Mental Health Systems Act
PL 96-398 (S.1177), enacted 10/07/1980

94 STAT. 1564 
PUBLIC LAW 96-398—OCT. 7, 1980 
Public Law 96-398 
96th Congress 
An Act 
Oct. 7,1980 
To improve the provision of mental health services and otherwise promote mental 
[8.1177] 
health throughout the United States, and for other purposes. 
Be it enacted by the Senate and House of Representatives of the 
Mental Health 
United States of 
America in Congress assembled, 
Systems Act. 
42 u s e 9401 
SHORT TITLE AND TABLE OP CONTENTS 
note. 
SECTION 1. This Act may be cited as the "Mental Health Systems 
Act". 
TABLE OF CX)NTENTS 
Sec. 1. Short title and table of contents. 
Sec. 2. Findings. 
TITLE I—GENERAL PROVISIONS 
PART A—DEFINITIONS 
Sec. 101. Definition of conmiunity mental health center. 
Sec. 102. Other definitions. 
PART B—STATE ADMINISTRATIVE RESPONSIBILITIES 
Sec. 105. State mental health authority. 
Sec. 106. Mental health service areas. 
Sec. 107. Allotments to States to improve the administration of State mental health 
programs. 
TITLE II—GRANT PROGRAMS 
Sec. 201. Grants for community mental health centers. 
Sec. 202. Grants for services for chronically mentally ill individuals. 
Sec. 203. Grants for services for severely mentsdly disturbed children and 
adolescents. 
Sec. 204. Grants for mental health services for elderly individuals and other prior-
ity populations. 
Sec. 205. Grants for non-revenue-producing services. 
Sec. 206. Grants for mental health services in health care centers. 
Sec. 207. Grants and contracts for innovative projects. 
Sec. 208. Grants for the prevention of mental illness tmd the promotion of mental 
health. 
TITLE III-GENERAL PROVISIONS RESPECTING GRANT PROGRAMS 
PART A—STATE MENTAL HEALTH SERVICE PROGRAMS 
Sec. 301. State mental health services programs. 
Sec. 302. Contents of programs. 
Sec. 303. Mental health provisions of State health plans. 
PART B—APPUCATIONS AND RELATED PROVISIONS 
Sec. 305. State administration. 
Sec. 306. Processing of applications by State mental heedth authorities. 
Sec. 307. Applications. 
Sec. 308. Incfian tribes and organizations. 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1565 
Sec. 309. Procedures. 
PART C—PERFORMANCE 
Sec. 315. Performance contracts. 
Sec. 316. Performance standards. 
Sec. 317. Evaluation and monitoring. 
PART D—ENFORCEMENT 
Sec. 321. Enforcement. 
PART E—MISCELLANEOUS 
Sec. 325. National Institute of Mental Health Prevention Unit. 
Sec. 326. Technical assistance. 
Sec. 327. Indirect provision of services. 
Sec. 328. Cooperative agreements. 
TITLE IV—ASSOCIATE DIRECTOR FOR MINORITY CONCERNS 
Sec. 401. Associate Director for Minority Concerns. 
TITLE V—MENTAL HEALTH RIGHTS AND ADVOCACY 
Sec. 501. Bill of rights. 
Sec. 502. Grants for protection and advocacy programs. 
TITLE VI—RAPE PREVENTION AND CONTROL 
Sec. 601. Rape prevention and control. 
Sec. 602. Grants for services for rape victims. 
TITLE Vn—EXTENSION OF COMMUNITY MENTAL HEALTH CENTERS ACT 
Sec. 701. One-year extension of Community Mental Health Centers Act. 
TITLE Vm—MISCELLANEOUS 
Sec. 801. Employee protection. 
Sec. 802. Report on shelter and basic living needs of chronically mentfdly ill 
individuals. 
Sec. 803. Obligated service for mental health traineeships. 
Sec. 804. Conforming amendments. 
Sec. 805. Special pay for Public Health Service physicians and dentists. 
Sec. 806. Contract authority. 
TITLE IX—MECHANIZED CLAIMS PROCESSING AND INFORMATION 
RETRIEVAL SYSTEMS 
Sec. 901. Mechanized claims processing and information retrieval ss^stems. 
FINDINGS 
SEC. 2. The Congress 
finds— 
42 use 940i. 
(1) despite the significant progress that has been made in 
making community mental health services available and in 
improving residential mental health facilities since the original 
community mental health centers legislation was enacted in 
1963, unserved and underserved populations remain and there 
are certain groups in the population, such as chronically men-
tally ill individuals, children and youth, elderly individuals, 
racial and ethnic minorities, women, poor persons, and persons 
in rural areas, which often lack access to adequate private and 
public mental health services and support services; 
(2) the process of transferring or diverting chronically men-
tally ill individuals from unwarranted or inappropriate institu-
94 STAT. 1566 
PUBLIC LAW 96-398—OCT. 7, 1980 
tionalized settings to their home communities has frequently not 
been accompanied by a process of providing those individuals 
with the mental health and support services they need in 
community-based settings; 
(3) the shift in emphasis from institutional care to community-
based care has not always been accompanied by a process of 
affording training, retraining, and job placement for employees 
affected by institutional closure and conversion; 
(4) the delivery of mental health and support services is 
typically uncoordinated within and among local, State, and 
Federal entities; 
(5) mentally ill persons are often inadequately served by (A) 
programs of the Department of Health and Human Services such 
as medicare, medicaid, supplemental security income, and social 
services, and (B) programs of the Department of Housing and 
Urban Development, the Department of Labor, and other 
Federal agencies; 
(6) health care systems often lack general health care person-
nel with adequate mental health care training and often lack 
mental health care personnel and consequently many individ-
uals with some level of mental disorder do not receive appropri-
ate mental health care; 
(7) present knowledge of methods to prevent mental illness 
through discovery and elimination of its causes and through 
early detection and treatment is too limited; 
(8) a comprehensive and coordinated array of appropriate 
private and public mental health and support services for all 
people in need within specific geographic areas, based upon a 
cooperative local-State-Federal partnership, remains the most 
effective and humane way to provide a majority of mentally ill 
individuals with mental health care and needed support; and 
(9) because of the rising demand for mental health services and 
the wide disparity in the distribution of psychiatrists, clinical 
psychologists, social workers, and psychiatric nurses, there is a 
shortage in the medical specialty of psychiatry and there are also 
shortages among the other health personnel who provide mental 
health services. 
TITLE I—GENERAL PROVISIONS 
PART A—DEFINITIONS 
DEFINITION OF COMMUNITY MENTAL HEALTH CENTER 
42 use 9411. 
SEC. 101. (a) For purposes of this Act, the term "community mental 
health center" means a legal entity (1) through which comprehensive 
mental health services are provided— 
(A) principally to individuals residing in a mental health 
service area, with special attention to those who are chronically 
mentally ill, 
(B) within the limits of its capacity, to any individual residing 
or employed in such area regardless of ability to pay for such 
services, current or past health condition, or any other factor, 
and 
(C) in the manner prescribed by subsection (b), 
and (2) which is organized in the manner prescribed by subsections (c) 
and (d). 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1567 
Comprehensive 
mental health 
(b)(1) The comprehensive mental health services which shall be 
provided through a community mental health center are as follows: 
(A) Beginning on the date the community mental health center ^''''^^'^^^ 
is established for purposes of section 201, the services provided 
through the center shall include— 
(i) inpatient services, emergency services, and outpatient 
services; 
(ii) assistance to courts and other public agencies in 
screening residents of the center's mental health service 
area who are being considered for referral to a State mental 
health facility for inpatient treatment to determine if they 
should be so referred and provision, where appropriate, of 
treatment for such persons through the center as an alterna-
tive to inpatient treatment at such a facility; 
(iii) provision of foUowup care for residents of its mental 
health service area who have been discharged from inpa-
tient treatment at a mental health facility; 
(iv) consultation and education services which— 
(I) are for a wide range of individuals and entities 
involved with mental health services, including health 
professionals, schools, courts, State and local law 
enforcement and correctional agencies, members of the 
clergy, public welfare agencies, health services delivery 
agencies, and other appropriate entities; and 
(II) include a wide range of activities (other than the 
provision of direct clinical services) designed to develop 
effective mental health programs in the center's mental 
health service area, promote the coordination of the 
provision of mental health services among various enti-
ties serving the center's mental health service area, 
increase the awareness of the residents of the center's 
mental health service area of the nature of mental 
health problems and the tvpes of mental health services 
available, and promote the prevention and control of 
rape and the proper treatment of the victims of rape; 
and 
(v) the services described in subparagraph (B) or, in lieu of 
such services, the center shall have a plan approved by the 
Secretary under which the center will, during the three-year 
period beginning on such establishment date, assume in 
increments the provision of the services described in subpar-
agraph (B) and will upon the expiration of such three-year 
period provide all the services described in subparagraph (B). 
(B) After the expiration of such three-year period, a com- Additional 
munity mental health center shall provide, in addition to the services. 
services required by subparagraph (A), services which include— 
(i) day care and other partial hospitalization services; 
(ii) a program of specialized services for the mental health 
of children, including a full range of diagnostic, treatment, 
liaison, and foUowup services (as prescribed by the Secre-
tary); 
(lii) a program of 
specialized services for the mental health 
of the elderly, including a full range of diagnostic, treat-
ment, liaison, and foUowup services (as prescribed by the 
Secretary); 
(iv) a program of transitional half-way house services for 
mentally ill individuals who are residents of its mental 
health service area and who have been discharged from 
79-194 
O—81—pt. 2 
19 : QL3 
94 STAT. 1568 
PUBLIC LAW 96-398—OCT. 7, 1980 
Service 
coordination. 
Professional 
supervision. 
Supervising 
physician. 
Governing body. 
inpatient treatment in a mental health facility or would 
without such services require inpatient treatment in such a 
facility; and 
(v) provision of each of the following service programs 
(other than a service program for which there is not suffi-
cient need (as determined by the Secretary) in the center's 
mental health service area, or the need for which in the 
center's mental health service area the Secretary deter-
mines is currently being met): 
(I) A program for the prevention and treatment of 
alcoholism and alcohol abuse and for the rehabilitation 
of alcohol abusers and alcoholics. 
(II) A program for the prevention and treatment of 
drug addiction and abuse and for the rehabilitation of 
drug addicts, drug abusers, and other persons with drug 
dependency problems. 
(2) The provision of comprehensive mental health services through 
a center shall be coordinated with the provision of services by other 
health and social service agencies (including public mental health 
facilities) in or serving residents of the center^ mental health service 
area to ensure that persons receiving services through the center 
have access to all such health and social services as they may require. 
The center's services (A) may be provided at the center or satellite 
centers through the staff of the center or through appropriate 
arrangements with health professioneils and others in the center's 
mental health service area, or, with the approval of the Secretary, in 
the case of inpatient services, emergency services, partial hospitaliza-
tion, transitional half-way house services, and certain specialized 
services, through appropriate arrangements with health profession-
als and others serving the residents of the mental health service area, 
(B) shall be available and accessible to the residents of the area 
promptly, as appropriate, and in a manner which preserves human 
dignity and assures continuity and high quality care and which 
overcomes geographic, cultural, linguistic, and economic barriers to 
the receipt of services, and (C) when medically necessary, shall be 
available and accessible twenty-four hours a day and seven days a 
week. 
(3)(A) The mental health care of every patient of a center shall be 
under the supervision of a member of the professional staff of the 
center. The center shall provide for having a member of its profes-
sional staff available to furnish necessary mental health care in case 
of an emergency. 
(B) Any medical services provided by a center shall be under the 
supervision of a physician unless otherwise permitted by State law. 
Whenever possible, the supervising physician shall be a psychiatrist. 
(c)(1) Except as provided in paragraph (2) or (3), a community 
mental health center shall have a governing body which (A) is 
composed of individuals who reside in the center's mental health 
service area and who, as a group, represent the residents of that area 
taking into consideration their employment, age, sex, and place of 
residence, and other demographic characteristics of the area, and (B) 
is required to meet at least once a month, to establish general policies 
for the center (including a schedule of hours during which services 
will be provided), to approve the center's annual budget, and to 
approve the selection of a director for the center. At least one-half of 
the members of such body shall be individuals who are not providers 
of health care. 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1569 
(2)(A) Except as provided in subparagraph (B), in the case of a 
community mental health center which is operated by a governmen-
tal agency or a hospital, such center may, in lieu of meeting the 
requirements of paragraph (1), appoint a committee which advises it 
with respect to the operations of the center and which is composed of 
individuals who reside in the center's mental health service area, 
who are representative of the residents of the area as to emplo5maent, 
age, sex, place of residence, and other demographic characteristics, 
and at least one-half of whom are not providers of health care. A 
center to which this subparagraph applies shall submit to such a 
committee for its review any application for a grant under section 
201. 
(B) Subparagraph (A) does not apply with respect to a community 
mental health center which on the date of the enactment of this Act 
had a governing body which met the requirements of paragraph (1). 
(3) Paragraphs (1) and (2) do not apply to a community mental 
health center which is operated by a primary care center, commu-
nity health center, or migrant center and which meets the appli-
cable requirements of part D of title III of the Public Health Service 
Act. 
