An Act to improve the public health through revising, consolidating, and improving the hospital and other medical facilities provisions of the Public Health Service Act
PL 88-443 (H.R.10041), enacted 08/18/1964

78 STAT. ] 
PUBLIC LAW 88-443-AUG. 18, 1964 
447 
Public Law 88-443 
AN A C T 
August 18, 1964 
To improve the public healfh through revising, consolidating, and improving the 
[H. R. i004l] 
hospital and other medical facilities provisioas of the Public Health Service 
Act. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of Atnerlca in Congress assembled, Tliat this Act may ^j^°^''f p ^nl-
be cited as the "Hospital and Medical Facilities Amendments of ties Amendments 
1964". 
°f 1964. 
SEC. 2. Part B of title I I I of the Public Health Service Act (42 
IT.S.C. 24Ji, et seq.) is amended by inserting at the end thereof the 75^stat^*824^^' 
following new section: 
76 stat! nss. 
"SPECIAL PROJECT GRANTS FOR ASSISTING IN THE AREAWIDE PLANNING or 
HEALTH AND REI^VTED FACILITIES 
"SEC. 818. There are authorized to be appropriated $2,500,000 for 
the fiscal year ending June 30, 1965, and $5,000,000 for each of the 
next four fiscal years to enable the Surgeon General to make grants to 
the appropriate State agency or agencies designated in accordance with 
section 604(a) (1) to cover not to exceed 50 per centum of the costs of 
''°^'' P* ''^^• 
projects for developing (and from time to time revising) and super-
vising and assisting in the carrying out of comprehensive regional, 
metropolitan area, or other local area plans for coordination of exist-
ing and planned health facilities, and facilities related thereto, and 
services provided by such facilities." 
SEC. 3. (a) Title VI of the Public Health Service Act (42 U.S.C., 
(h. 6A, subch. IV) is amended to read as follows: 
'TITLE 
VI—ASSISTANCE 
FOR 
CONSTRITCTION 
AND 
MODERNIZATION OF HOSPITALS AND OTHER MEDI-
CAL FACILITIES 
'"DECLARATION OF PURIH)SE 
"SEC. 600, The j)urpose of this title is— 
"(a) to assist the several States in the carrying out of their 
programs for the construction and modernization of such public 
or other nonprofit community hospitals and other medical facili-
ties as may be necessary, in conjunction with existing facilities, 
to furnish adequate hospital, clinic, or similar services to all their 
people; 
"(b) to stimulate the development of new or improved types 
of physical facilities for medical, diagnostic, preventive, treat-
ment, or rehabilitative services; and 
"(c) to promote research, exi^eriments, and demonstrations 
relating to the effective development and utilization of hospital, 
clinic, or similar services, facilities, and resources, and to promote 
the coordination of such research, experiments, and demonstra-
tions and the useful application of their results. 
60 
Stat. 
1041; 
68 
Stat. 
461; 
72 
Stat. 489. 
448 
PUBLIC LAW 88-443-AUG. 18, 1964 
[78 STAT. 
"PART A—GRANTS AND LOANS FOR CONSTRUCTION AND MODERNIZATION 
OP HOSPITALS AND OTHER MEDICAL FACILITIES 
"AUTHORIZATION OF APPROPRIATIONS FOR CONSTRUCTION GRANTS 
"SEC. 601. In order to assist the States in carrying out the purposes 
of section 600, there are authorized to be appropriated— 
"(a) for the fiscal year ending June 30, 1965, and each of the 
next four fiscal years— 
"(1) $70,000,000 for grants for the construction of public 
or other nonprofit facilities for long-term care; 
"(2) $20,000,000 for grants for the construction of public 
or other nonprofit diagnostic or treatment centers; 
"(3) $10,000,000 for grants for the construction of public 
or other nonprofit rehabilitation facilities; 
"(b) for grants for the construction of public or other non-
profit hospitals and public health centers and for grants for mod-
ernization of such facilities and the facilities referred to in para-
graph (a), $150,000,000 for the fiscal year ending June 30, 1965, 
$160,000,000 for the fiscal year ending June 30, 1966, $170,000,000 
for the fiscal year ending June 30, 1967, and $180,000,000 each 
for the next two fiscal years. 
"STATE ALLOTMENTS 
"SEC. 602. (a) (1) Each State shall be entitled for each fiscal year 
to an allotment bearing the same ratio to the sums appropriated for 
such year pursuant to subparagraphs (1), (2), and (3), respectively, 
of section 601(a), and to an allotment bearing the same ratio to the 
new hospital portion of the sums appropriated for such year pursuant 
to section 601 (b), as the product of— 
"(A) the population of such State, and 
"(B) the square of its allotment percentage, 
bears to the sum of the corresponding products for all of the States. 
As used in this paragraph, the new^ hospital portion of sums appro-
priated pursuant to section 601(b) (which portion shall be available 
for grants for the construction of public or other nonprofit hospitals 
and public health centers) is 100 per centum of such sums in the case 
of the fiscal year ending June 30, 1965, seven-eighths thereof in the 
case of the first fiscal year thereafter, twenty-seven thirty-fourths 
thereof in the case of the second fiscal year thereafter, thirteen-
eighteenths thereof in the case of the third fiscal year thereafter, 
twenty-five thirty-sixths thereof in the case of the fourth fiscal year 
thereafter. 
" (2) For each fiscal year beginning after June 30,1965, the Surgeon 
General shall, in accordance with regulations, make allotments from 
the remainder of the sums appropriated pursuant to section 601(b) 
(which portion shall be available for grants for modernization of 
facilities referred to in paragraphs (a) and (b) of section 601) on 
the basis of the population, the extent of the need for modernization 
of the facilities referred to in paragraphs (a) and (b) of section 601, 
and the financial need of the respective States. 
