accessibil-
ity, and acceptability of its services;
and
‘‘(IV) such other matters relating
to operations of the applicant as the
Secretary may require;
‘‘(I) the center will review periodically its
catchment area to—
‘‘(i) ensure that the size of such area
is such that the services to be provided
through the center (including any satellite)
are available and accessible to the resi-
dents of the area promptly and as appro-
priate;
‘‘(ii) ensure that the boundaries of
such area conform, to the extent prac-
ticable, to relevant boundaries of political
subdivisions, school districts, and Federal
and State health and social service pro-
grams; and
‘‘(iii) ensure that the boundaries of
such area eliminate, to the extent possible,
barriers to access to the services of the
center, including barriers resulting from
the area’s physical characteristics, its resi-
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dential patterns, its economic and social
grouping, and available transportation;
‘‘(J) in the case of a center which serves
a population including a substantial proportion
of individuals of limited English-speaking abil-
ity, the center has—
‘‘(i) developed a plan and made ar-
rangements responsive to the needs of such
population for providing services to the ex-
tent practicable in the language and cul-
tural context most appropriate to such in-
dividuals; and
‘‘(ii) identified an individual on its
staff who is fluent in both that language
and in English and whose responsibilities
shall include providing guidance to such in-
dividuals and to appropriate staff members
with respect to cultural sensitivities and
bridging linguistic and cultural differences;
and
‘‘(K) the center, has developed an ongoing
referral relationship with one or more hospitals.
For purposes of subparagraph (G), the term ‘public
center’ means a health center funded (or to be fund-
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ed) through a grant under this section to a public
agency.
‘‘(4) APPROVAL OF NEW OR EXPANDED SERV-
ICE
APPLICATIONS.—The Secretary shall approve
applications for grants under subparagraph (A) or
(B) of subsection (d)(1) for health centers which—
‘‘(A) have not received a previous grant
under such subsection; or
‘‘(B) have applied for such a grant to ex-
pand their services;
in such a manner that the ratio of the medically un-
derserved populations in rural areas which may be
expected to use the services provided by such centers
to the medically underserved populations in urban
areas which may be expected to use the services pro-
vided by such centers is not less than two to three
or greater than three to two.
‘‘(5) NEW CONSTRUCTION.—The Secretary may
make a grant under subsection (c) or (d) for the
construction of new buildings for a health center
only if the Secretary determines that appropriate fa-
cilities are not available through acquiring, mod-
ernizing, or expanding existing buildings and that
the entity to which the grant will be made has made
reasonable efforts to secure from other sources
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funds, in lieu of the grant, to construct such facili-
ties.
‘‘(j) TECHNICAL
AND OTHER ASSISTANCE.—The
Secretary may provide (either through the Department of
Health and Human Services or by grant or contract) all
necessary technical and other nonfinancial assistance (in-
cluding fiscal and program management assistance and
training in such management) to any public or private
nonprofit entity to assist entities in developing plans for,
or operating as, health centers, and in meeting the re-
quirements of subsection (i)(2).
‘‘(k) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(1) IN GENERAL.—For the purpose of carry-
ing out this section there are authorized to be appro-
priated $756,518,000 for fiscal year 1997, and such
sums as may be necessary for each of the fiscal
years 1998 through 2001.
‘‘(2) SPECIAL PROVISIONS.—
‘‘(A) PUBLIC
CENTERS.—The Secretary
may not expend in any fiscal year, for grants
under this section to public centers (as defined
in the second sentence of subsection (i)(3)) the
governing boards of which (as described in sub-
section (i)(3)(G)(ii)) do not establish general
policies for such centers, an amount which ex-
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ceeds 5 percent of the amounts appropriated
under this section for that fiscal year. For pur-
poses of applying the preceding sentence, the
term ‘public centers’ shall not include health
centers that receive grants pursuant to sub-
section (g) or (h).