(4) For purposes of paragraphs (1) and (2), the term "provider of 
health care" has the same meaning as is prescribed for that term by 
section 1531(3) of the Public Health Service Act. 
(d) A center shall, in accordance with regulations prescribed by the 
Secretary, have (1) an ongoing quality assurance program (including 
multidisciplinary utilization and peer review systems) respecting the 
center's services, (2) an integrated medical records system (including 
a drug use profile) which, in accordance with applicable Federal and 
State laws respecting confidentiality, is designed to provide access to 
all past and current information regarding the health status of each 
patient and to maintain safeguards to preserve confidentiality and to 
protect the rights of the patient, (3) a multidisciplinary professional 
advisory board, which is composed of members of the center's 
professional staff, to advise the governing board or the advisory 
committee in establishing policies governing medical and other 
services provided by such staff on behalf of the center, and (4) an 
identifiable administrative unit which shall be responsible for provid-
ing the consultation and education services described in subsection 
0))(l)(A)(iv). The Secretary may waive the requirements of clause (4) 
with respect to any center if he determines that because of the size of 
such center or because of other relevant factors the establishment of 
the administrative unit described in such clause is not warranted. 
Advisory 
committee. 
42 u s e 255. 
"Provider of 
health care." 
42 u s e 300n. 
eenter, 
requirements. 
Waiver. 
OTHER DEFINITIONS 
SEC. 102. For purposes of this Act: 
(1) The term "Secretary" means the Secretary of Health and 
Human Services. 
(2) The term "State" includes (in addition to the fifty States) 
the District of Columbia, the Commonwealth of Puerto Rico, the 
Virgin Islands, Guam, American Samoa, the Trust Territory of 
the Pacific Islands, and the Northern Mariana Islands. 
(3) The term "State mental health authority" means the 
agency of a State designated under section 105 to be responsible 
for the mental health programs of 
the State. 
(4) The term "mental health service area" means an area 
established under section 106. 
(5) The term "nonprofit", as applied to any entity, means an 
entity which is owned and operated by one or more corporations 
42 u s e 9412. 
94 STAT. 1570 
PUBLIC LAW 96-398—OCT. 7, 1980 
42 u s e 300/-2, 
300m-3. 
or associations no part of 
the net earnings of which inures or may 
lawfully inure to the benefit of any private shareholder or 
person. 
(6) The term "priority population group" means an identifiable 
population group in a mental health service area which is 
unserved or underserved by mental health programs in such 
area as determined under a health systems plan or a State health 
plan in effect under section 1513 or 1524 of the Public Health 
Service Act. 
(7) The term "Governor" means the chief executive officer of a 
State. 
PART B—STATE ADMINISTRATIVE RESPONSIBIUTIES 
STATE MENTAL HEALTH AUTHORITY 
42 use 9421. 
SEC. 105. Each State shall designate an agency of the State to be 
responsible for the mental health programs of 
the State. 
Redesignation. 
42 u s e 9422. 
Boundaries. 
42 u s e 300k-l. 
Boundary 
review; revision. 
Notice; hearing. 
MENTAL HEALTH SERVICE AREAS 
SEC. 106. (a) Each catchment area of a community mental health 
center designated under the Community Mental Health Centers Act 
is redesignated as a mental health service area. 
(b) A mental health service area in a State shall, except to the 
extent permitted under regulations of 
the Secretary, have boundaries 
which conform to or are within the boundaries of a health service 
area established under title XV of the Public Health Service Act and, 
to the extent practicable, conform to boundaries of one or more school 
districts or political or other subdivisions in the State. 
(c)(1) The State mental health authority of a State shall review the 
boundaries of any mental health service area in the State which does 
not meet the requirements of subsection (b) and shall make such 
revisions in the boundaries of the area as may be necessary to meet 
such requirements. 
(2) The State mental health authority of a State may review the 
boundaries of any mental health service area in the State and may 
revise the boundary of 
any such area to— 
(A) ensure that the size of such area is such that the services to 
be provided in the area are available and accessible to the 
residents of 
the area promptly, as appropriate, and 
(B) ensure that the boundary of such area eliminates, to the 
extent possible, barriers to access to the services provided in the 
area, including barriers resulting from an area's physical charac-
teristics, its residential patterns, its economic and social group-
ings, and its available transportation. 
(3) In conducting a review of a boundary under paragraph (1) or (2) 
a State mental health authority shall provide notice of its review and 
shall provide a reasonable opportunity for a hearing on its review and 
any proposed boundary revision. 
ALLOTMENTS TO STATES TO IMPROVE THE ADMINISTRATION OF STATE 
MENTAL HEALTH PROGRAMS 
42 use 9423. 
SEC. 107. (a) For the purpose of assisting State mental health 
authorities to improve the administration of State mental health 
programs and to carry out their activities under this Act relating to— 
(1) planning and program design. 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1571 
(2) data collection, 
(3) data analysis, 
(4) research, 
(5) evaluation, 
(6) setting and enforcing regulatory and other standards, 
(7) reporting to the Secretary, and 
(8) establishing, expanding, or operating mental health 
patients' rights protection programs, 
the Secretary shall, for each fiscal year and in accordance with 
regulations, allot to the States the sums appropriated for such year 
under subsection (c) on the basis of the population and the financial 
need of the respective States. The populations of the States shall be 
determined on the basis of the latest figures for the populations of the 
States available from the Department of Commerce. 
O
t
)
) No allotment may be made to a State under subsection (a) unless 
the State has submitted to the Secretary an application for the 
allotment containing such information as the Secretary may require. 
(c) There are authorized to be appropriated for allotments under 
subsection (a), $15,000,000 for the fiscal year ending September 30, 
1982, $15,000,000 for the fiscal year ending September 30, 1983, and 
$15,000,000 for the fiscal year ending September 30,1984. 
(d) Effective September 30,1981, section 314(g) of the Public Health 
Service Act is repealed. 
TITLE II—GRANT PROGRAMS 
GRANTS FOR COMMUNITY MENTAL HEALTH CENTERS 
SEC. 201. (a)(1) The Secretary may make grants to any public or 
nonprofit private community mental health center to assist it in 
meeting its costs of operation (other than costs related to construc-
tion). 
(2) No application for a grant under paragraph (1) for a community 
mental health center which has not received a grant for its operation 
under the Community Mental Health Centers Act may be approved 
unless the application is accompanied by assurances, satisfactory to 
the Secretary, that the grant applied for and the State, local, and 
other funds and the fees, premiums, and third-party reimbursements 
v/hich the applicant may reasonably be expected to collect in the year 
for which the grant would be made are sufficient to meet the 
projected costs of operation for that year. 
(3) Grants under paragraph (1) may only be made for a grantee's 
costs of operation during the first eight years after its establishment. 
In the case of a community mental health center which received a 
grant under section 220 of the Community Mental Health Centers 
Act (as in effect before the date of enactment of the Community 
Mental Health Centers Amendments of 1975) or section 203(a) of such 
Act (as in effect after such date), such center shall, for purposes of 
grants under paragraph (1), be considered as having been in oper-
ation since its establishment for a number of years equal to the sum 
of the number of grants it received under such sections and the 
number of 
grants it has received under paragraph (1). 
(b) Each grant under subsection (a) to a community mental health 
center shall be made for the costs of its operation for the one-year 
period beginning on the first day of the month in which such grant is 
made, except that if at the end of such period a center has not 
obligated all the funds received by it under a grant, the center may 
use the unobligated funds under the grant in the succeeding year for 
the same purposes for which such grant was made but only if the 
center is eligible to receive a grant under subsection (a) for such 
succeeding year. 
Population 
determination. 
Allotment 
application. 
Appropriation 
authorization. 
Repeal. 
42 u s e 246. 
42 u s e 9431. 
Time limitation. 
79 Stat. 428, 84 
Stat. 56. 
42 u s e 2689 
note. 
42 u s e 2689b. 
Unobligated 
funds. 
94 STAT. 1572 
PUBLIC LAW 96-398—OCT. 7, 1980 
Grant 
computation. 
Designated 
urban or rural 
poverty area. 
Unobligated 
funds. 
Costs exceeded 
by funds, grant 
adjustment. 
Operational 
costs, 
appropriation 
authorization. 
42 u s e 2689 
note. 
(c)(1) The amount of a grant for any year made under subsection (a) 
shall be the lesser of the amounts computed under subparagraph (A) 
or (B) as follows: 
(A) An amount equal to the amount by which the grantee's 
projected costs of operation for that year exceed the total of 
State, local, and other funds and of the fees, premiums, and third-
party reimbursements which the grantee may reasonably be 
expected to collect in that year. 
(B)(i) Except as provided in clause (ii), an amount equal to the 
following percentages of the grantee's projected costs of oper-
ation: 80 percent of such costs for the first year of its operation, 
65 percent of such costs for the second year of its operation, 50 
percent of such costs for the third year of its operation, 35 
percent of such costs for the fourth year of its operation, 30 
percent of such costs for the fifth and sixth years of its operation, 
and 25 percent of such costs for the seventh and eighth years of 
its operation. 
(ii) In the case of a grantee providing services for persons in an 
area designated by the Secretary as an urban or rural poverty 
area, an amount equal to the following percentages of the 
grantee's projected costs of operation: 90 percent of such costs for 
the first two years of its operation, 80 percent of such costs for the 
third year of its operation, 70 percent of such costs for the fourth 
year of its operation, 60 percent of such costs for the fifth year of 
its operation, 50 percent of such costs for the sixth year of its 
operation, 40 percent of such costs for the seventh year of its 
operation, and 30 percent of such costs for the eighth year of its 
operation. 
(2) The amount of a grant prescribed by paragraph (1) for a 
community mental health center for any year shall be reduced by 
the amount of unobligated funds from the preceding year which the 
center is authorized, under subsection Ot))(l), to use in the year for 
which the grant is to be made. 
(3) If in a fiscal year the sum of— 
(A) the total of State, local, and other funds, and of the fees, 
premiums, and third-party reimbursements collected in that 
year, and 
(B) the amount of the grant received under subsection (a) by a 
center, 
exceeds its actual costs of operation for that year, and if the center is 
eligible to receive a grant under subsection (a) in the succeeding year, 
an adjustment in the amount of that grant shall be made in such a 
manner that the center may retain such an amount (not to exceed 50 
per centum of the amount by which such sum exceeded such costs) as 
the center can demonstrate to the satisfaction of the Secretary will be 
used to enable the center (i) to expand and improve its services, (ii) to 
increase the number of persons which it is able to serve, (iii) to 
modernize its facilities, (iv) to improve the administration of its 
service programs, and (v) to establish a financial reserve for the 
purpose of offsetting the decrease in the percentage of Federal 
participation in program operations in future years. 
(d)(1) For initial grants under subsection (a) there are authorized to 
be appropriated $30,000,000 for the fiscal year ending September 30, 
1982, $35,000,000 for the fiscal year ending September 30, 1983, and 
$40,000,000 for the fiscal year ending September 30,1984. 
(2) There are authorized to be appropriated for the fiscal year 
ending September 30,1982, and for each of the next nine fiscal years 
such sums as may be necessary to make grants, for the number of 
years prescribed by subsection (a)(3), to community mental health 
centers which received an initial grant for operations under the 
Community Mental Health Centers Act or this Act for a fiscal year 
beginning before October 1,1984. 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1573 
(3) Of the total amount appropriated under paragraphs (1) and (2) 
for any fiscal year, the Secretary may not obligate more than 5 
percent for grants under subsection (a) to community mental health 
centers which are operated by hospitals and which have advisory 
committees as prescribed by section 101(cX2). 
Restriction. 
GRANTS FOR SERVICES FOR CHRONICALLY MENTALLY ILL INDIVIDUALS 
SEC. 202. (a)(1) The Secretary may make grants to any State mental 
health authority, community mental health center, or other public or 
nonprofit private entity for projects for the provision of mental 
health and related support services for chronically mentally ill 
individuals. No grant may be made under this subsection for a project 
unless the project provides for at least the following: 
(A) The identification of the chronically mentally ill individ-
uals residing in the area to be served by the project. 
(B) Assistance to such individuals in gaining access to essential 
mental health services, medical and dental care and rehabilita-
tion services, and employment, housing, and other support serv-
ices designed to enable chronically mentally ill individuals to 
function outside of inpatient institutions to the maximum extent 
of their capabilities. 
(C) Assuring the availability, for each such chronically men-
tally ill individual who needs both mental health and related 
support services, of an individual to assume responsibility for 
seeing to it that the individual receives any such service that the 
individual needs. 
(D) Coordinating the provision of mental health and related 
support services to such individuals with the provision of other 
services to them. 
(2) A grant under this subsection for a project in a mental health 
service area served by a community mental health center may be 
made only to the community mental health center or to the State 
mental health authority of the State in which the £irea is located, 
except that, if the Secretary finds that because of exceptional circum-
stances in the mental health service area the chronically mentally ill 
individuals in the area would be otherwise underserved, a grant may 
be made to any other public or private nonprofit entity. 
(3) In considering applications for grants under this subsection, the 
Secretary shall give special consideration to applications for projects 
designed to supplement and strengthen existing community support 
services. 