"(b) (1) The allotment to any State under subsection (a) for any 
fiscal year which is less than— 
"(A) $25,000 for the Virgin Islands, American Samoa, or 
Guam and $50,000 for any other State, in the case of an allotment 
for grants for the construction of public or other nonprofit reha-
bilitation facilities, 
"(B) $50,000 for the Virgin Islands, American Samoa, or 
Guam and $100,000 for any other State in the case of an allotment 
78 STAT. ] 
PUBLIC LAW 88-443-AUG. 18, 1964 
449 
for grants for the construction of public or other nonprofit diag-
nostic or treatment centers, or 
"(C) $100,000 for the Virgin Islands, American Samoa, or 
Guam and $200,000 for any other State in the case of an allotment 
for grants for the construction of public or other nonprofit facili-
ties for long-term care or for the construction of public or other 
nonprofit hospitals and public health centers, or for the modern-
ization of facilities referred to in paragraph (a) or (b) of section 
601, 
shall be increased to that amount, the total of the increases thereby 
required being derived by proportionately reducing the allotment from 
appropriations under such subparagraph or paragraph to each of the 
remaining States under subsection (a) of this section, but with such 
adjustments as may be necessary to prevent the allotment of any of such 
remaining States from appropriations under such subparagraph or 
paragraph from being therebj^ reduced to less than that amount. 
"(2) An allotment of the Virgin Islands, American Samoa, or 
Guam for any fiscal year may be increased as provided in paragraph 
(1) only to the extent it satisfies the Surgeon General, at such time 
prior to the beginning of such year as the Surgeon General may desig-
nate, that such increase will be used for payments under and in accord-
ance with the provisions of this part. 
" (c) For the purposes of this part— 
cenlL^eT"* ^^"^ 
"(1) The 'allotment percentage' for any State shall be 100 per 
centum less that percentage which bears the same ratio to 50 per centum 
as the per capita income of such State bears to the per capita income 
of the United States, except that (A) the allotment percentage shall 
in no case be more than 75 per centum or less than ZSy^ per centum, 
and (B) the allotment percentage for the Commonwealth of Puerto 
Rico, Guam, American Samoa, and the Virgin Islands shall be 75 
per centum. 
"(2) The allotment percentages shall be determined by the Surgeon 
General between July 1 and September 30 of each even-numbered year, 
on the basis of the average of the per capita incomes of each of the 
States and of the United States for the three most recent consecutive 
years for which satisfactory data are available from the Department 
of Commerce, and the States shall be notified promptly thereof. Such 
determination shall be conclusive for each of the two fiscal years in 
the period beginning July 1 next succeeding such determination. 
"(3) The population of the several States shall be determined 
on the basis of the latest figures certified by the Department of 
Commerce. 
"(4) The term 'United States' means (but only for purposes of 
paragraphs (1) and (2)) the fifty States and the District of Columbia. 
"(d)(1) Any sum allotted to a State, other than the Virgin Islands, 
American Samoa, and Guam for a fiscal year under this section and 
lemaining unobligated at the end of such year shall remain available 
to such State, for the purpose for which made, for the next fiscal year 
(and for such year only), in addition to the sums allotted to such 
State for such purpose for such next fiscal year. 
"(2) Any sum allotted to the Virgin Islands, American Samoa, or 
Guam for a fiscal year under this section and remaining unobligated 
at the end of such year shall remain available to it, for the purpose 
for which made, for the next two fiscal years (and for such years 
only), in addition to the sums allotted to it for such purpose for each 
of such next two fiscal years. 
"(e)(1) Upon the request of any State that— 
"(A) a specified portion of anv allotment of such State under 
paragraph (1) of subsection (a), other than an allotment for 
450 
PUBLIC LAW 88-443-AUG. 18, 1964 
[78 STAT. 
grants for the construction of public or other nonprofit rehabilita-
tion facilities, be added to another allotment of such State under 
paragraph (1) or (2) of such subsection, other than an allotment 
for grants for the construction of public or other nonprofit 
hospitals and public health centers, or 
"(B) a specified portion of an allotment of such State under 
paragraph (2) of subsection (a) be added to an allotment of such 
State under paragraph (1) of such subsection, 
and upon simultaneous certification to the Surgeon General by the 
State agency in such State to the effect that— 
'•(C) it has afforded a reasonable opportunity to make applica-
tions for the portion so specified and there have been no approv-
able applications for such portion, or 
"(D) in the case of a request to transfer a portion of an allot-
ment under paragraph (1) of subsection (a) for grants for the 
construction of public or other nonprofit hospitals and public 
health centers, use of such portion as requested by such State 
agency will better carry out the purposes of this title, 
the Surgeon General shall promptly (but after application of sub-
section (b)) adjust the allotments of such State in accordance with 
such request and shall notify the State agency. 
"(2) In addition to the transfer of portions of allotments under 
paragraph (1), the Surgeon General, upon the request of any State 
that a specified portion of an allotment of such State under paragraph 
(2) of subsection (a) be added to an allotment of such State under 
paragraph (1) of such subsection for grants for the construction of 
public or other nonprofit hospitals and public health centers and upon 
simultaneous certification to him by the State agency in such State to 
the effect that the need for new public or other nonprofit hospitals 
and public health centers is substantially greater than the need for 
modernization of facilities referred to in paragraph (a) or (b) of 
section 601, shall promptly (but after application of subsection (b) 
of this section) adjust the allotments of such State in accordance with 
such request and shall notify the State agency; except that not more 
than the following portions of allotments of a State under paragraph 
(2) of subsection (a) may be so added (under this paragraph) to allot-
ments of such State under paragraph (1) of such subsection: 
"(A) in the case of an allotment under paragraph (2) of sub-
section (a) for the fiscal year ending June 30, 1966, one-half of 
such allotment; 
"(B) in the case of an allotment thereunder for the fiscal year 
ending June 30, 1967, three-sevenths of such allotment; 
"(C) in the case of an allotment thereunder for the fiscal year 
ending June 30, 1968, two-fifths of such allotment; and 
"(D) in the case of an allotment thereunder for the fiscal year 
ending June 30, 1969, five-elevenths of such allotment. 