‘‘(B) DISTRIBUTION OF GRANTS.—
‘‘(i) FISCAL YEAR 1997.—For fiscal
year 1997, the Secretary, in awarding
grants under this section shall ensure that
the amounts made available under each of
subsections (f), (g), and (h) in such fiscal
year bears the same relationship to the
total amount appropriated for such fiscal
year under paragraph (1) as the amounts
appropriated for fiscal year 1996 under
each of sections 329, 340, and 340A (as
such sections existed one day prior to the
date of enactment of this section) bears to
the total amount appropriated under sec-
tions 329, 330, 340, and 340A (as such
sections existed one day prior to the date
of enactment of this section) for such fiscal
year.
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‘‘(ii) FISCAL YEARS 1998 AND 1999.—
For each of the fiscal years 1998 and
1999, the Secretary, in awarding grants
under this section shall ensure that the
proportion of the amounts made available
under each of subsections (f), (g), and (h)
is equal to the proportion of amounts made
available under each such subsection for
the previous fiscal year, as such amounts
relate to the total amounts appropriated
for the previous fiscal year involved, in-
creased or decreased by not more than 10
percent.
‘‘(3) FUNDING REPORT.—The Secretary shall
annually prepare and submit to the appropriate com-
mittees of Congress a report concerning the distribu-
tion of funds under this section that are provided to
meet the health care needs of medically underserved
populations, including the homeless, residents of
public housing, and migratory and seasonal agricul-
tural workers, and the appropriateness of the deliv-
ery systems involved in responding to the needs of
the particular populations. Such report shall include
an assessment of the relative health care access
needs of the targeted populations and the rationale
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for any substantial changes in the distribution of
funds.
‘‘(l) MEMORANDUM
OF AGREEMENT.—In carrying
out this section, the Secretary may enter into a memoran-
dum of agreement with a State. Such memorandum may
include, where appropriate, provisions permitting such
State to—
‘‘(1) analyze the need for primary health serv-
ices for medically underserved populations within
such State;
‘‘(2) assist in the planning and development of
new health centers;
‘‘(3) review and comment upon annual program
plans and budgets of health centers, including com-
ments upon allocations of health care resources in
the State;
‘‘(4) assist health centers in the development of
clinical practices and fiscal and administrative sys-
tems through a technical assistance plan which is re-
sponsive to the requests of health centers; and
‘‘(5) share information and data relevant to the
operation of new and existing health centers.
‘‘(m) RECORDS.—
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‘‘(1) IN GENERAL.—Each entity which receives
a grant under subsection (d) shall establish and
maintain such records as the Secretary shall require.
‘‘(2) AVAILABILITY.—Each entity which is re-
quired to establish and maintain records under this
subsection shall make such books, documents, pa-
pers, and records available to the Secretary or the
Comptroller General of the United States, or any of
their duly authorized representatives, for examina-
tion, copying or mechanical reproduction on or off
the premises of such entity upon a reasonable re-
quest therefore. The Secretary and the Comptroller
General of the United States, or any of their duly
authorized representatives, shall have the authority
to conduct such examination, copying, and reproduc-
tion.
‘‘(n) DELEGATION OF AUTHORITY.—The Secretary
may delegate the authority to administer the programs au-
thorized by this section to any office within the Service,
except that the authority to enter into, modify, or issue
approvals with respect to grants or contracts may be dele-
gated only within the Health Resources and Services Ad-
ministration.
‘‘(o) SPECIAL CONSIDERATION.—In making grants
under this section, the Secretary shall give special consid-
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eration to the unique needs of sparsely populated rural
areas, including priority in the awarding of grants for new
health centers under subsections (c) and (d), and the
granting of waivers as appropriate and permitted under
subsections (b)(1)(B)(i) and (i)(3)(G).’’.
SEC. 3. RURAL HEALTH OUTREACH, NETWORK DEVELOP-
MENT, 
AND 
TELEMEDICINE 
GRANT 
PRO-
GRAM.
(a) IN GENERAL.—Subpart I of part D of title III
of the Public Health Service Act (42 U.S.C. 254b et seq.)