(b) The Secretary may make grants to any State mental health 
authority to— 
(1) improve the skills of personnel providing services to chron-
ically mentally ill individuals by providing or arranging for the 
provision of inservice training, other training, or retraining for 
such personnel; or 
(2) coordinate the operations of State agencies or intrastate 
regional agencies responsible for mental heedth and related 
support services for chronically mentally ill individuals, and 
coordinate the provision of mental health and support services 
for chronically mentally ill individuals with the provision of 
services to such individuals under titles IV, V, XVI, XVIII, XIX, 
and XX of the Social Security Act and under the Rehabilitation 
Act of 1973, the United States Housing Act, the Comprehensive 
Employment and Training Act, the Developmental Disabilities 
42 u s e 9432. 
Service 
requirements. 
Recipients; 
restriction, 
exception. 
Applications, 
special 
consideration. 
Grants, 
purposes. 
42 u s e 601, 701, 
1381, 1395, 1396, 
1397. 
29 u s e 701 note, 
42 u s e 1437 
note. 
29 u s e 801 note. 
94 STAT. 1574 
PUBLIC LAW 96-398—OCT. 7, 1980 
42 u s e 6001 
note, 3001 note. 
Limitation. 
Grant 
computation. 
Costs exceeded 
by funds, grant 
adjustment. 
Governing body. 
Advisory 
committee. 
Assistance and Bill of Rights Act, the Older Americans Act, and 
other Federal and State statutes. 
(c)(1) No entity may receive more than eight grants under this 
section. 
(2) The amount of any grant under subsection (a) or (b) shall be 
determined by the Secretary, except that the amount of^ 
(A) the first and second grant may not exceed 90 percent of the 
costs (as determined by the Secretary) of the project for which the 
grant is made; 
(B) the third grant may not exceed 80 percent of such costs; 
(C) the fourth grant may not exceed 70 percent of such costs; 
(D) the fifth grant may not exceed 60 percent of such costs; 
(E) the sixth grant may not exceed 50 percent of such costs; 
(F) the seventh grant may not exceed 40 percent of such costs; 
and 
(G) the eighth grant may not exceed 30 percent of such costs. 
(3) If in a fiscal year the sum of— 
(A) the total of State, local, and other funds, and of the fees, 
premiums, and third-party reimbursements collected in that 
year, and 
(B) the amount of the grant received under subsection (a) by an 
entity, 
exceeds its actual costs of operation for that year and if the entity is 
eligible to receive a grant under subsection (a) in the succeeding year, 
an adjustment in the amount of that grant shall be made in such a 
manner that the entity may retain such an amount (not to exceed 50 
per centum of the amount by which such sum exceeded such costs) as 
the entity can demonstrate to the satisfaction of the Secretary will be 
used to enable the entity (i) to expand and improve its services, (ii) to 
increase the number of persons which it is able to serve, (iii) to 
modernize its facilities, (iv) to improve the administration of its 
service programs, and (v) to establish a financial reserve for the 
purpose of offsetting the decrease in the percentage of Federal 
participation in program operations in future years. 
(d)(1) Except as provided in paragraph (3), no grant may be made to 
an entity under subsection (a) or (b) unless the entity meets the 
requirements of paragraph (2). 
(2)(A) Except as provided in subparagraph (B), an applicant for a 
grant under subsection (a) to provide the services described in that 
subsection shall have a governing body which (i) is composed of 
individuals who reside in the entity's mental health service area and 
who, as a group, represent the residents of that area taking into 
consideration their employment, age, sex, and place of residence, and 
other demographic characteristics of the area, and (ii) is required to 
meet at least once a month, to establish general policies for the entity 
(including a schedule of hours during which services will be pro-
vided), to approve the entity's annual budget, and to approve the 
selection of a director for the entity. At least one-half of the members 
of such body shall be individuals who are not providers of health care. 
(B) An applicant which is a hospital, a State agency, or other public 
or nonprofit private entity which does not have as its primary 
purpose the provision of mental health services under grants under 
subsection (a) may appoint a committee which advises it with respect 
to the operations of the entity which are funded with a grant under 
subsection (a) or Ot)) and which is composed of individuals who reside 
in the entity's mental health service area, who are representative of 
the residents of the area as to employment, age, sex, place of 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1575 
residence, and other demographic characteristics, and at least one-
half of whom are not providers of health care. 
(3) Paragraph (1) does not apply with respect to an entity which is a 
primary care center, community health center, or migrant health 
center and which meets the applicable requirements of part D of title 
III of the Public Health Service Act. 
(4) For purposes of paragraph (2), the term "provider of health 
care" has the same meaning as is prescribed for that term by section 
1531(3) of the Public Health Service Act. 
(e) For grants under subsections (a) and (b) there are authorized to 
be appropriated $45,000,000 for the fiscal year ending September 30, 
1982, $50,000,000 for the fiscal year ending September 30, 1983, and 
$60,000,000 for the fiscal year ending September 30,1984. 
42 u s e 255. 
"Provider of 
health care." 
42 u s e 300n. 
Appropriation 
authorization. 
GRANTS FOR SERVICES FOR SEVERELY MENTALLY DISTURBED CHILDREN 
AND ADOLESCENTS 
SEC. 203. (a) The Secretary may make grants to any State mental 
health authority, community mental health center, or other public or 
nonprofit private entity for the provision of mental health and 
related support services for severely mentally disturbed children and 
adolescents and for members of their families. The services which 
may be provided under a grant under this subsection shall include at 
least one of the following: 
(1) The identification and assessment of the needs of severely 
mentally disturbed children and adolescents and the provision of 
needed mental health and related support services which are not 
provided by existing programs. 
(2) Assuring the availability of appropriate personnel to be 
responsible for providing, or arranging for the provision of, the 
needed mental health and related support services for such 
children and adolescents. 
(3) The provision of auxiliary mental health services under the 
Education for all Handicapped Children Act of 1975 to such 
children and adolescents who are handicapped. 
(4) The establishment of cooperative arrangements with juve-
nile justice authorities, educational authorities, and other au-
thorities and agencies that come in contact with such children 
and adolescents to ensure referral of such children and adoles-
cents for appropriate mental health and related support services. 
A grant made under this subsection for a project in a mental health 
service area served by a community mental health center may be 
made only to the community mental health center or to the State 
mental health authority of the State in which the area is located, 
except that, if the Secretary finds that because of exceptional circum-
stances in the mental health service area the severely mentally 
disturbed children and adolescents in the area would otherwise be 
underserved, a grant may be made to any other public or private 
nonprofit entity. 
(b) The Secretary may make grants to any public entity for projects 
to coordinate the provision of mental health and related support 
services to severely mentally disturbed children and adolescents with 
the activities of community agencies and State agencies and with the 
provision of services available to such children and adolescents under 
titles IV, V, XVI, XIX, and XX of the Social Security Act and under 
the Education for All Handicapped Children Act of 1975, the Devel-
opmental Disabilities Assistance and Bill of Rights Act, the Rehabili-
tation Act of 1973, and other Federal and State statutes. 
42 u s e 9433. 
Service 
requirements. 
20 u s e 1401 
note. 
Recipients; 
restriction, 
exception. 
Grants, 
purposes. 
42 u s e 601, 701, 
1381, 1396, 1397. 
20 u s e 1401 
note. 
42 u s e 6001 
note. 
29 u s e 701 note. 
94 STAT. 1576 
PUBLIC LAW 96-398—OCT. 7, 1980 
Limitation. 
Grant 
computation. 
Costs exceeded 
by funds, grant 
adjustment. 
Governing body. 
Advisory 
committee. 
(c)(1) No entity may receive more than eight grants under this 
section. 
(2) The amount of any grant under subsection (a) or (b) shall be 
determined by the Secretary, except that the amount of— 
(A) the first and second grant may not exceed 90 percent of the 
costs (as determined by the Secretary) of the project for which the 
grant is made; 
(B) the third grant may not exceed 80 percent of such costs; 
(C) the fourth grant may not exceed 70 percent of such costs; 
(D) the fifth grant may not exceed 60 percent of such costs; 
(E) the sixth grant may not exceed 50 percent of such costs; 
(F) the seventh grant may not exceed 40 percent of such costs; 
and 
(G) the eighth grant may not exceed 30 percent of such costs. 
(3) If in a fiscal year the sum of— 
(A) the total of State, local, and other funds, and of the fees, 
premiums, and third-party reimbursements collected in that 
year, and 
(B) the amount of the grant received under subsection (a) by an 
entity, 
exceeds its actual costs of operation for that year and if the entity is 
eligible to receive a grant under subsection (a) in the succeeding year, 
an adjustment in the amount of that grant shall be made in such a 
manner that the entity may retain such an amount (not to exceed 50 
per centum of the amount by which such sum exceeded such costs) as 
the entity can demonstrate to the satisfaction of the Secretary will be 
used to enable the entity (i) to expand and improve its services, (ii) to 
increase the number of persons which it is able to serve, (iii) to 
modernize its facilities, (iv) to improve the administration of its 
service programs, and (v) to establish a financial reserve for the 
purpose of offsetting the decrease in the percentage of Federal 
participation in program operations in future years. 
(d)(1) Except as provided in paragraph (3), no grant may be made to 
an entity under subsection (a) or (b) unless the entity meets the 
requirements of paragraph (2). 
(2)(A) Except as provided in subparagraph (B), an applicant for a 
grant under subsection (a) to provide the services described in that 
subsection shall have a governing body which (i) is composed of 
individuals who reside in the entity's mental health service area and 
who, as a group, represent the residents of that area taking into 
consideration their emplo5nnent, age, sex, and place of residence, and 
other demographic characteristics of the area, and (ii) is required to 
meet at least once a month, to establish general policies for the entity 
(including a schedule of hours during which services will be pro-
vided), to approve the entity's annual budget, and to approve the 
selection of a director for the entity. At least one-half of the members 
of such body shall be individuals who are not providers of health care. 
(B) An applicant which is a hospital, a State agency, or other public 
or nonprofit private entity which does not have as its primary 
purpose the provision of mental health services under grants under 
subsection (a) may appoint a committee which advises it with respect 
to the operations of the entity which are funded with a grant under 
subsection (a) or (b) and which is composed of individuals who reside 
in the entity's mental health service area, who are representative of 
the residents of the area as to employment, age, sex, place of 
residence, and other demographic characteristics, and at least one-
half of whom are not providers of health care. 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1577 
(3) Paragraph (1) does not apply with respect to an entity which is a 
primary care center, community health center, or migrant health 
center and which meets the applicable requirements of part D of title 
III of the Public Health Service Act. 
(4) For purposes of paragraph (2), the term "provider of health 
care" has the same meaning as is prescribed for that term by section 
1531(3) of the Public Health Service Act. 
(e) For grants under subsections (a) and (b) there are authorized to 
be appropriated $10,000,000 for the fiscal year ending September 30, 
1982, $12,000,000 for the fiscal year ending September 30, 1983, and 
$15,000,000 for the fiscal year ending September 30,1984. 
GRANTS FOR MENTAL HEALTH SERVICES FOR ELDERLY INDIVIDUALS AND 
OTHER PRIORITY POPULATIONS 
SEC. 204. (a)(1) The Secretary may make grants to any public or 
nonprofit private entity for projects for services for elderly individ-
uals. Each such project shall include at least the following: 
(A) The location of elderly individuals in the mental health 
service area or areas served by the entity who are in need of 
mental health services. 
(B) The provision or arrangement for the provision of medical 
differential diagnoses of elderly individuals in such area or areas 
to distinguish between their need for mental health services and 
other medical care. 
(C) The specification of the mental health needs of elderly 
individuals in such area or areas and the mental health and 
support services required to meet such needs. 
(D) The provision of— 
(i) the mental health and support services specified under 
subparagraph (C) in the communities in such area or areas, 
or 
(ii) such services for elderly individuals in nursing homes 
and intermediate care facilities in such area or areas and 
training of the employees of such homes and facilities in the 
provision of such services. 
(2) The Secretary may make grants to any public or nonprofit 
private entity in a mental health service area in which, as deter-
mined by the Secretary, the services described in paragraph (1) are 
being provided to enable the entity to— 
(A) assure the availability of appropriate personnel to be 
responsible for the provision of or for arranging for the provision 
of such services to elderly individuals; or 
(B) coordinate the provision of such services to elderly individ-
uals with (i) the area agency on aging (as defined in the Older 
Americans Act) and other community agencies providing mental 
health and related support services for elderly individuals, and 
(ii) with the provision of services available to elderly individuals 
under titles XVI, XVIII, XIX, and XX of the Social Security Act 
and under the Older Americans Act, the Comprehensive Alcohol 
Abuse and Alcoholism Prevention, Treatment, and Rehabilita-
tion Act of 1970, the Drug Abuse Prevention, Treatment, and 
Rehabilitation Act, the United States Housing Act, the Domestic 
Volunteer Service Act of 1973, and other Federal and State 
statutes. 
(3)(A) No entity may receive more than eight grants under para-
graph (1) or (2). 
(B) The amount of any grant under paragraph (1) or (2) shall be 
determined by the Secretary, except that the amount of— 
42 u s e 255. 
"Provider of 
health care." 
42 u s e 300n. 
Appropriation 
authorization. 
42 u s e 9434. 
Service 
requirements. 