^'(3) After adjustment of allotments of any State as provided in 
paragraph (1) or (2) of this subsection, the allotments as so adjusted 
shall be deemed to be the State's allotments under this section. 
"(f) In accordance with regulations, any State may file with the 
Surgeon General a request that a specified portion of an allotment to 
it under this part for grants for construction of any type of facility, 
or for modernization of facilities, be added to the corresponding allot-
ment of another State for the purpose of meeting a portion of the 
Federal share of the cost of a project for the construction of a facility 
of that type in such other State, or for modernization of a facility in 
such other State, as the case may be. If it is found by the Surgeon 
General (or, in the case of a rehabilitation facility, by the Surgeon 
General and the Secretary) that construction or modernization of the 
78 STAT. ] 
PUBLIC LAW 88-443-AUG. 18, 1964 
451 
facility with respect to which the request is made would meet needs of 
the State making the request and that use of the specified portion of 
'such State's allotment, as requested by it, would assist in carrying out 
the purposes of this title, such portion of such State's allotment shall 
be added to the corresponding allotment of the other State, to be used 
for the purpose referred to above. 
"GENERAL REGULATIONS 
"SEC. 603. The Surgeon General, with the approval of the Federal 
Hospital Council and the Secretary of Health, Education, and Wel-
fare, shall by general regulations prescribe— 
"(a) the general manner in which the State agency shall deter-
mine the priority of projects based on the relative need of differ-
ent areas lacking adequate facilities of various types for which 
assistance is available under this part, giving special consider-
ation— 
"(1) in the case of projects for the construction of hos-
pitals, to facilities serving rural communities and areas with 
relatively small financial resources; 
"(2) in the case of projects for the construction of reha-
bilitation facilities, to facilities operated in connection with 
a university teaching hospital which will provide an inte-
grated program of medical, psychological, social, and voca-
tional evaluation and services under competent supervision; 
"(3) in the case of projects for modernization of facilities, 
to facilities serving densely populated areas; and 
"(4) to the extent deemed feasible by the State agency, 
to hospital facilities which will include new or expanded 
facilities for nurse training; 
"(b) general standards of construction and equipment for facil-
ities of different classes and in different types of location, for 
which assistance is available under this part; 
"(c) criteria for determining needs for general hospital and 
long-term care beds, and needs for hospitals and other facilities 
for which aid under this part is available, and for developing 
plans for the distribution of such beds and facilities; 
"(d) criteria for determining the extent to which existing facil-
ities, for which aid under this part is available, are in need of 
modernization; and 
"(e) that the State plan shall provide for adequate hospitals, 
and other facilities for which aid under this part is available, for 
all persons residing in the State, and adequate hospitals (and such 
other facilities) to furnish needed services for persons unable to 
pay therefor. 
Such reflations may also require that before 
approval of an application for a project is recommended by a 
State agency to the Surgeon General for approval under this 
part, assurance shall be received by the State from the applicant 
that (1) the facility or portion thereof to be constructed or 
modernized will be made available to all persons residing in the 
territorial area of the applicant; and (2) there will be made avail-
able in the facility or portion thereof to be constructed or modern-
ized a reasonable volume of services to persons unable to pay 
therefor, but an exception shall be made if such a requirement is 
not feasible from a financial viewpoint. 
452 
PUBLIC LAW 88-443-AUG. 18, 1964 
[78 STAT. 
"STATE PLANS 
"SEC. 604. (a) Any State desiring to participate in this part may 
submit a State plan. 
Such phm must— 
"(1) designate a single State agency as the sole agency for the 
administration of the plan, or designate such agency as the sole 
agency for supervising the administration of the plan; 
"(2) contain satisfactory evidence that the State agency desig-
nated in accordance with paragraph (1) will have authority to 
carry out such plan in conformity with this part; 
"(3) provide for the designation of a State advisory council 
which shall include representatives of nongovernmental orga-
nizations or groups, and of public agencies, concerned with the 
operation, construction, or utilization of hospital or other facilities 
for diagnosis, prevention, or treatment of illness or disease, or for 
provision of rehabilitation services, and an equal number of 
representatives of consumers familiar with the need for the serv-
ices provided by such facilities, to consult with the State agency 
in carrying out the plan, and provide, if such council does not 
include any representatives of nongovernmental organizations or 
groups, or State agencies, concerned with rehabilitation, for con-
sultation with organizations, groups, and State agencies so 
concerned; 
"(4) set forth, in accordance with criteria established in regula-
tions prescribed under section 603 and on the basis of a statewide 
inventory of existing facilities, a survey of need, and (except to 
the extent provided by or pursuant to such regulations) commu-
nity, area, or regional plans— 
"(A) the number of general hospital beds and lon^-term 
care beds, and the number and types of hospital facilities and 
facilities for long-term care, needed to provide adequate 
facilities for inpatient care of people residing in the State, 
and a plan for the distribution of such beds and facilities in 
service areas throughout the State; 
"(B) the public health centers needed to proivide adequate 
public health services for people residing in the State, and a 
plan for the distribution of such centers throughout the 
State; 
"(C) the diagnostic or treatment centers needed to provide 
adequate diagnostic or treatment services to ambulatory 
patients residing in the State, and a plan for distribution of 
such centers throughout the State; 
"(D) the rehabilitation facilities needed to assure ade-
quate rehabilitation services for disabled persons residing in 
the State, and a plan for distribution of such facilities 
throughout the State; and 
"(E) effective January 1, 1966, the extent to which exist-
ing facilities referred to in section 601 (a) or (b) in the State 
are in need of modernization; 
"(5) set forth a construction and modernization program con-
forming to the provisions set forth pursuant to paragraph (4) 
and regulations prescribed under section 603 and providing for 
construction or modernization of the hospital or long-term care 
facilities, public health centers, diagnostic or treatment centers, 
and rehabilitation facilities which are needed, as determined 
under the provisions so set forth pursuant to paragraph (4) ; 
"(6) set forth, with respect to each of such types of medical 
facilities, the relative need, determined in accordance with regu-
lations prescribed under section 603, for projects for facilities of 
78 STAT. ] 
PUBLIC LAW 88-443-AUG. 18, 1964 
453 
that type, and provide for the construction or modernization, inso-
far as financial resources available therefor and for maintenance 
and operation make possible, in the order of such relative need; 
"(7) provide minimum standards (to be fixed in the discretion 
of the State) for the maintenance and operation of facilities pro-
viding inpatient care which receive aid under this part and, 
effective July 1, 1966, provide for enforcement of such standards 
with respect to projects approved by the Surgeon General under 
this part after June 30,1964; 
"(8) provide such methods of administration of the State plan, 
including methods relating to the establishment and maintenance 
of personnel standards on a merit basis (except that the Surgeon 
General shall exercise no authority with respect to the selection, 
tenure of office, or compensation of any individual employed in 
accordance with such methods), as are found by the Surgeon Gen-
eral to be necessary for the proper and efficient operation of the 
plan; 
"(9) provide for affording to every applicant for a construc-
tion or modernization project an opportunity for a hearing before 
the State agency; 
"(10) provide that the State agency will make such reports, in 
such form and containing such information, as the Surgeon Gen-
eral may from time to time reasonably require, and will keep such 
records and afford such access thereto as the Surgeon General may 
find necessary to assure the correctness and verification of such 
reports; 
"(11) provide that the Comptroller General of the United 
States or his duly authorized representatives shall have access 
for the purpose of audit and examination to the records specified 
in paragraph (10); and 
"(12) provide that the State agency will from time to time, 
but not less often than annually, review its State plan and submit 
to the Surgeon General any modifications thereof which it con-
siders necessary. 