(as amended by section 2) is further amended by adding
at the end thereof the following new section:
‘‘SEC. 330A. RURAL HEALTH OUTREACH, NETWORK DEVEL-
OPMENT, AND TELEMEDICINE GRANT PRO-
GRAM.
‘‘(a) ADMINISTRATION.—The rural health services
outreach demonstration grant program established under
section 301 shall be administered by the Office of Rural
Health Policy (of the Health Resources and Services Ad-
ministration), in consultation with State rural health of-
fices or other appropriate State governmental entities.
‘‘(b) GRANTS.—Under the program referred to in
subsection (a), the Secretary, acting through the Director
of the Office of Rural Health Policy, may award grants
to expand access to, coordinate, restrain the cost of, and
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improve the quality of essential health care services, in-
cluding preventive and emergency services, through the
development of integrated health care delivery systems or
networks in rural areas and regions.
‘‘(c) ELIGIBLE NETWORKS.—
‘‘(1) OUTREACH NETWORKS.—To be eligible to
receive a grant under this section, an entity shall—
‘‘(A) be a rural public or nonprofit private
entity that is or represents a network or poten-
tial network that includes three or more health
care providers or other entities that provide or
support the delivery of health care services; and
‘‘(B) in consultation with the State office
of rural health or other appropriate State en-
tity, prepare and submit to the Secretary an ap-
plication, at such time, in such manner, and
containing such information as the Secretary
may require, including—
‘‘(i) a description of the activities
which the applicant intends to carry out
using amounts provided under the grant;
‘‘(ii) a plan for continuing the project
after Federal support is ended;
‘‘(iii) a description of the manner in
which the activities funded under the grant
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will meet health care needs of underserved
rural populations within the State; and
‘‘(iv) a description of how the local
community or region to be served by the
network or proposed network will be in-
volved in the development and ongoing op-
erations of the network.
‘‘(2) FOR-PROFIT ENTITIES.—An eligible net-
work may include for-profit entities so long as the
network grantee is a nonprofit entity.
‘‘(3) TELEMEDICINE NETWORKS.—
‘‘(A) IN GENERAL.—An entity that is a
health care provider and a member of an exist-
ing or proposed telemedicine network, or an en-
tity that is a consortium of health care provid-
ers that are members of an existing or proposed
telemedicine network shall be eligible for a
grant under this section.
‘‘(B) REQUIREMENT.—A telemedicine net-
work referred to in subparagraph (A) shall, at
a minimum, be composed of—
‘‘(i) a multispecialty entity that is lo-
cated in an urban or rural area, which can
provide 24-hour a day access to a range of
specialty care; and
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‘‘(ii) at least two rural health care fa-
cilities, which may include rural hospitals,
rural physician offices, rural health clinics,
rural community health clinics, and rural
nursing homes.
‘‘(d) PREFERENCE.—In awarding grants under this
section, the Secretary shall give preference to applicant
networks that include—
‘‘(1) a majority of the health care providers
serving in the area or region to be served by the net-
work;
‘‘(2) any federally qualified health centers, rural
health clinics, and local public health departments
serving in the area or region;
‘‘(3) outpatient mental health providers serving
in the area or region; or
‘‘(4) appropriate social service providers, such
as agencies on aging, school systems, and providers
under the women, infants, and children program, to
improve access to and coordination of health care
services.
‘‘(e) USE OF FUNDS.—
‘‘(1) IN
GENERAL.—Amounts provided under
grants awarded under this section shall be used—
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‘‘(A) for the planning and development of
integrated self-sustaining health care networks;
and
‘‘(B) for the initial provision of services.
‘‘(2) EXPENDITURES IN RURAL AREAS.—
‘‘(A) IN GENERAL.—In awarding a grant
under this section, the Secretary shall ensure
that not less than 50 percent of the grant
award is expended in a rural area or to provide
services to residents of rural areas.
‘‘(B) TELEMEDICINE NETWORKS.—An en-
tity described in subsection (c)(3) may not use
in excess of—
‘‘(i) 40 percent of the amounts pro-
vided under a grant under this section to
carry 
out 
activities 
under 
paragraph
(3)(A)(iii); and
‘‘(ii) 20 percent of the amounts pro-
vided under a grant under this section to
pay for the indirect costs associated with
carrying out the purposes of such grant.