Grants, 
purposes. 
42 u s e 1381, 
1395, 1396, 1397. 
42 u s e 3001 
note. 
42 u s e 4541 
note. 
21 u s e 1101 
note, 42 USe 
1437 note. 
42 u s e 4951 
note. 
Limitation. 
Grant 
computation. 
94 STAT. 1578 
PUBLIC LAW 96-398—OCT. 7, 1980 
Costs exceeded 
by funds, grant 
adjustment. 
Recipients; 
restriction, 
exception. 
Governing body. 
Advisory 
committee. 
(i) the first and second grant may not exceed 90 percent of the 
costs (as determined by the Secretary) of the project for which the 
grant is made; 
(ii) the third grant may not exceed 80 percent of such costs; 
(iii) the fourth grant may not exceed 70 percent of such costs; 
(iv) the fifth grant may not exceed 60 percent of such costs; 
(v) the sixth grant may not exceed 50 percent of such costs; 
(vi) the seventh grant may not exceed 40 percent of such costs; 
and 
(vii) the eighth grant may not exceed 30 percent of such costs. 
(C) If in a fiscal year the sum of— 
(i) the total of State, local, and other funds, and of the fees, 
premiums, and third-party reimbursements collected in that 
year, and 
(ii) the amount of the grant received under paragraph (1) by an 
entity, 
exceeds its actual costs of operation for that year and if the entity is 
eligible to receive a grant under paragraph (1) in the succeeding year, 
an adjustment in the amount of that grant shall be made in such a 
manner that the entity may retain such an amount (not to exceed 50 
per centum of the amount by which such sum exceeded such costs) as 
the entity can demonstrate to the satisfaction of the Secretary will be 
used to enable the entity (I) to expand and improve its services, (II) to 
increase the number of persons which it is able to serve, (III) to 
modernize its facilities, (IV) to improve the administration of its 
service programs, and (V) to establish a financial reserve for the 
purpose of offsetting the decrease in the percentage of Federal 
participation in program operations in future years. 
(D) A grant made under paragraph (1) for a project in a mental 
health service area served by a community mental health center may 
be made only to the community mental health center or to the State 
mental health authority of the State in which the area is located, 
except that, if the Secretary finds that because of exceptional circum-
stances in the mental health service area the elderly individuals in 
the area would otherwise be underserved, a grant may be made to 
any other public or private nonprofit entity. 
(E)(i) Except as provided in clause (iii), no grant may be made to an 
entity under paragraph (1) or (2) unless the entity meets the require-
ments of clause (ii). 
(ii)(I) Except as provided in subclause (I), an applicant for a grant 
under paragraph (1) to provide the services described in that para-
graph shall have a governing body which is composed of individuals 
who reside in the entity's mental health service area and who, as a 
group, represent the residents of that area taking into consideration 
their employment, age, sex, and place of residence, and other demo-
graphic characteristics of the area, and which is required to meet at 
least once a month, to establish general policies for the entity 
(including a schedule of hours during which services will be pro-
vided), to approve the entity's annual budget, and to approve the 
selection of a director for the entity. At least one-half of the members 
of such body shall be individuals who are not providers of health care. 
(II) An applicant which is a hospital, a State agency, or other public 
or nonprofit private entity which does not have as its primary 
purpose the provision of mental health services under grants under 
paragraph (1) may appoint a committee which advises it with respect 
to the operations of the entity which are funded with a grant under 
paragraph (1) or (2) and which is composed of individuals who reside 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1579 
in the entity's mental health service area, who are representative of 
the residents of the area as to emplo3rment, age, sex, place of 
residence, and other demographic characteristics, and at least one-
half of whom are not providers of health care. 
(iii) Clause (i) does not apply with respect to an entity which is a 
primary care center, community health center, or migrant health 
center and which meets the applicable requirements of part D of title 
III of the Public Health Service Act. 
(iv) For purposes of clause (ii), the term "provider of health care" 
has the same meaning as is prescribed for that term by section 1531(3) 
of the Public Health Service Act. 
(b)(1) The Secretary may make grants to any public or nonprofit 
private entity for any project for mental health services which— 
(A) is designed to serve principally one or more priority 
population groups in a mental health service area, and 
(B) is available to all residents of the area. 
(2) A grant made under paragraph (1) for a project in a mental 
health service area served by a community mental health center may 
be made only to the community mental health center or to the State 
mental health authority of the State in which the area is located and 
only if the Secretary finds that because of exceptional circumstances 
in the mental health service area priority populations in the area 
would be otherwise underserved. 
(3)(A) Not more than four grants may be made under paragraph (1) 
to the same entity for mental health services for the same priority 
population group or groups, except that, if the entity is a community 
mental health center or other entity in a mental health service area 
served by a community mental health center, the number of grants 
which it may receive for the same population group or groups may 
not exceed two. 
(B) In any fiscal year not more than two grants may be made under 
paragraph (1) for projects in one mental health service area and the 
total number of grants that may be made for projects in such an area 
under paragraph (1) may not exceed eight. 
(C) The amount of any grant under paragraph (1) shall be deter-
mined by the Secretary, except that the amount o
f
— 
(i) the first such grant may not exceed 90 percent of the costs of 
the project (as determined by the Secretary) for which the grant 
is made, 
(ii) the second such grant may not exceed 80 percent of such 
costs, 
(iii) the third such grant may not exceed 70 percent of such 
costs, and 
(iv) the fourth such grant may not exceed 60 percent of such 
costs. 
(D) If in a 
fiscal 
year the sum o
f
— 
(i) the total of State, local, and other funds, and of the fees, 
premiums, and third-party reimbursements collected in that 
year, and 
(ii) the amount of the grant received under paragraph (1) by an 
entity, 
exceeds its actual costs of operation for that year and if the entity is 
eligible to receive a grant under paragraph (1) in the succeeding yeeir, 
an adjustment in the amount of that grant shall be made in such a 
manner that the entity may retain such an amount (not to exceed 50 
per centum of the amount by which such sum exceeded such costs) as 
the entity can demonstrate to the satisfaction of the Secretary will be 
used to enable the entity (I) to expand and improve its services, (II) to 
42 u s e 255. 
"Provider of 
health care." 
42 u s e 300n. 
Recipients, 
restriction. 
Limitation. 
Grant 
computation. 
eosts exceeded 
by funds, grant 
adjustment. 
94 STAT. 1580 
PUBLIC LAW 96-398—OCT. 7, 1980 
Criteria. 
Governing body. 
Advisory 
committee. 
increase the number of persons which it is able to serve, (HI) to 
modernize its facilities, (IV) to improve the administration of its 
service programs, and (V) to establish a financial reserve for the 
purpose of offsetting the decrease in the percentage of Federal 
participation in program operations in future years. 
(4) For purposes of this subsection, if a grant could be made under 
subsection (a) or section 202 or 203 for a project designed primarily to 
serve a particular population group, such population g^oup shall not 
be included in the priority population groups for wmch grants are 
authorized under this subsection. 
(c) An application for a grant under subsection O
t
)
) may be approved 
only i
f
— 
(1) the application contains satisfactory assurances that the 
project for which the application is made will lead to increased or 
more appropriate mental health services for a priority popula-
tion group or to the development of mental health services for 
such a group; 
(2) the application contains satisfactory assurances that mem-
bers of the priority population group or groups to be served by 
the project will be afforded reasonable opportunity to comment 
on performance under the project; and 
(3) the applicant (A) will during the first three years that it 
receives a grant under subsection (b) provide outpatient mental 
health services and any two of the following mental health 
services determined to be of the greatest need for the priority 
population to be served by the applicant: inpatient, screening, 
foUowup, consultation and education, and emergency services, 
and (B) unless the applicant is a community mental health center 
or a State mental health authority receiving a grant under 
subsection (b) as authorized by paragraph (2) of that subsection, 
has a plan satisfactory to the Secretary for the provision of all 
the mental health services described in clause (A) upon the 
expiration of the first three years that it receives a grant under 
subsection (b). 
The Secretary may not approve an application of an entity which has 
received a grant for three years under subsection (b) unless the 
applicant is providing all the mental health services described in 
paragraph (3)(A). 
(d)(1) Except as provided in paragraph (3), no grant may be made to 
an entity under subsection (b) unless the entity meets the require-
ments of 
paragraph (2). 
(2)(A) Except as provided in subparagraph (B), an applicant for a 
grant under subsection (b) to provide the services described in that 
subsection shall have a governing body which (i) is composed of 
individuals who reside in the entity's mental health service area and 
who, as a group, represent the residents of that area taking into 
consideration their employment, age, sex, and place of residence, and 
other demographic characteristics of the area, and (ii) is required to 
meet at least once a month, to establish general policies for the entity 
(including a schedule of hours during which services will be pro-
vided), to approve the entity's annual budget, and to approve the 
selection of a director for the entity. At least one-half of the members 
of 
such body shall be individuals who are not providers of health care. 
(B) An applicant which is a hospital, a State agency, or other public 
or nonprofit private entity which does not have as its primary 
purpose the provision of mental health services under grants under 
subsection (b) may appoint a committee which advises it with respect 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1581 
to the operations of the entity which are funded with a grant under 
subsection (b) and which is composed of individuals who reside in the 
entity's mental health service area, who are representative of the 
residents of the area as to employment, age, sex, place of residence, 
and other demographic characteristics, and at least one-half of whom 
are not providers of health care. 
(3) Paragraph (1) does not apply with respect to an entity which is a 
primary care center, community health center, or migrant health 
center and which meets the applicable requirements of part D of title 
III of the Public Health Service Act. 
(4) For purposes of paragraph (2), the term "provider of health 
care" has the same meaning as is prescribed for that term by section 
1531(3) of the Public Health Service Act. 
(e) For grants under this section there are authorized to be 
appropriated $30,000,000 for the fiscal year ending September 30, 
1982, $35,000,000 for the fiscal year ending September 30, 1983, and 
$40,000,000 for the fiscal year ending September 30, 1984. Not less 
than 40 percent of the amount appropriated under this subsection for 
any fiscal year shall be obligated by the Secretary for grants under 
subsection (a). 
42 u s e 255. 
"Provider of 
health care." 
42 u s e 300n. 
Appropriation 
authorization. 
GRANTS FOR NON-REVENUE-PRODUCING SERVICES 
SEC. 205. (a)(1) The Secretary may make grants to any public or 
nonprofit private community mental health center to assist in 
meeting the costs (as determined by the Secretary by regulation) of— 
(A) providing the consultation 
and education 
services 
described in clause (iv) of section 101(b)(1)(A), 
(B) providing the foUowup services described in clause (iii) of 
such section, 
(C) administering the mental health service programs of the 
center, 
(D) providing individuals who will be responsible for assuring 
that individuals in need of both mental health services and 
support services receive each of the services that they need, and 
(E) any other non-revenue-producing service which the Secre-
tary determines is appropriate for a community mental health 
center to provide. 
(2) To be eligible for a grant under paragraph (1) a community 
mental health center must— 
(A) have received a grant under section 203(a) of the Commu-
nity Mental Health Centers Act, under section 220 of such Act as 
in effect before July 29,1975, or under section 201 of this Act; and 
(B) because of the limitations on the period for which a center 
may receive such a grant or on the number of such grants the 
center may receive, be no longer eligible to receive such a grant. 
(b) An application for a grant under subsection (a) shall contain 
assurances satisfactory to the Secretary that the applicant will, 
during the period which it receives a grant under subsection (a), 
provide, at a minimum— 
(1) the comprehensive mental health services described in 
clauses (i) through (iv) of section 1010t>)(l)(A), and 
(2) any service described in section l()l(b)(l)(B) which the 
center was providing in the last year it received a grant under 
the Community Mental Health Centers Act or this Act for its 
operations. 
Such an application shall also include information regarding the 
extent to which and manner in which the applicant has served 
Service 
requirements. 
42 u s e 9435. 
Eligibility. 
42 u s e 2689b. 
79 Stat. 428, 84 
Stat. 56. 
Assurances. 
42 u s e 2689 
note. 
94 STAT. 1582 
PUBLIC LAW 96-398—OCT. 7, 1980 
Limitation. 
Grant 
computation. 
Population 
determination. 
Appropriation 
authorization. 
chronically mentally ill individuals in prior years (if such service has 
been provided) and proposes to serve chronically mentally ill individ-
uals during the fiscal year for which the grant is sought. 
(c)(1) No community mental health center may receive more than 
five grants under subsection (a). 
(2) The amount of a grant under subsection (a) shall be determined 
by the Secretary, except that no grant may exceed the product of 
$1.25 and the population of the mental health service area of the 
community mental health center receiving the grant. The population 
of a mental health service area shall be determined on the basis of the 
latest figures for the populations of the States available from the 
Department of Commerce. 
(d) For grants under subsection (a) there are authorized to be 
appropriated $30,000,000 for the fiscal year ending September 30, 
1982, $35,000,000 for the fiscal year ending September 30, 1983, and 
$40,000,000 for the fiscal year ending September 30,1984. 
Service 
requirements. 
42 u s e 9436. 
Affiliation 
agreement. 
Projects. 