"(b) The Surgeon General shall approve any State plan and any 
modification thereof which complies with the provisions of subsection 
(a). 
If any such plan or modification thereof shall have been dis-
approved by the Surgeon General for failure to comply with sub-
section (a), the Federal Hospital Council shall, uix>n request of the 
State agency, afford it an opportunity for hearing. 
If such Council 
determines that the plan or modification complies with the provisions 
of such subsection, the Surgeon General shall thereupon approve such 
plan or modification. 
"APPROVAL OF PROJECTS FOR CONSTRUCTION OR MODERNIZATION 
"SEC. 605. (a) For each project pursuant to a State plan approved 
under this part, there shall be submitted to the Surgeon General, 
tlirough the State agency, an application by the State or a political 
subdivision thereof or by a public or other nonprofit agency. 
If two 
or more such agencies join in the project, the application may be filed 
by one or more of such agencies. Such application shall set forth— 
" (1) a description of the site for such project; 
"(2) plans and specifications therefor, in accordance with reg-
ulations prescribed,under section 603; 
"(3) reasonable assurance that title to such site is or will be 
vested in one or more of the agencies filing the application or in 
a public or other nonprofit agency which is to operate the facility 
on completion of the project; 
454 
PUBLIC LAW 88-443-AUG. 18, 1964 
[78 STAT. 
"(4) reasonable assurance that adequate financial support will 
be available for the completion of the project and for its mainte-
nance and operation when completed; 
"(5) reasonable assurance that all laborers and mechanics 
employed by contractors or subcontractors in the performance of 
construction or modernization on the project will be paid wages 
at rates not less than those prevailing on similar work in the 
locality as determined by the Secretary of Labor in accordance 
An^e%%l8^^' 
^^'^^^ ^^^ Davls-Bacou Act, as amended (40 U.S.C. 276a—276a-5); 
" *' ' 
' 
and the Secretary of Labor shall have with respect to the labor 
standards specified in this paragraph the authority and functions 
set forth in Reorganization Plan Numbered 14 of 1950 (15 F.R. 
64 Stat. 1267. 
3175. 5 U.S.C. 133z-15) and section 2 of the Act of June 13,1934, 
63 Stat. 108. 
as amended (40 U.S.C. 276c); and 
"(6) a certification by the State agency of the Federal share 
for the project. 
"(b) The Surgeon General shall approve such application if suf-
ficient funds to pay the Federal share of the cost of such project are 
available from the appropriate allotment to the State, and if the 
Surgeon General finds (1) that the application contains such reason-
able assurance as to title, financial support, and payment of prevail-
ing rates of wages; (2) that the plans and specifications are in accord 
with the regulations prescribed pursuant to section 603; (3) that the 
application is in conformity with the State plan approved under sec-
tion 604 and contains an assurance that in the operation of the project 
there will be compliance with the applicable requirements of the regu-
lations prescribed under section 603(e), and with State standards 
for operation and maintenance; and (4) that the application has been 
approved and recommended by the State agency and is entitled to 
priority over other projects within the State in accordance with the 
regulations prescribed pursuant to section 603(a). 
Notwithstanding 
the preceding sentence, the Surgeon General may approve such an 
application for a project for construction or modernization of a re-
habilitation facility only if it is also approved by the Secretary of 
Health, Education, and Welfare. 
"(c) No application shall be disapproved until the Surgeon General 
has afforded the State agency an opportunity for a hearing. 
"(d) Amendment of any approved application shall be subject to 
approval in the same manner as an original application. 
"(e) Notwithstanding any other provision of this title, no applica-
tion for a diagnostic or treatment center shall be approved under this 
section unless the applicant is (1) a State, political subdivision, or 
public agency, or (2) a corporation or association which owns and 
operates a nonprofit hospital (as defined in section 625). 
"PAYMENTS FOR CONSTRUCTION OR MODERNIZATION 
"SEC. 606, (a) Upon certification to the Surgeon General by the 
State agency, based upon inspection by it, that work has been per-
formed upon a project, or purchases have been made, in accordance 
with the approved plans and specifications, and that payment of an 
installment is due to the applicant, such installment shall be paid to the 
State, from the applicable allotment of such State, except that (1) if 
the State is not authorized by law to make payments to the applicant, 
or if the State so requests, the payment shall be made directly to the 
applicant, (2) if the Surgeon General, after investigation or otherwise, 
has reason to believe that any act (or failure to act) has occurred 
78 STAT. ] 
PUBLIC LAW 88-443-AUG. 18, 1964 
455 
requiring action pursuant to section 607, payment may, after he has 
given the State agency notice of opportunity for hearing pursuant 
to such section, be withheld, in whole or in part, i^ending corrective 
action or action based on such hearing, and (3) the total of payments 
under this subsection with respect to such project may not exceed an 
amount equal to the Federal share of the cost of construction of such 
project. 