‘‘(3) TELEMEDICINE NETWORKS.—
‘‘(A) IN GENERAL.—An entity described in
subsection (c)(3), may use amounts provided
under a grant under this section to—
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‘‘(i) 
demonstrate 
the 
use 
of
telemedicine in facilitating the development
of rural health care networks and for im-
proving access to health care services for
rural citizens;
‘‘(ii) provide a baseline of information
for a systematic evaluation of telemedicine
systems serving rural areas;
‘‘(iii) purchase or lease and install
equipment; and
‘‘(iv) operate the telemedicine system
and evaluate the telemedicine system.
‘‘(B) LIMITATIONS.—An entity described
in subsection (c)(3), may not use amounts pro-
vided under a grant under this section—
‘‘(i) to build or acquire real property;
‘‘(ii) purchase or install transmission
equipment (such as laying cable or tele-
phone lines, microwave towers, satellite
dishes, amplifiers, and digital switching
equipment); or
‘‘(iii) for construction, except that
such funds may be expended for minor
renovations relating to the installation of
equipment;
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‘‘(f) TERM OF GRANTS.—Funding may not be pro-
vided to a network under this section for in excess of a
3-year period.
‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—For the
purpose of carrying out this section there are authorized
to be appropriated $36,000,000 for fiscal year 1997, and
such sums as may be necessary for each of the fiscal years
1998 through 2001.’’.
(b) TRANSITION.—The Secretary of Health and
Human Services shall ensure the continued funding of
grants made, or contracts or cooperative agreements en-
tered into, under subpart I of part D of title III of the
Public Health Service Act (42 U.S.C. 254b et seq.) (as
such subpart existed on the day prior to the date of enact-
ment of this Act), until the expiration of the grant period
or the term of the contract or cooperative agreement. Such
funding shall be continued under the same terms and con-
ditions as were in effect on the date on which the grant,
contract or cooperative agreement was awarded, subject
to the availability of appropriations.
SEC. 4. TECHNICAL AND CONFORMING AMENDMENTS.
(a) IN GENERAL.—The Public Health Service Act is
amended—
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(1) in section 224(g)(4) (42 U.S.C. 233(g)(4))
by striking ‘‘under’’ and all that follows through the
end thereof and inserting ‘‘under section 330.’’;
(2) in section 340C(a)(2) (42 U.S.C. 256c) by
striking ‘‘under’’ and all that follows through the
end thereof and inserting ‘‘with assistance provided
under section 330.’’; and
(3) by repealing subparts V and VI of part D
of title III (42 U.S.C. 256 et seq.).
(b) SOCIAL SECURITY ACT.—The Social Security Act
is amended—
(1) in clauses (i) and (ii)(I) of section
1861(aa)(4)(A) (42 U.S.C. 1395x(aa)(4)(A)(i) and
(ii)(I)) by striking ‘‘section 329, 330, or 340’’ and
inserting ‘‘section 330 (other than subsection (h))’’;
and
(2) in clauses (i) and (ii)(II) of section
1905(l)(2)(B) (42 U.S.C. 1396d(l)(2)(B)(i) and
(ii)(II)) by striking ‘‘section 329, 330, 340, or
340A’’ and inserting ‘‘section 330’’.
(c) REFERENCES.—Whenever any reference is made
in any provision of law, regulation, rule, record, or docu-
ment to a community health center, migrant health center,
public housing health center, or homeless health center,
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such reference shall be considered a reference to a health
center.
(d) ADDITIONAL AMENDMENTS.—After consultation
with the appropriate committees of the Congress, the Sec-
retary of Health and Human Services shall prepare and
submit to the Congress a legislative proposal in the form
of an implementing bill containing technical and conform-
ing amendments to reflect the changes made by this Act.
SEC. 5. EFFECTIVE DATE.
This Act and the amendments made by this Act shall
become effective on October 1, 1996.
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