GRANTS FOR MENTAL HEALTH SERVICES IN HEALTH CARE CENTERS 
SEC. 206. (a)(1) For the purpose of assisting health care centers to 
participate appropriately in the provision of mental health services 
to their patients, the Secretary may make grants to— 
(A) any public or nonprofit private entity which provides 
mental health services that include at least twenty-four-hour 
emergency services, outpatient services, and consultation and 
education services (as described in section 101(b)(l)(A)(iv)) and 
has in effect an agreement of affiliation, described in paragraph 
(2), with an entity which is a health care center; or 
(B) any public or nonprofit private health care center which 
has in effect an agreement of affiliation, described in paragraph 
(2), with an entity described in subparagraph (A). 
(2) An agreement of affiliation referred to in paragraph (1) is an 
agreement between a mental health services entity described in 
paragraph (1)(A) and a health care center which agreement— 
(A) describes the geographical area the residents of which will 
be served by the mental health services to be provided under the 
agreement; 
(B) provides for the employment of at least one mental health 
professional to serve as a liaison between the parties to the 
agreement and includes a description of the qualifications to be 
required of that person and of any other professional mental 
health personnel to be employed under the agreement; 
(C) provides satisfactory assurances that the mental health 
services entity will make mental health services available to 
patients of the center referred to it by the liaison or other mental 
health professionals; and 
(D) includes transportation arrangements and other arrange-
ments for effecting referral from the center to the mental health 
services entity of patients needing the services of such entity. 
(b) Any grant under subsection (a) may be made for a project for 
any one or more of the following: 
(1) The costs of the liaison or other mental health professionals 
providing services in the health care center in accordance with 
an agreement of affiliation. 
(2) Mental health services provided by other personnel of the 
center which the mental health services entity determines can be 
appropriately provided by such personnel. 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1583 
(3) Consultation and inservice training on mental health pro-
vided to personnel of the health care center by the mental health 
services entity. 
(4) Establishing liaison between the center and other providers 
of mental health services or support services. 
(c)(1) No entity may receive more than eight grants under subsec-
tion (a). 
(2) The amount of any grant under subsection (a) shall be deter-
mined by the Secretary, except that the amount o
f
— 
(A) the first and second grant may not exceed 90 percent of the 
costs (as determined by the Secretary) of the project for which the 
grant is made; 
(B) the third grant may not exceed 80 percent of such costs; 
(C) the fourth grant may not exceed 70 percent of such costs; 
(D) the fifth grant may not exceed 60 percent of such costs; 
(E) the sixth grant may not exceed 50 percent of such costs; 
(F) the seventh grant may not exceed 40 percent of such costs; 
and 
(G) the eighth grant may not exceed 30 percent of such costs. 
(3) If in a fiscal year the sum o
f
— 
(A) the total of State, local, and other funds, and of the fees, 
premiums, £md third-party reimbursements collected in that 
year, and 
(B) the amount of the grant received under subsection (a) by a 
center or other entity, 
exceeds its actual costs of operation for that year and if the center or 
entity is eligible to receive a grant under subsection (a) in the 
succeeding year, an adjustment in the amount of that grant shall be 
made in such a manner that the center or entity may retain such an 
amount (not to exceed 50 per centum of the amount by which such 
sum exceeded such costs) as the center or entity can demonstrate to 
the satisfaction of the Secretary will be used to enable the center or 
entity (i) to expand and improve its services, (ii) to increase the 
number of persons which it is able to serve, (iii) to modernize its 
facilities, (iv) to improve the administration of its service programs, 
and (v) to establish a financial reserve for the purpose of offsetting 
the decrease in the percentage of Federal participation in program 
operations in future years. 
(d) For grants under subsection (a) there are authorized to be 
appropriated $15,000,000 for the fiscal year ending September 30, 
1982, $17,500,000 for the fiscal year ending September 30, 1983, and 
$20,000,000 for the fiscal year ending September 30,1984. 
(e) For purposes of this section, the term "health care center" 
includes an outpatient facility operated in connection with a hospital, 
a primary care center, a community health center, a migrant health 
center, a clinic of the Indian Health Service, a skilled nursing home, 
an intermediate care facility, and an outpatient health care facility of 
a medical group practice, a public health department, or a health 
maintenance organization. 
Limitation. 
Grant 
computation. 
Costs exceeded 
by funds, grant 
adjustment. 
Appropriation 
authorization. 
GRANTS AND CONTRACTS FOR INNOVATIVE PROJECTS 
SEC. 207. (a) The Secretary may make grants to any public or 
nonprofit private entity for— 
(1) projects for the training and retraining of employees 
adversely affected by changes in the delivery of mental health 
42 u s e 9437. 
79-194 
O—81—pt. 2 
20 : QL3 
94 STAT. 1584 
PUBLIC LAW 96-398—OCT. 7, 1980 
Limitation. 
Amount, 
determination. 
Application. 
services and for providing such employees assistance in securing 
employment; 
(2) projects for the innovative use of personnel in the manage-
ment and delivery of mental health services; and 
(3) any other innovative project of national significance 
respecting mental health services and mental health services 
personnel. 
The Secretary may enter into contracts for the projects described in 
this subsection with any private entity which is engaged solely in the 
provision of mental hesJth services. 
(b)(1) The total number of grants and contracts which an entity 
may receive under subsection (a) may not exceed five. 
(2) The amount of any grant or contract under subsection (a) shall 
be determined by the Secretary. 
(c) No contract may be entered into under subsection (a) unless an 
application therefor has been submitted to and approved by the 
Secretary. The application shall be submitted in such form and 
manner and shall contain such information as the Secretary may 
prescribe. 
(d) Of the total amount appropriated for any fiscal year under 
sections 201 through 206, 5 percent is available to the Secretary in 
such fiscal year for grants and contracts under subsection (a). Of the 
funds obligated in any fiscal year by the Secretary for such grants 
and contracts, not less than 50 percent shall be obligated for approv-
able projects described in subsection (a)(1). 
42 u s e 9438. 
42 u s e 289k-l. 
Application 
requirements. 
GRANTS FOR THE PREVENTION OF MENTAL ILLNESS AND THE 
PROMOTION OF MENTAL HEALTH 
SEC. 208. (a) The Secretary may make grants to any public or 
nonprofit private entity for projects for the prevention of mental 
illness and the promotion of mental health or to demonstrate the 
effectiveness of intervention techniques and mental health promo-
tion activities in the— 
(1) maintenance and improvement of the mental health of 
individuals and groups of individuals particularly susceptible to 
mental illness, 
(2) prevention of the onset of mental illness in such individuals 
and groups, 
(3) prevention of the deterioration of the mental health of such 
individuals and groups, 
(4) education of the general public regarding mental health 
problems and mental illness, the prevention of mental health 
problems and mental illness, and the promotion of mental 
health, and 
(5) provision of screening, consultation, referral, and education 
in public school systems and in places of emplojnnent to detect 
and prevent early mental health problems and to promote 
mental health. 
O
b
) Projects supported by grants under subsection (a) shall be 
consistent with national goals and priorities regarding the preven-
tion of mental illness and promotion of mental health determined by 
the Director of the National Institute of Mental Health under section 
455(d)(1) of the Public Health Service Act. 
(c) An application for a grant under subsection (a) shall— 
(1) define the techniques and mental health promotion activi-
ties to be funded by the grant; 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1585 
(2) define the individuals or groups of individuals to be served 
by such techniques and activities; and 
(3) provide for the evaluation of the effectiveness of such 
techniques and activities and describe the methodology to be 
used in making such evaluation. 
(d) No entity may receive more than eight grants under subsection 
(a). The amount of a grant under subsection (a) shall be determined by 
the Secretary. 
(e) For the purpose of grants under subsection (a) there are 
authorized to be appropriated $6,000,000 for the fiscal year ending 
September 30, 1982, $7,000,000 for the fiscal year ending September 
30,1983, and $8,000,000 for the fiscal year ending September 30,1984. 
TITLE III—GENERAL PROVISIONS RESPECTING GRANT 
PROGRAMS 
PART A—STATE MENTAL HEALTH SERVICE PROGRAMS 
Limitation. 
Amount, 
determination. 
Appropriation 
authorization. 
STATE MENTAL HEALTH SERVICES PROGRAMS 
SEC. 301. The State mental health authority of and any entity in a 42 use 9451. 
State is not eligible to receive a grant or contract under title II or 
this title for any fiscal year unless such State has in effect a State 
mental health services program which— 
(1) has been prepared by the State mental health authority in 
consultation with the Statewide Health Coordinating Council of 
the State, and 
(2) is consistent with the provisions relating to mental health 
services of the State health plan prepared in accordance with 
section 1524(c)(2) of the Public Health Service Act. 
42 use 300m-3. 
CONTENTS OF PROGRAMS 
SEC. 302. A State mental health services program shall be submit-
ted in such form and manner as the Secretary prescribes. The 
program shall consist of an administrative part and a services part as 
follows: 
(1) The administrative part shall— 
(A) provide that the State mental health authority will 
assume responsibility for administration of the program; 
(B) provide for the designation of a State advisory council 
to consult with the State mental health authority in admin-
istering the program, which council shall include— 
(i) representatives of nongovernmental organizations 
or groups, and of State agencies, concerned with the 
planning, operation, or use of facilities for the provision 
of mental health services, and 
(ii) representatives of consumers and providers of such 
services who are familiar with the need for such serv-
ices, 
and the nonprovider members of which shall constitute at 
least one-half of the membership of the council; 
(C) provide that the State mental health authority will 
make such reports in such form and containing such infor-
mation as the Secretary may from time to time reasonably 
require, and will keep such records and afford such access 
thereto as the Secretary may find necessary to assure the 
correctness and verification of such reports; 
42 u s e 9452. 
Administrative 
part. 
State advisory 
council. 
Reports; records, 
access. 
94 STAT. 1586 
Data. 
Review; 
modifications, 
submittal to 
Secretary. 
Personnel 
standards. 
Employee 
protection. 
Services part. 
PUBLIC LAW 96-398—OCT. 7, 1980 
(D) provide that any statistics or other data included in the 
program or on which the program is based will conform to 
such criteria, standards, and other requirements relating to 
their form, method of collection, content, or other aspects as 
the Secretary may prescribe; 
(E) provide that the State mental health authority will 
from time to time, but not less often than annually, review 
the program and submit to the Secretary appropriate modifi-
cations thereof which it considers necessary; 
(F) include provisions, meeting such requirements as the 
Office of Personnel Management may prescribe, relating to 
the establishment and maintenance of personnel standards 
on a merit basis; and 
(G) include a statement of the arrangements made pursu-
ant to section 801. 
(2) The services part shall— 
(A) identify the mental health service areas within the 
State; 
(B) identify the need in each mental health service area of 
the State for mental health and related support services 
after consideration o
f
— 
(i) the demographic, economic, cultural, and social 
characteristics of the population of the area, and 
(ii) the special mental health services needs in the 
area of chronically mentally ill individuals, emotionally 
disturbed children and adolescents, elderly individuals, 
and other priority population groups; 
(C) identify and evaluate the public and private mental 
health facilities, the mental health personnel, and the 
mental health services available in each mental health 
service area, and determine the additional facilities, person-
nel, and services necessary to meet the mental health needs 
of each area; 
(D) identify the methods used (i) to determine the mental 
health needs of each mental health service area, and (ii) to 
evaluate the facilities, personnel, and services of each 
mental health service area; 
(E) provide the information described in subparagraphs (B) 
through (D) for mental health services and related support 
service needs which relate to more than one mental health 
service area; 
(F) list the mental health service needs of each mental 
health service area in the order of priority that such needs 
should be addressed through the use of existing Federal, 
State, and local resources; 
(G) identify measures which need to be taken to alleviate 
geographic, cultural, linguistic, and economic barriers with 
respect to the delivery of mental health services in the 
mental health service areas; 
(H) identify the legal rights of persons in the State who are 
mentally ill or otherwise mentally handicapped and describe 
any measure which needs to be taken to protect such rights; 
(I) describe the actions which need to be taken by the State 
and entities in communities of the State to coordinate the 
provision of mental health and related support services in 
the State; 
(J) describe, in specific terms, the actions the State mental 
health authority will take— 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1587 
(i) to continue the provision of appropriate services 
which have been provided by local entities in the State 
with financial assistance under the Community Mental 
Health Centers Act and this Act and for which Federal 
financial assistance is no longer available; 
(ii) to promote the development of comprehensive 
mental health services in each mental health service 
area where such services are currently unavailable; 
(iii) to ensure substantially that, within a five-year 
period after the program is in effect in the State (or 
within such longer period as the Secretary, upon request 
of the State mental health authority, permits)— 
(I) residents of public inpatient mental health 
facilities who have been inappropriately placed in 
such facilities are discharged, and, to the extent 
appropriate, are placed in the least-restrictive set-
tings and provided mental health and related sup-
port services appropriate to such persons' level of 
functioning; 
(II) persons who need to be placed in inpatient 
mental health facilities are placed in the least-
restrictive settings and provided mental health and 
related support services appropriate to such per-
sons' level of functioning; and 
(III) persons who are discharged from, or are in 
need of placement in, inpatient mental health facili-
ties are informed of available community-based 
facilities and programs providing mental health 
and related support services, and provided access to 
a sufficient number of adequately staffed and ade-
quately funded community-based facilities and pro-
grams providing mental health and related support 
services; and 
(iv) to assist the courts and other public agencies, and 
appropriate private agencies, in screening persons being 
considered for inpatient care in mental health facilities 
in the State in order to determine if such care is 
medically or psychologically indicated; 
(K) include a description of the services made available for 
mentally ill individuals in the State under titles IV, V, XVI, 
XVIII, XIX, and XX of the Social Security Act and under 
the Education for All Handicapped Children Act of 1975, the 
Older Americans Act, the Developmental 
Disabilities 
Assistance and Bill of Rights Act, the Comprehensive Alco-
hol Abuse and Alcoholism Prevention, Treatment, and 
Rehabilitation Act of 1970, the Drug Abuse Prevention, 
Treatment, and Rehabilitation Act, and other relevant Fed-
eral statutes; 
(L) describe the steps being taken in the State to coordi-
nate the provision of services under this Act with the 
provision of services under the Acts referred to in subpara-
graph (K); and 
(M) contain or be accompanied by such additional informa-
tion or assurances and meet such other requirements as the 
Secretary prescribes in order to achieve the purposes of this 
Act. 