" (b) In case an amendment to an approved application is approved 
as provided in section 605 or the estimated cost of a project is revised 
upward, any additional payment with respect thereto may be made 
from the applicable allotment of the State for the fiscal year in which 
such amendment or revision is approved. 
"(c) (1) At the request of any State, a portion of any allotment or 
allotments of such State under this part shall be available to pay one-
half (or such smaller share as the State may request) of the expendi-
tures found necessary by the Surgeon General for the proper and 
efficient administration during such year of the State plan approved 
under this part; except that not more than 2 per centum of the total 
of the allotments of such State for a year, or $50,000, whichever is less, 
shall be available for such purpose for such year. 
Payments of 
amounts due under this paragraph may be made in advance or by way 
of reimbursement, and m such installments, as the Svirgeon General 
may determine. 
"(2) Any amount paid under paragraph (1) to any State for any 
fiscal year shall be paid on condition that there shall be expended from 
State sources for such year for administration of the State plan 
approved under this part not less than the total amount expended for 
such purposes from such sources during the fiscal year ending June 
30, 1964. 
"WITHHOLDING OF PAYMENTS 
"SEC. 607. Whenever the Surgeon General, after reasonable notice 
and opportunity for hearing to the State agency designated as pro-
vided in section 604(a) (1), finds— 
"(a) that the State agency is not complying substantially with 
the provisions required by section 604 to be included in its State 
plan; or 
"(b) that any assurance required to be given in an application 
filed under section 605 is not being or cannot be carried out; or 
"(c) that there is a substantial failure to carry out plans and 
specifications approved by the Surgeon General under section 
605; or 
"(d) that adequate State funds are not being provided annually 
for the direct administration of the State plan, 
the Surgeon General may forthwith notify the State agency that— 
"(e) no further payments will be made to the State under 
this part, or 
"(f) no further payments will be made from the allotments of 
such State from appropriations under any one or more subpara-
graphs or paragraphs of section 601, or for any project or projects, 
designated by the Surgeon General as being affected by the action 
or inaction referred to in paragraph (a), (b), (c), or (d) of this 
section, 
as the Surgeon General may determine to be appropriate under the 
circumstances; and, except with regard to any project for which the 
application has already been .approved and which is not directly 
affected, further payments may be withheld, in whole or in part, until 
there is no longer any failure to comply (or carry out the assurance 
or plans and specifications or provide adequate State funds, as the case 
31-667 0-65—32 
456 
PUBLIC LAW 88-443-AUG. 18, 1964 
[78 STAT. 
may be) or, if such compliance (or other action) is impossible, until 
the State repays or arranges for the repayment of Federal moneys to 
which the recipient was not entitled. 
"JUDICIAL REVIEW 
"SEC. 608. (a) If the Surgeon General refuses to approve any 
application for a project submitted under section 605 or section 610, 
the State agency through which such application was submitted, or if 
any State is dissatisfied with his action under section 607 such State 
may appeal to the United States court of appeals for the circuit in 
which such State is located, by filing a petition with such court within 
sixty days after such action. A copy of the petition shall be forthwith 
transmitted by the clerk of the court to the Surgeon General, or any 
officer designated by him for that purpose. 
The Surgeon General 
shall thereupon file in the court the record of the proceedings on 
which he based his action, as provided in section 2112 of title 28, United 
72 Stat. 941. 
States Code. Upon the filing of such petition, the court shall have 
jurisdiction to affirm the action of the Surgeon General or to set it 
aside, in whole or in part, temporarily or permanently, but until the 
filing of the record, the Surgeon General may modify or set aside his 
order. 
"(b) The findings of the Surgeon General as to the facts, if sup-
ported by substantial evidence, shall be conclusive, but the court, 
for good cause shown, may remand the case to the Surgeon General 
to take further evidence, and the Surgeon General may thereupon 
make new or modified findings of fact and may modify his previous 
action, and shall file in the court the record of the further proceedings. 
Such new or modified findings of fact shall likewise be conclusive if 
supported by substantial evidence. 
"(c) The judgment of the court affirming or setting aside, in whole 
or in part, any action of the Surgeon General shall be final, subject to 
review by the Supreme Court of the United States upon certiorari or 
62 Stat. 928. 
Certification as provided in section 1254 of title 28, United States Code. 
The commencement of proceedings under this section shall not, unless 
so specifically ordered by the court, operate as a stay of the Surgeon 
General's action. 
"RECOVERY 
"SEC. 609. If any facility with respect to which funds have been paid 
under section 606 shall, at any time within twenty years after the com-
pletion of construction— 
"(a) be sold or transferred to any person, agency, or organiza-
tion (1) which is not qualified to file an application under sec-
tion 605, or (2) which is not approved as a transferee by the State 
agency designated pursuant to section 604, or its successor, or 
"(b) cease to be a public health center or a public or other non-
profit hospital, diagnostic or treatment center, facility for long-
term care, or rehabilitation facility, unless the Surgeon General 
determines, in accordance with regulations, that there is good 
cause for releasing the applicant or other owner from this obli-
gation, 
the United States shall be entitled to recover from either the transferor 
or the transferee (or, in the case of a facility which has ceased to be 
public or nonprofit, from the owners thereof) an amount bearing the 
same ratio to the then value (as determined by the agreement of the 
parties or by action brought in the district court of the United States 
for the district in which the facility is situated) of so much of the 
facility as constituted an approved project or projects, as the amount 
78 STAT. ] 
PUBLIC LAW 88-443-AUG. 18, 1964 
457 
of the Federal participation bore to the cost of the construction or 
modernization under such project or projects. Such right of recovery 
shall not constitute a lien upon said facility prior to judgment. 