42 u s e 2689 
note. 
Placement and 
discharge. 
Facilities and 
programs, 
information and 
Screening. 
Service 
description. 
42 u s e 601, 701, 
1381, 1395, 1396, 
1397. 
20 u s e 1401 
note. 
42 u s e 3001 
note. 
42 u s e 6001 
note. 
42 u s e 4541 
note. 
21 u s e 1101 
note. 
Service 
coordination. 
94 STAT. 1588 
PUBLIC LAW 96-398—OCT. 7, 1980 
MENTAL HEALTH PROVISIONS OF STATE HEALTH PLANS 
42 use 300m-2. 
SEC. 303. Section 1523(a)(1)(B) of the Public Health Service Act is 
amended by inserting after "the statewide health needs of the State" 
the following: ", including the need for mental health services in the 
State,". 
PART B—APPLICATIONS AND RELATED PROVISIONS 
Qualified State 
mental health 
authority. 
STATE ADMINISTRATION 
42 use 9461. 
SEC. 305. (a) The Secretary may enter into an agreement with any 
qualified State mental health authority of a State under which the 
authority will be the exclusive agent for the State and entities within 
the State for purposes of the financial assistance programs author-
ized by title II (other than the programs authorized by sections 207 
and 208). 
(b) For purposes of subsection (a), a qualified State mental health 
authority is an authority which meets the following requirements: 
(1) A State mental health authority shall demonstrate to the 
satisfaction of the Secretary (A) that it is effectively implement-
ing its State mental health services program prepared pursuant 
to section 301, and (B) that it, or another agency of the State, is 
making a good faith effort to establish and implement procedures 
for carrying out the requirements of paragraph (2). 
(2)(A) For the purpose of eliminating the overconcentration of 
chronically mentally ill individuals in any community or group 
of communities in a State, the State mental health authority of 
the State shall monitor the discharge and diversion of such 
individuals into communities by inpatient mental health 
facilities. 
(B) A State mental health authority shall administer a pro-
gram of services for chronically mentally ill individuals in the 
State who have been discharged or diverted from inpatient 
mental health facilities. Such program shall include at least the 
following: 
(i) The timely notification by the inpatient mental health 
facilities in the State to the appropriate community mental 
health centers or other entities of the discharge of and the 
location of the residence of each chronically mentally ill 
individual who has given an informed consent to such 
notification. 
(ii) Before a chronically mentally ill individual is dis-
charged from an inpatient mental health facility into a 
community, a prerelease consultation between the facility 
and the appropriate community mental health center or 
other entity respecting the individual if the individual has 
given an informed consent to such consultation. Such consul-
tation shall take place without delaying the discharge of 
such individual from the mental health facility. Such consul-
tation shall include a preliminary evaluation of the physical, 
mental, social, and monetary needs of the individual to be 
discharged, and an identification of the services and pro-
grams for which such individual is eligible. 
Treatment and 
(iii) Development by each inpatient mental health facility 
services plan. 
QJ ^ written treatment and services plan for each chronically 
mentally ill individual who is to be discharged or who is 
diverted by the facility and who has given an informed 
consent to the development of such plan. The plan shall be 
Chronically 
mentally ill 
individuals, 
discharge 
monitoring. 
Service program. 
Discharge, 
notification. 
Prerelease 
consultation. 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1589 
developed in consultation with a case manager in the com-
munity mental health center or other appropriate entity in 
the mental health service area in which such individual will 
or does reside. Such plan shall— 
(I) to the maximum extent feasible, be developed with 
the participation of the individual discharged or 
diverted and the family of such individual; 
(II) include appropriate living arrangements suited to 
the needs of the individual, and, if the individual resides 
or is to reside in a residence in which there are at least 
three other chronically mentally ill individuals with 
whom the individual is not related by blood or marriage 
and which charges the individual for residing in the 
residence, assure that the residence meets the require-
ments prescribed under subparagraph (C) or meets the 
comparable requirements established under section 
1616(e) of the Social Security Act. 
(III) describe appropriate mental health services and 
other needed services, such as medical and dental serv-
ices, rehabilitation services, vocational training and 
placement, social services, and living skills training; and 
(IV) identify specific programs and services for which 
the individual is eligible, including income support. 
There shall be a periodic reevaluation of the plan at least 
every one hundred and twenty days. 
(iv) In the case of a chronically mentally ill individual for 
whom a plan has been developed under clause (iii), designa-
tion of a case manager to be responsible for the implementa-
tion of the plan and the coordination of services under the 
plan. 
(v) The establishment and enforcement of minimum stand-
ards for the provision of foUowup care for the chronically 
mentally ill by community mental health centers and other 
appropriate entities. 
Compliance with the informed consent requirements of the 
program shall be determined in accordance with the law of the 
State in which the program is in effect. 
(C) A State mental health authority shall develop a program 
for regulating, in accordance with guidelines established by the 
Secretary, residences in which there are at least four chronically 
mentally ill individuals who are not related by blood or marriage, 
which charge such individuals for residing in the residence, and 
which do not meet the comparable requirements established 
under section 1616(e) of the Social Security Act. Such program 
shall include the following: 
(i) Minimum standards for approval of a residence, includ-
ing a standard which requires a mechanism to be available 
to the residents who are chronically mentally ill to provide 
referral to and assistance in reaching appropriate medical, 
dental, mental health, and other services not available at a 
residence, compliance with appropriate life safety, fire, and 
sanitation codes, and access for visitation during reasonable 
hours without prior notice by appropriate mental health and 
social service staff. 
(ii) Procedures for the evaluation, inspection, and monitor-
ing of the compliance of the residence with the requirements 
of the program, 
(iii) Remedies for noncompliance with such requirements. 
42 u s e 1382e. 
Periodic 
reevaluation. 
Residence 
approval, 
minimum 
standards. 
94 STAT. 1590 
PUBLIC LAW 96-398—OCT. 7, 1980 
Educational or 
informational 
services. 
Biennial report 
to Secretary. 
Agreement 
application. 
Notice, 
publication in 
Federal 
Register. 
Grants to States. 
Appropriation 
authorization. 
(D) A State mental health authority shall provide educational 
or informational services to educate the population of the State 
regarding the problems of chronically mentally ill individuals, 
the need for community involvement in programs designed to 
resolve the problems of chronically mentally ill individuals 
outside institutional settings, and the resources available or 
needed to help such programs succeed. 
(E) A State mental health authority shall improve the skills of 
personnel involved in providing services for chronically mentally 
ill individuals through inservice training, retraining, or other 
training of such personnel. 
(F) A State mental health authority shall provide satisfactory 
assurances to the Secretary that it will submit a biennial report 
to the Secretary regarding its efforts and progress under this 
paragraph, including the manner in which the needs of chron-
ically mentally ill individuals in each mental health service area 
in the State are being met within the community and the State's 
progress in implementing mechanisms to ensure that, as chron-
ically mentally ill individuals are discharged from mental health 
facilities, increased State mental health funds are available for 
community-based care. 
(c) No agreement may be entered into under subsection (a) with a 
State mental health authority unless the authority has submitted an 
application to the Secretary in such form and manner as the 
Secretary shall prescribe. The Secretary shall publish a notice in the 
Federal Register identifying the States which have made an applica-
tion for an agreement under subsection (a) and, in considering an 
application, the Secretary shall provide a reasonable opportunity for 
submission of comments on the application. 
(d) The Secretary may make grants to States which have entered 
into agreements under subsection (a) for purposes of assisting the 
States in meeting the costs of carrying out the agreements. For grants 
authorized by this subsection there are authorized to be appropriated 
$3,000,000 for the fiscal year ending September 30, 1982, $4,000,000 
for the fiscal year ending September 30, 1983, and $5,000,000 for the 
fiscal year ending September 30,1984. 
PROCESSING OF APPLICATIONS BY STATE MENTAL HEALTH AUTHORITIES 
42 use 9462. 
SEC. 306. (a) Each applicant for a grant under title II (other than an 
Ante, p. 1571. 
applicant for a grant under section 207 or 208) shall submit its 
application to the State mental health authority for its State in 
accordance with such requirements as the authority may prescribe. 
Cb)(l) If a State mental health authority has entered into an 
agreement under section 305, the authority shall carry out the 
following: 
Hearing. 
(A) The authority shall consider the applications submitted to 
it in accordance with subsection (a), and, in the course of such 
consideration, shall provide the applicants and other interested 
persons with a reasonable opportunity for a hearing before the 
authority on the applications. The authority shall also provide a 
reasonable opportunity for a hearing on applications the author-
ity proposes to submit for itself to the Secretary. 
(B) The authority may modify any application submitted to it 
and may return an application to an applicant. 
(C) The authority shall (i) rank all the applications which the 
authority proposes to transmit to the Secretary in the order in 
which the authority determines the applications should be 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1591 
funded when approved by the Secretary, and (ii) in accordance 
with the agreement entered into under section 305, transmit 
such applications to the Secretary. 
If the State mental health authority modifies or returns an applica-
tion, the State mental health authority shall provide the applicant 
involved with a statement of the reasons for the modification or 
return. 
(2) If a State mental health authority has not entered into an 
agreement under section 305, the authority shall carry out the 
following: 
(A) The authority shall consider the applications submitted to Hearing, 
it in accordance with subsection (a), and, in the course of such 
consideration, shall provide the applicants and other interested 
persons with a reasonable opportunity for a hearing before the 
authority on the applications. The authority shall also provide a 
reasonable opportunity for a hearing on applications the author-
ity proposes to submit for itself to the Secretary, 
(B) For each category of grants under title II for which an ^"^^' P 1571. 
application was submitted to or proposed by the authority, the 
authority shall (i) rank all the applications for such category of 
grants in the order in which the authority determines the 
applications should be funded when approved by the Secretary, 
and (ii) in accordance with regulations issued by the Secretary, 
transmit such applications to the Secretary. 
(c)(1) An applicant may appeal to the Secretary a decision of a State 
mental health authority under subsection (b)(1) to return to the 
applicant its application or to modify its application. In reviewing the 
decision of the authority, the Secretary shall provide the authority 
and the applicant involved a reasonable opportunity for a hearing on 
the appeal of the decision of the authority. If the Secretary finds that 
the decision of the authority was arbitrary or capricious, the 
Secretary— 
(A) shall, if the decision of the authority was to return the 
application, return the application to the authority for ranking, 
and 
(B) shall, if the decision of the authority was to modify the 
application, provide the authority an opportunity to change its 
rank of the application, and the Secretary may consider the 
application without regard to the modifications. 
(2) An applicant may appeal to the Secretary a decision of a State 
mental health authority under subsection (b)(2) ranking the applica-
tion. In reviewing the decision of the authority, the Secretary shall 
provide the authority and the applicant involved a reasonable oppor-
tunity for a hearing on the appeal of the decision of the authority. If 
the Secretary finds that, on the basis of the record established in the 
hearing provided under the preceding sentence, there is substantial 
evidence that the activity proposed in the application involved would 
better carry out the purposes of the section under which it would be 
funded than other applications under that section given a higher 
rank, the Secretary may consider the application without regard to 
the rank given the application by the State mental health authority. 
(3) A decision of the Secretary under paragraph (1) or (2) is not 
subject to judicial review. 
(d) If a State mental health authority fails to carry out, in 
accordance with an agreement entered into under section 305 or with 
regulations issued by the Secretary, its responsibilities under subsec-
tion (b) with respect to applications submitted to it, the applicants 
94 STAT. 1592 
PUBLIC LAW 96-398—OCT. 7, 1980 
under such applications shall be provided an opportunity to submit 
their applications directly to the Secretary. 
42 u s e 9463. 
Ante, pp. 1585, 
1571. 
Financial plan 
and budget. 
Fee schedule. 
42 u s e 1395. 
42 u s e 1396. 
APPLICATIONS 
SEC. 307. (a) No grant may be made under this title or title II unless 
an application therefor is submitted to and approved by the Secre-
tary. The application shall be in such form, submitted in such 
manner, and contain such information, as the Secretary may require. 