"LOAXS FOR CONSTRUCTION OR MODERNIZATION OF HOSPITALS AND OTHER 
MEDICAL FACILITIES 
"SEC. 610. (a) In order further to assist the States in carrying out 
the purposes of this title, the Surgeon General is authorized to make 
a loan of funds to the applicant for any project for construction or 
modernization which meets all of the conditions specified for a grant 
under this part. 
"(b) Except as provided in this section, an application for a loan 
with respect to any project under this part shall be submitted, and 
shall be approved by the Surgeon General, in accordance with the same 
procedures and subject to the same limitations and conditions as would 
be applicable to the making of a grant under this part for such project. 
Any such application may be approved in any fiscal year only if suffi-
cient funds are available from the allotment for the type of project 
involved. All loans under this section shall be paid directly to the 
applicant. 
"(c) (1) The amount of a loan under this part shall not exceed an 
amount equal to the Federal share of the estimated cost of construc-
tion or modernization under the project. 
Where a loan and a grant 
are made under this part with respect to the same project, the aggre-
gate amount of such loan and such grant shall not exceed an amount 
equal to the Federal share of the estimated cost of construction or 
modernization under the project. 
Each loan shall bear interest at 
the rate arrived at by adding one-quarter of 1 per centum per annum 
to the rate which the Secretary of the Treasury determines to be equal 
to the current average yield on all outstanding marketable obligations 
of the United States as of the last day of the month preceding the date 
the application for the loan is approved and by adjusting the result so 
obtained to the nearest one-eighth of 1 per centum. 
Each loan made 
under this part shall mature not more than forty years after the date 
on which such loan is made, except that nothing in this part shall 
prohibit the payment of all or part of the loan at any time prior to the 
maturity date. In addition to the terms and conditions provided for, 
each loan under this part shall be made subject to such terms, condi-
tions, and covenants relating to repayment of principal, payment of 
interest, and other matters as may be agreed upon by the applicant 
and the Surgeon General. 
"(2) The Surgeon General may enter into agreements modifying 
any of the terms and conditions of a loan made under this part when-
ever he determines such action is necessary to protect the financial 
interest of the United States. 
"(3) If, at any time before a loan for a project has been repaid in 
full, any of the events specified in clause (a) or clause (b) of section 
609 occurs with respect to such project, the unpaid balance of the 
loan shall become immediately due and payable by the applicant, and 
any transferee of the facility shall be liable to the United States for 
such repayment. 
"(d) Any loan under this part shall be made out of the allotment 
from which a grant for the project concerned would be made. Pay-
ments of interest and repayments of principal on loans under this part 
shall be deposited in the Treasury as miscellaneous receipts. 
4 ^ 
PUBLIC LAW 88-443-AUG. 18, 1964 
[78 STAT. 
"PART B—GENERAL 
"FEDERAL HOSPITAL COUNCIL AND ADVISORY COMMITTEES 
"SEC. 621. (a) In administering this title, the Surgeon Greneral shall 
consult with a Federal Hospital Council consisting of the Surgeon 
General, who shall serve as Chairman ex officio, and twelve members 
appointed by the Secretary of Health, Education, and Welfare. 
Six 
of the twelve appointed members shall be persons who are outstanding 
in fields pertaining to medical facility and health activities, and three 
of these six shall be authorities in matters relating to the operation 
of hospitals or other medical facilities, one of them shall be an author-
ity in matters relating to the mentally retarded, and one of them shall 
be an authority in matters relating to mental health, and the other six 
members shall be appointed to represent the consumers of services 
provided by such facilities and shall be persons familiar with the need 
for such services in urban or rural areas. 
"(b) Each appointed member shall hold office for a term of four 
years, except that any member appointed to fill a vacancy occurring 
prior to the expiration of the term for which his predecessor was ap-
pointed shall be appointed for the remainder of such term. 
An 
appointed member shall not be eligible to serve continuously for more 
than two terms (whether beginning before or after enactment of this 
section) but shall be eligible for reappointment if he has not served 
immediately preceding his reappointment. 
"(c) The Council shall meet as frequently as the Surgeon General 
deems necessary, but not less than once each year. Upon request by 
three or more members, it shall be the duty of the Surgeon General 
to call a meeting of the Council. 
"(d) The Council is authorized to appoint such special advisory 
or technical committees as may be useful in carrying out its functions. 
"(e) Appointed Council members and members of advisory or tech-
nical committees, while serving on business of the Council, shall be 
entitled to receive compensation at rates fixed by the Secretary of 
Health, Education, and Welfare, but not exceeding $75 per day, in-
cluding travel time, and, while so serving away from their places of 
residence, they may be allowed travel expenses, including per diem in 
lieu of subsistence, as authorized by section 5 of the Administrative 
5^st?t^*339°^34o Expcuses Act of 1946 (5 U.S.C. 73b-2) for persons in the Government 
service employed intermittently. 
"CONFERENCE OF STATE AGENCIES 
"SEC. 622. Whenever in his opinion the purposes of this title would 
be promoted by a conference, the Surgeon General may invite repre-
sentatives of as many State agencies, designated in accordance with 
section 604, to confer as he deems necessary or proper. A conference 
of the representatives of all such State agencies shall be called an-
nually by the Surgeon General. Upon the application of five or more 
of such State agencies, it shall be the duty of the Surgeon General to 
call a conference of representatives of all State agencies joining in 
the request. 
"STATE CONTROL OF OPERATIONS 
"SEC. 623. Except as otherwise specifically provided, nothing in this 
title shall be construed as conferring on any Federal officer or 
employee the right to exercise any supervision or control over the 
administration, personnel, maintenance, or operation of any facility 
with respect to which any funds have been or may be expended under 
this title. 