Ot)) An application for a grant under section 201, 202, 203, or 204 
must, in addition to the application requirements prescribed in the 
section under which the grant is to be made, contain or be accompa-
nied by— 
(1) a financial plan and budget covering the year for which the 
grant is sought (and such additional period as the Secretary may 
require) showing the sources of funding for the project and 
allocating the funds available for the project among the various 
types of services to be provided or assisted or the various types of 
activities to be conducted or assisted and among the various 
population groups to which the project is directed; 
(2) a statement of the objectives of the project; 
(3) with respect to health services which are to be provided, 
assurances satisfactory to the Secretary that— 
(A) the applicant (i) has prepared a schedule of fees or 
payments for the provision of its services designed to cover 
its reasonable costs of operation and a corresponding sched-
ule of discounts to be applied to the payment of such fees or 
payments 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 
payment for services in accordance with such approved 
schedules, and (II) to collect reimbursement for health serv-
ices to persons described in subparagraph (B) on the basis of 
the 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 subparagraph; and 
(B) the applicant has made or will make and will continue 
to make every reasonable effort to collect appropriate reim-
bursement for its costs in providing 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; and 
(C) the applicant will adopt and enforce a policy (i) under 
which fees for the provision of mental health services 
through the applicant will be paid to the applicant, and (ii) 
which prohibits health professionals who provide such serv-
ices to patients through the applicant from providing such 
services to such patients except through the applicant. 
(4) in the case of a project which will serve a population which 
includes a substantial proportion of individuals of limited Eng-
lish-speaking ability, assurances satisfactory to the Secretary 
that the applicant has (A) developed a plan and made arrange-
ments responsive to the needs of such population for providing 
services to the extent practicable in the language and cultural 
context most appropriate to such individuals, and (B) identified 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1593 
an individual on its staff who is fluent in both that language and 
English and whose responsibilities shall include providing guid-
ance to such individuals and to appropriate staff members with 
respect to cultural sensitivity and bridging linguistic and 
cultural differences; 
(5) assurances that the applicant has in effect a system, 
satisfactory to the Secretary, to assure that an employee of the 
applicant who reports to any officer or employee of the Depart-
ment of Health and Human Services or appropriate State 
authority any failure on the part of the applicant to comply with 
an applicable requirement of this Act or regulation of the 
Secretary or requirement of State law will not on account of such 
report be discharged or discriminated against with respect to the 
employee's comjpensation or the terms, conditions, or privileges 
of the employee s employment; 
(6) satisfactory assurances that each facility to be used in the 
provision of mental health or support services to be supported by 
the grant applied for meets the requirements of applicable fire 
and safety codes imposed by State law; 
(7) information on the organization and operation of the 
applicant; 
(8) satisfactory assurances that the applicant will submit such 
reports, at such times and containing such information, as the 
Secretary may request and maintain such records as the Secre-
tary may find necessary for purposes of this Act, and afford the 
Secretary and the Comptroller General of the United States such 
access to such records and other documents as may be necessary 
for an effective audit of the project; 
(9) satisfactory assurances that funds made available under 
this Act will be used to supplement and, to the extent practical, 
increase the level of non-Federal funds that would, in the 
absence of those Federal funds, be made available for the purpose 
for which the funds under this Act are made available, and will 
in no event supplant such non-Federal funds; 
(10) satisfactory assurances that measures have been taken by 
the applicant to consult with members of the group or groups to 
be served, members of the public, and affected organizations and 
agencies during the development of the application, and to give 
reasonable opportunities to members of such groups, members of 
the public, and interested organizations and agencies to com-
ment on the application; 
(11) assurances that the applicant has made satisfactory efforts 
to coordinate the services to be provided with other mental 
health and support services in the same area; 
(12) in the case of a grant under section 201 or 202, information 
regarding the extent to which and manner in which the appli-
cant has served chronically mentally ill individuals in prior 
years (if such service has been provided) and proposes to serve 
chronically mentally ill individuals during the fiscal year for 
which the grant is sought; 
(13) statistics and other information requested by the Secre-
tary necessary to evaluate the compliance of the application with 
the requirements of this section; 
(14) satisfactory assurance that the project is consistent with 
the State mental health services program; and 
(15) such other information and material and such other 
assurances as the Secretary may prescribe. 
Noncompliance 
report, employee 
protection. 
Records and 
other 
documents, 
accessibility. 
Non-Federal 
funds, increase. 
94 STAT. 1594 
PUBLIC LAW 96-398—OCT. 7, 1980 
(c) If an entity has received a grant under section 201, 202, 203, 204, 
or 206, the entity is not eligible to apply for a grant under another of 
such sections unless it continues to provide the service it provided 
under the grant it received or the Secretary determines that the 
service is not needed. 
(d) If a grant is made for any fiscal year under section 202, 203, or 
204(a) for a project in a mental health service area, no more than one 
grant may be made for such fiscal year for a project in such mental 
health service area under any one of the other such sections. 
INDIAN TRIBES AND ORGANIZATIONS 
42 use 9464. 
SEC. 308. (a) Except as provided in this section, the requirements of 
Ante, pp. 1585, 
^j^^g ^j^jg ^j^^j ^j^jg jj gj^^ll apply with respect to any application of an 
Indian tribe, intertribal organization, or urban Indian organization 
made for a grant under title II. 
03)(1) Any Indian tribe or intertribal organization may apply 
directly to the Secretary for a grant under title II for the provision of 
mental health services if such services will be available within or will 
specifically serve— 
(A) a federally recognized Indian reservation, 
(B) any land area in Oklahoma that is held in trust by the 
United States for Indians or that is a restricted Indian-owned 
land area, 
(C) a native village in Alaska (as defined in section 3(c) of the 
43 use 1602. 
Alaska Native Claims Settlement Act), or 
(D) an Indian community the members of which are recognized 
as eligible for services under the Indian Health Care Improve-
25 use 1601 
ment Act. 
^°^- 
(2) An application of an Indian tribe or intertribal organization 
authorized by paragraph (1)— 
(A) shall also be submitted by the applicant to the Indian 
Health Service and may not be approved by the Secretary unless 
the Indian Health Service certifies that the application is consist-
ent with the Tribal Specific Health Plan of the tribe or tribes to 
be served by the grant, 
(B) shall not be subject to consideration by a State mental 
health authority, 
(C) may be made without regard to the State mental health 
services program in effect in the State in which the tribe or 
organization is located, and 
(D) may be considered, approved, and funded by the Secretary 
without regard to the mental health service area or areas in 
which the services under the grant will be provided. 
(c) If the application of any Indian tribe, intertribal organization, or 
urban Indian organization for a grant under title II requests that the 
Indian Health Service or any entity of the Service provide the mental 
health services under the grant to members of such tribe or 
organization— 
(1) the application shall not be subject to consideration by a 
State mental health authority, and 
(2) if the application is approved, payments under the grant 
shall be made to the Indian Health Service or entity of the 
Service as requested in the application. 
(d) For purposes of this section— 
"Indian tribe." 
(1) the term "Indian tribe" has the same meaning as is given 
25 use 450 
that term by the Indian Self-Determination Act, and 
note. 
"^ 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1595 
(2) the term "urban Indian organization" has the same mean- "Urban Indian 
ing as is given that term by the Indian Health Care Improvement organization. 
Act. 
PROCEDURES 
SEC. 309. In considering any application for a grant or contract 42 use 9465. 
under this title or title II, the Secretary shall provide a reasonable f^rj^^' PP ^^^^• 
opportunity for the submission of comments on the application. If the 
Secretary does not approve an application, the Secretary shall 
provide the applicant and the State mental health authority of the 
State in which the applicant is located to the Secretary with a 
statement of the reasons of the Secretary for not approving the 
application. 
PART C—PERFORMANCE 
PERFORMANCE CONTRACTS 
SEC. 315. No pa3mient may be made under any grant or contract 42 use 9471. 
made or entered into under title II or this title unless the Secretary 
has entered into a contract with the entity to which the grant has 
been made or with which the contract has been entered into specify-
ing the following with respect to the performance of the activities for 
which the grant or contract was made or entered into: 
(DA schedule for the performance of such activities. 
(2) The standards by which the performance of such activities 
by the entity will be monitored and evaluated, the incentives 
which will be provided the entity to meet such standards, and the 
role of the Secretary and of consumers and representatives of 
communities affected by such activities in such monitoring and 
evaluation. 
(3) The methods and format which will be used in collecting 
and transmitting data to the Secretary respecting the perform-
ance of such activities. 
(4) An expeditious and impartial method for the resolution of 
disputes between the entity and the Secretary respecting the 
performance of such activities. 
(5) Such other matters which the Secretary includes in the 
contract to carry out the purposes of the section under which the 
grant or contract was made or entered into. 
PERFORMANCE STANDARDS 
SEC. 316. (a) The Secretary shall prescribe standard measures of 42 use 9472. 
performance designed to test the quality and extent of performance 
by the recipients of grants and contracts under title II and this title 
and the extent to which such performance has helped to achieve the 
national or other objectives for which the grants or contracts were 
made or entered into. 
(h) In determining whether or not to approve an application for a 
grant or contract under title II or this title, the Secretary shall 
consider the performance by the applicant under any prior grant or 
contract under title II or this title as measured under subsection (a). 
EVALUATION AND MONITORING 
SEC. 317. (a) With the approval of the Secretary, any recipient of a 42 use 9473. 
grant or contract under title II or this title may use a portion of that 
grant or contract for evaluation of the project or activity involved. 
94 STAT. 1596 
PUBLIC LAW 96-398—OCT. 7, 1980 
Ante, pp. 1571, 
1585. 
(b) Not more than 1 per centum of the total amount appropriated 
under title II and this title for any fiscal year shall be used by the 
Secretary, or through contracts with State mental health authorities 
or other entities, to monitor activities of the recipients of grants and 
contracts under title II or this title to determine if the requirements 
of this Act applicable to the receipt of such grants or contracts are 
being met. 
PART D—ENFORCEMENT 
42 u s e 9481. 
Proposed 
stop-payment 
order. 
Ante, p. 1585. 
Hearing. 
ENFORCEMENT 
SEC. 321. (a) If the Secretary determines that there has been a 
substantial and persistent failure— 
(1) by a State mental health authority to implement its State 
mental health services program in accordance with the require-
ments of part A of this title, the Secretary may issue a proposed 
order to stop payments under title II and this title to any entity 
in the State, including the State mental health authority, until 
the Secretary is satisfied that such failure has been or will be 
corrected, or 
(2) by any entity in a State which is receiving funds under a 
grant or contract under title II or this title to comply with the 
requirements of this title (other than the requirements of part 
A), the Secretary may issue a proposed order to stop payments 
under such grant or contract until the Secretary is satisfied that 
such failure has been or will be corrected. 
The Secretary shall notify each entity affected by an order issued 
under this subsection of the effect of the order. 
(b) If the Secretary issues an order under subsection (a), the 
Secretary shall provide a reasonable opportunity for an informal 
hearing for the entities affected by the order. Such a hearing shall be 
held in the State in which such entities are located. If after such a 
hearing the Secretary reaffirms the determination on which the 
order was based, the Secretary may discontinue payments as speci-
fied in the proposed order or as revised by the Secretary after the 
hearing. 
PART E—MISCELLANEOUS 
42 u s e 289k-l. 
Administrative 
unit, 
designation. 
NATIONAL INSTITUTE OF MENTAL HEALTH PREVENTION UNIT 
SEC. 325. Section 455 of the Public Health Service Act is amended 
by adding at the end thereof the following new subsection: 
"(d) The Director shall designate an administrative unit in the 
Institute to— 
"(1) design national goals and establish national priorities 
for— 
"(A) the prevention of mental illness, and 
"(B) the promotion of mental health, 
"(2) encourage and assist local entities and State agencies to" 
achieve the goals and priorities described in paragraph (1), and 
"(3) develop and coordinate Federal prevention policies and 
programs and to assure increased focus on the prevention of 
mental illness and the promotion of mental health.". 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1597 
TECHNICAL ASSISTANCE 
SEC. 326. Such portion as the Secretary may determine, but not 
more than 2 percent, of the total amount appropriated under title II 
for any fiscal year is available to the Secretary to provide technical 
assistance, including short-term training, to any State mental health 
authority or other entity which is or has been a recipient of a grant 
under title II or this title to assist it in developing, or in better 
administering, the mental health services program or programs for 
which it is responsible. 
42 u s e 9491. 
Ante, p. 1571. 
INDIRECT PROVISION OF SERVICES 
SEC. 327. Except as provided in section 101(b)(2), any mental health 
service which an entity is responsible for providing in a mental 
health service area under a grant or contract under title II may be 
provided by it directly at its primary or satellite facilities or through 
arrangements with other entities or health professionals and others 
in, or serving residents of, the same mental health service area. 
42 u s e 9492. 
COOPERATIVE AGREEMENTS 
SEC. 328. In lieu of providing funds under a grant under title II or 
this title, the Secretary may provide such funds under a cooperative 
agreement, and all requirements which would apply with respect to 
such a grant shall apply to the cooperative agreement. 
42 u s e 9493. 