78 STAT. ] 
PUBLIC LAW 88-443-AUG. 18, 1964 
459 
"STUDIKS AND DEJIONSTKATIONS RKLATING TO ("OOKDINA'JT.D USE OF 
IK)81MTAL FACILlTlES 
"SEC. {)-24. (a) Tlie Surgeon Geiieriil is authorized to conduct 
research, ex[)erinients, and demonstrations rehiting to the effective 
development and utilization of services, facilities, and resources of 
hospitals or other medical facilities and, after consultation with the 
Federal Hospital Council, to make grants-in-aid to States, political 
subdivisions, universities, hospitals, and other public and nonprolit 
private institutions or organizations for projects for the conduct of 
research, experiments, or demonFtrations relating to the development, 
utilization, and coordination ol services, facilities, and resources of 
hospitals or other medical facilities, agencies, or institutions, and 
including the construction of units of hospitals or other medical facili-
ties which involve experimental architectural designs or functional 
layout, the efficiency or economy of which can be tested and evaluated, 
or the demonstration thereof, and projects for acquisition of experi-
mental or demonstration equipment for use in connection with hos-
pitals or other medical facilities. 
Any award for any such project 
made from an appropriation under this section for any fiscal year may 
include such amounts as the Surgeon General determines to be neces-
sary for succeeding fiscal yeare for completion of the Federal partici-
pation in the project as approved by the Surgeon General. 
Payments 
of any such grant may be made in advance or by way of reimbursement, 
and in such installments, as may be determined by the Surgeon Gen-
eral; and shall be made on such conditions as the Surgeon General 
finds necessary to carry out the purposes of this section. A grant 
under this section with respect to any project for construction of a 
facility or for acquisition of equipment (1) may not exceed $500,000, 
and (2) except where the Surgeon General determines that unusual 
circumstances make a larger percentage necessary in order to effectuate 
the purposes of this section, may not exceed 50 per centum of so much 
of the cost of such facility or such equipment as the Surgeon General 
determines is reasonably attributable to experimental or demonstra-
tion purposes. 
The provisions of clause (5) of the third sentence of 
subsection (a) of section 605 and any other provisions of such section 
which the Surgeon General deems appropriate shall be applicable, 
along with such other conditions as the Surgeon General may deter-
mine, to grants under this section for projects for construction or for 
acquisition of equipment. There is authorized to be appropriated not 
to exceed $10,000,000 for any fiscal year to carry out the provisions 
of this section. 
"(b) If, within twenty years after completion of any construction 
for which funds have been paid under this section— 
"(1) the applicant or other owner of the facility shall cease to 
be a public or other nonprofit institution or organization, or 
"(2) the facility shall cease to be used for the purposes for 
which it was constructed or for the provision of hospital or other 
services for which construction projects may be approved under 
this title (unless the Surgeon General determines, in accordance 
with regulations, that there is good cause for releasing the appli-
cant or other owner from the obligation to do so), 
the United States shall be entitled to recover from the applicant or 
other owner of the facility an amount bearing the same ratio to the 
then value (as determined by agreement of the parties or by action 
brought in the United States district court for the district in which 
such facility is situated) of the facility, as the amount of the Federal 
participation bore to the cost of construction of such facility. 
Such 
right of recovery shall not constitute a lien on such facility prior to 
judgment. 
460 
PUBLIC LAW 88-443-AUG. 18, 1964 
[78 STAT. 
"DEFINITIONS 
"'SEC. 625. For the purposes of this title— 
"(a) The term 'State' includes the Commonwealth of Puerto Rico, 
Guam, American Samoa, the Virgin Islands, and the District of 
Columbia. 
"'(b) The term 'Federal share' with respect to any project means 
the proportion of the cost of construction of such project to be paid by 
the Federal Government, determined as follows: 
"(1) With respect to projects for which grants are made from 
allotments made from appropriations under paragraph (b) of 
section 601, the Federal share shall be whichever of the following 
tlie State elects: 
"(A) the share determined by the State agency in accord-
ance with standards, included in the State plan, which pro-
vide equitably for variations between projects on the basis of 
objective criteria related to the economic status of areas and, 
if the State so elects, such other factor or factors as may be 
appropriate and be permitted by regulations, except that 
such standards may not provide for a Federal share of more 
than 66% per centum, or less than 3314 per centum, or 
"(B) the amount (not less than 331/^ per centum and not 
more than either 66% per centum or the State's allotment per-
centage, whichever is lower) established by the State agency 
for all projects in the State; 
"(2) With respect to projects for which grants are made from 
allotments made from appropriations under paragraph (a) of 
section 601, the Federal share shall be whichever of the following 
the State elects: 
"(A) the share determined by the State agency in accord-
ance with the standards, included in the State plan, and 
meeting the requirements set forth in subparagraph (A) of 
paragraph (1), 
"(B) the amount (not less than 33% per centum and not 
more than either 66% per centum or the State's allotment 
percentage, whichever is lower) established by the State 
agency for all projects in the State, or 
"(C) 50 per centum of the cost of construction of the 
project. 
The State agency shall, prior to the approval by it, under the State 
plan approved under part A, of the first project in the State during 
any fiscal year, give written notification to the Surgeon General of 
the Federal share which it has elected pursuant to paragraph (1), 
and the Federal share which it has elected pursuant to paragraph (2), 
of this subsection for projects in such State to be approved by the 
Surgeon General during such fiscal year, and such Federal share or 
shares for projects in such State approved by the Surgeon General 
during such fiscal year shall not be changed after approval of such 
first project by the State. 
"(c) The term 'hospital' includes general, tuberculosis, and other 
types of hospitals, and related facilities, such as laboratories, out-
patient departments, nurses' home and training facilities, and central 
service facilities operated in connection with hospitals, but does not 
include any hospital furnishing primarily domicilia_ry care, 
"(d) The term 'public health center' means a publicly owned facil-
ity for the provision of public health services, including related pub-
licly owned facilities such as laboratories, clinics, and administrative 
offices operated in connection with such a facility. 
78 STAT. ] 
PUBLIC LAW 88-443-AUG. 18, 1964 
461 
"(e) The term 'nonprofit" as applied to any facility means a facility 
which is owned and operated by one or more nonprofit corporations or 
associations no part of the net earnings of which inures, or may 
lawfully inure, to the benefit of any private shareholder or individual. 
"(f) The term 'diagnostic or treatment center' means a facility for 
the diagnosis or diagnosis and treatment of ambulatory patients— 
"(1) which is operated in connection with a hospital, or 
"(2) in which patient care is under the professional supervision 
of persons licensed to practice medicine or surgery in the State, 
or, in the case of dental diagnosis or treatment, under the profes-
sional supervision of persons licensed to practice dentistry in the 
State. 
"(g) The term 'rehabilitation facility' means a facility which is 
operated for the primary purpose of assisting in the rehabilitation of 
disabled persons through an integrated program of— 
"(1) medical evaluation and services, and 
"(2) psychological, social, or vocational evaluation and services, 
under competent professional supervision, and in the case of which— 
"(3) the major portion of the required evaluation and services 
is furnished within the facility; and 
"(4) either (A) the facility is operated in connection with a 
hospital, or (B) all medical and related health services are pre-
scribed by, or are under the general direction of, persons licensed 
to practice medicine or surgery in the State. 
"(h) The term 'facility for long-term care' means a facility provid-
ing in-patient care for convalescent or chronic disease patients who 
require skilled nursing care and related medical services— 
"(1) which is a hospital (other than a hospital primarily for 
the care and treatment of mentally ill or tuberculous patients) or 
is operated in connection with a hospital, or 
"(2) in which such nursing care and medical services are pre-
scribed by, or are performed under the general direction of, per-
sons licensed to practice medicine or surgery in the State. 
" (i) The term 'construction' includes construction of new buildings, 
expansion, remodeling, and alteration of existing buildings, and initial 
equipment of any such buildings (including medical transportation 
facilities) ; including architects' fees, but excluding the cost of off-site 
improvements and, except with respect to public health centers, the 
cost of the acquisition of land. 
"(j) The term 'cost' as applied to construction or modernization 
means the amount found by the Surgeon General to be necessary for 
construction and modernization respectively, under a project, except 
that such term, as applied to a project for modernization of a facility 
for which a grant or loan is to be made from an allotment under section 
602(a) (2), does not include any amount found by the Surgeon General 
to be attributable to expansion of the bed capacity of such facility. 
"(k) The term 'modernization' includes alteration, major repair 
(to the extent permitted by regulations), remodeling, replacement, 
and renovation of existing buildings (including initial equipment 
thereof), and replacement of obsolete, built-in (as determined in 
accordance with regulations) equipment of existing buildings. 
" (1) The term 'title', when used with reference to a site for a project, 
means a fee simple, or such other estate or interest (including a lease-
hold on which the rental does not exceed 4 per centum of the value of 
the land) as the Surgeon General finds sufficient to assure for a period 
of not less than fifty years' undisturbed use and possession for the pur-
poses of construction and operation of the project." 
(b) The amendment made by subsection (a) shall become effective, Effective date. 
upon the date of enactment of this Act, except that— 
462 
PUBLIC LAW 88-444-AUG. 19, 1964 
[78 STAT. 
(1) all applications approved by the Surgeon General under 
title VI of the Public Health Service Act prior to such date, and 
allotments of sums appropriated prior to such date, shall be 
68^st^t^*46\°^^' 
governed by the provisions of such title VI in effect prior to such 
72 Stat. 489! 
date; 
42 use 291- 
(2) allotment percentages promulgated by the Surgeon Gen-
eral under such title VI during 1962 shall continue to be effective 
for purposes of such title as amended by this Act for the fiscal 
year ending June 30,1965; 
(3) the terms of members of the Federal Hospital Council who 
are serving on such Council prior to such date shall expire on the 
date they would have expired had this Act not been enacted; 
(4) the provisions of the fourth sentence of section 636(a) of 
42 us^c a
^
Q
^
^
n 
^^^^ Public Health Service Act, as in effect prior to the enactment 
of this Act, shall apply in lieu of the fourth sentence of section 
Ante, p. 459. 
624(a) of the Public Health Service Act, as amended by this Act, 
in the case of any project for construction of a facility or for 
acquisition of equipment with respect to which a grant for any 
part thereof or for planning such construction or equipment was 
made prior to the enactment of this Act; 
(5) no application with respect to a project for modernization 
of any facility in any State may be approved by the Surgeon Gen-
eral, for purposes of receiving funds from an allotment under 
Ante, p. 448. 
section 602(a) (2) of the Public Health Service Act, as amended 
by this Act, before July 1, 1965, or before such State has had a 
State plan approved by the Surgeon General as meeting the 
Ante, p. 452. 
requirements of section 604(a) (4) (E) as well as the other require-
ments of section 604 of such Act as so amended. 
Approved August 18, 1964. 
Public Law88-444 
August 19, 1964 
^'^ ACT 
[ • R- 11611] 
ijiQ establish a National Commission on Technology, Automation, and Economic 
Progress. 
Be it enacted hy the Senate and House of Representatives 
of the 
^ National^com-^ 
UfiH^d States of America in Congress assembled^ That Congress finds 
^'log'yrAutoma- 
it imperative to accelerate the national effort to— 
tion, and Eco- 
(a) identify and assess the past effects and the current and 
nomic rogress. 
prospcctivc rolc and pacc of teclinological-cliange; 
(b) identify and describe the impact of technological and 
economic change on production and emplovment, including new 
job requirements and the major types of worker displacement, both 
technological and economic, which are likely to occur during the 
next ten years; the specific industries, occupations, and geographic 
areas which are most likely to be involved; and the social and eco-
nomic effects of these developments on the Nation's economy, man-
power, communities, families, social structure, and human values; 
(c) define those areas of unmet community and human needs 
toward which application of new technologies might most effec-
tively be directed, encompassing an examination of technological 
developments that have occurred in recent years, including those 
resulting from the Federal Government's research and develop-
ment programs; 
(d) assess the most effective means for channeling new^ tech-
nologies into promising directions, including civilian industries