TITLE IV—ASSOCIATE DIRECTOR FOR MINORITY CONCERNS 
ASSOCIATE DIRECTOR FOR MINORITY CONCERNS 
SEC. 401. (a) Section 455 of the Public Health Service Act (as 
amended by section 325 of this Act) is amended by adding at the end 
thereof the following new subsection: 
"(e)(1) The Director of the National Institute of Mental Health shall 
designate an Associate Director for Minority Concerns. 
"(2) The Secretary, acting through the Associate Director for 
Minority Concerns, shall— 
"(A) develop and coordinate prevention, treatment, research, 
and administrative policies and programs to assure increiased 
emphasis on the mental health needs of minority populations. 
"(B) support programs and projects relating to the delivery of 
mental health services to minority populations, including dem-
onstration programs and projects; 
"(C) develop a plan to increase the representation of minority 
populations in mental health service delivery and manpov/er 
programs; 
"(D) support programs of basic and applied social and behav-
ioral research on the mental health problems of minority 
populations; 
"(E) study the effects of discrimination on institutions and 
individuals, including majority institutions and individuals; 
42 u s e 289k-l. 
Designation. 
Functions. 
94 STAT. 1598 
PUBLIC LAW 96-398—OCT. 7, 1980 
Effective date. 
42 u s e 289k-l 
note. 
"(F) develop systems to assist minority populations in adapting 
to, and coping with, the effects of discrimination; 
"(G) support and develop research, demonstration, and train-
ing programs designed to eliminate institutional discrimination; 
and 
"(H) provide increased emphasis on the concerns of minority 
populations in training programs, service delivery programs, and 
research endeavors of the Institute.". 
(b) The amendment made by subsection (a) shall take effect on the 
date of the enactment of this Act or October 1, 1980, whichever 
occurs later. 
TITLE V—MENTAL HEALTH RIGHTS AND ADVOCACY 
State laws, 
review and 
revision. 
42 u s e 9501. 
Appropriate 
treatment and 
related services. 
Individualized 
written 
treatment or 
service plan. 
Service 
planning, 
participation. 
BILL OF RIGHTS 
SEC. 501. It is the sense of the Congress that each State should 
review and revise, if necessary, its laws to ensure that mental health 
patients receive the protection and services they require; and in 
making such review and revision should take into account the 
recommendations of the President's Commission on Mental Health 
and the following: 
(1) A person admitted to a program or facility for the 
purpose of receiving mental health services should be 
accorded the following: 
(A) The right to appropriate treatment and related serv-
ices in a setting and under conditions that— 
(i) are the most supportive of such person's personal 
liberty; and 
(ii) restrict such liberty only to the extent necessary 
consistent with such person's treatment needs, applica-
ble requirements of law, and applicable judicial orders. 
(B) The right to an individualized, written, treatment or 
service plan (such plan to be developed promptly after 
admission of such person), the right to treatment based on 
such plan, the right to periodic review and reassessment of 
treatment and related service needs, and the right to appro-
priate revision of such plan, including any revision neces-
sary to provide a description of mental health services that 
may be needed after such person is discharged from such 
program or facility. 
(C) The right to ongoing participation, in a manner appro-
priate to such person's capabilities, in the planning of 
mental health services to be provided such person (including 
the right to participate in the development and periodic 
revision of the plan described in subparagraph (B)), and, in 
connection with such participation, the right to be provided 
with a reasonable explanation, in terms and language appro-
priate to such person's condition and ability to understand, 
o
f
— 
(i) such person's general mental condition and, if such 
program or facility has provided a physical examina-
tion, such person's general physical condition; 
(ii) the objectives of treatment; 
(iii) the nature and significant possible adverse effects 
of recommended treatments; 
(iv) the reasons why a particular treatment is consid-
ered appropriate; 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1599 
(v) the reasons why access to certain visitors may not 
be appropriate; and 
(vi) any appropriate and available alternative treat-
ments, services, and types of providers of mental health 
services. 
(D) The right not to receive a mode or course of treatment, 
established pursuant to the treatment plan, in the absence of 
such person s informed, voluntary, written consent to such 
mode or course of treatment, except treatment— 
(i) during an emergency situation if such treatment is 
pursuant to or documented contemporaneously by the 
written order of a responsible mental health profes-
sional; or 
(ii) as permitted under applicable law in the case of a 
person committed by a court to a treatment program or 
facility. 
(E) The right not to participate in experimentation in the 
absence of such person's informed, voluntary, written con-
sent, the right to appropriate protections in connection with 
such participation, including the right to a reasonable expla-
nation of the procedure to be followed, the benefits to be 
expected, the relative advantages of alternative treatments, 
and the potential discomforts and risks, and the right and 
opportunity to revoke such consent. 
(F) The right to freedom from restraint or seclusion, other 
than as a mode or course of treatment or restraint or 
seclusion during an emergency situation if such restraint or 
seclusion is pursuant to or documented contemporane-
ously by the written order of a responsible mental health 
professional. 
(G) The right to a humane treatment environment that 
affords reasonable protection from harm and appropriate 
privacy to such person with regard to personal needs. 
(H) The right to confidentiality of such person's records. 
(I) The right to access, upon request, to such person's 
mental health care records, except such person may be 
refused access to— 
(i) information in such records provided by a third 
party under assurance that such information shall 
remain confidential; and 
(ii) specific material in such records if the health 
professional responsible for the mental health services 
concerned has made a determination in writing that 
such access would be detrimental to such person's 
health, except that such material may be made availa-
ble to a similarly licensed health professional selected 
by such person and such health professional may, in the 
exercise of professional judgment, provide such person 
with access to any or all parts of such material or 
otherwise disclose the information contained in such 
material to such person. 
(J) The right, in the case of a person admitted on a 
residential or inpatient care basis, to converse with others 
privately, to have convenient and reasonable access to the 
telephone and mails, and to see visitors during regularly 
scheduled hours, except that, if a mental health professional 
treating such person determines that denial of access to a 
particular visitor is necessary for treatment purposes, such 
Experimentation, 
non-participation. 
Restraint or 
seclusion. 
Humane 
treatment. 
Records, access. 
79-194 
O—81—pt. 2 
21 : Q L 3 
94 STAT. 1600 
PUBLIC LAW 96-398—OCT. 7, 1980 
Grievance 
assertions. 
Rights 
protection 
service, 
accessibility. 
Records, 
confidentiality 
and accessibility. 
Admission, 
non-denial. 
mental health professional may, for a specific, limited, and 
reasonable period of time, deny such access if such mental 
health professional has ordered such denial in writing and 
such order has been incorporated in the treatment plan for 
such person. An order denying such access should include 
the reasons for such denial. 
(K) The right to be informed promptly at the time of 
admission and periodically thereafter, in language and 
terms appropriate to such person's condition and ability to 
understand, of the rights described in this section. 
(L) The right to assert grievances with respect to infringe-
ment of the rights described in this section, including the 
right to have such grievances considered in a fair, timely, 
and impartial grievance procedure provided for or by the 
program or facility. 
(M) Notwithstanding subparagraph (J), the right of access 
to (including the opportunities and facilities for private 
communication with) any available— 
(i) rights protection service within the program or 
facility; 
(ii) rights protection service within the State mental 
health system designed to be available to such person; 
and 
(iii) qualified advocate; 
for the purpose of receiving assistance to understand, exer-
cise, and protect the rights described in this section and in 
other provisions of law. 
(N) The right to exercise the rights described in this 
section without reprisal, including reprisal in the form of 
denial of any appropriate, available treatment. 
(O) The right to referral as appropriate to other providers 
of mental health services upon discharge. 
(2)(A) The rights described in this section should be in addition to 
and not in derogation of any other statutory or constitutional rights. 
(B) The rights to confidentiality of and access to records as provided 
in subparagraphs (H) and (I) of paragraph (1) should remain applica-
ble to records pertaining to a person after such person's discharge 
from a program or facility. 
(3)(A) No otherwise eligible person should be denied admission to a 
program or facility for mental health services as a reprisal for the 
exercise of the rights described in this section. 
(B) Nothing in this section should— 
(i) obligate an individual mental health or health professional 
to administer treatment contrary to such professional's clinical 
judgment; 
(ii) prevent any program or facility from discharging any 
person for whom the provision of appropriate treatment, consist-
ent with the clinical judgment of the mental health professional 
primarily responsible for such person's treatment, is or has 
become impossible as a result of such person's refusal to consent 
to such treatment; 
(iii) require a program or facility to admit any person who, 
while admitted on prior occasions to such program or facility, has 
repeatedly frustrated the purposes of such admissions by with-
holding consent to proposed treatment; or 
(iv) obligate a program or facility to provide treatment services 
to any person who is admitted to such program or facility solely 
for diagnostic or evaluative purposes. 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1601 
(C) In order to assist a person admitted to a program or facility in 
the exercise or protection of such person's rights, such person's 
attorney or legal representatives should have reasonable access to— 
(i) such person; 
(ii) the areas of the program or facility where such person has 
received treatment, resided, or had access; and 
(iii) pursuant to the written authorization of such person, the 
records and information pertaining to such person's diagnosis, 
treatment, and related services described in paragraph (1)(I). 
(D) Each program and facility should post a notice listing and 
describing, in language and terms appropriate to the ability of the 
persons to whom such notice is addressed to understand, the rights 
described in this section of all persons admitted to such program or 
facility. Each such notice should conform to the format and content 
for such notices, and should be posted in all appropriate locations. 
(4)(A) In the case of a person adjudicated by a court of competent 
jurisdiction as being incompetent to exercise the right to consent to 
treatment or experimentation described in subparagraph (D) or (E) of 
paragraph (1), or the right to confidentiality of or access to records 
described in subparagraph (H) or (I) of such paragraph, or to provide 
authorization as described in paragraph (3)(C)(iii), such right may be 
exercised or such authorization may be provided by the individual 
appointed by such court as such person's guardian or representative 
for the purpose of exercising such right or such authorization. 
(B) In the case of a person who lacks capacity to exercise the right to 
consent to treatment or experimentation under subparagraph (D) or 
(E) of paragraph (1), or the right to confidentiality of or access to 
records described in subparagraph (H) or (I) of such paragraph, or to 
provide authorization as described in paragraph (3)(C)(iii), because 
such person has not attained an age considered sufficiently advanced 
under State law to permit the exercise of such right or such authori-
zation to be legally binding, such right may be exercised or such 
authorization may be provided on behalf of such person by a parent 
or legal guardian of such person. 
(C) Notwithstanding subparagraphs (A) and (B), in the case of a 
person admitted to a program or facility for the purpose of receiving 
mental health services, no individual employed by or receiving any 
remuneration from such program or facility should act as such 
person's guardian or representative. 
Records and 
information, 
accessibility. 
Notice. 
Incompetent 
persons. 
Incapacitated 
persons. 
GRANTS FOR PROTECTION AND ADVOCACY PROGRAMS 
Public or 
nonprofit 
private entity, 
eligibility. 
42 u s e 9502. 
SEC. 502. (a)(1) The Secretary may make grants to any public or 
nonprofit private entity for projects to protect and advocate the 
rights of mentally ill individuals if the entity— 
(A) has the authority and ability to pursue legal, administra-
tive, and other appropriate remedies to ensure the protection of 
the rights of mentally ill individuals, and 
(B) is independent of any entity which provides treatment or 
services to mentally ill individuals. 
(2) A grant under paragraph (1) for the first fiscal year for which 
funds are appropriated under subsection (d) may be made only to an 
entity of the government of a State designated by the Governor of the 
State or a public or nonprofit private entity in a State recommended 
by the Governor of the State. A grant under paragraph (1) for a Hearing, 
succeeding fiscal year may be made to any public or nonprofit private 
entity, except that in considering an application of an entity which is 
not an entity of State government designated by the Governor or 
94 STAT. 1602 
PUBLIC LAW 96-398—OCT. 7, 1980 
Training and 
technical 
assistance. 
Appropriation 
authorization. 
which has not been recommended by the Governor of a State, the 
Secretary shall notify the Governor of the State in which such entity 
is located of the application and shall provide the Governor and other 
interested persons a reasonable opportunity for a hearing on the 
application. 
(b) The Secretary may make grants to any public or nonprofit 
private entity for the provision of training and technical assistance 
for entities carrying out projects to protect and advocate the rights of 
mentally ill individuals. 
(c) No grant may be made under subsection (a) or (b) unless an 
application therefor is submitted to and approved by the Secretary. 
The application shall be submitted in such form and manner, and 
shall contain such information, as the Secretary may prescribe. 
(d) For grants under subsections (a) and (b), there are authorized to 
be appropriated $10,000,000 for the fiscal year ending September 30, 
1982, $12,500,000 for the fiscal year ending September 30, 1983, and 
$15,000,000 for the fiscal year ending September 30, 1984. Not more 
than 10 percent and not less than 5 percent of the amount appropri-
ated under this subsection for any fiscal year shall be obligated for 
grants under subsection (b). 
TITLE VI—RAPE PREVENTION AND CONTROL 
42 u s e 9511. 
Study and 
investigation. 
Summaries, 
publication. 
Report to 
Congress. 
RAPE 
PREVENTION 
AND 
CONTROL 
SEC. 601. (a) The Secretary, acting through the National Center for 
the Prevention and Control of Rape (hereafter in this section referred 
to as the "Center"), may, directly or by grant, carry out the following: 
(1) A continuing study of rape, including a study and investiga-
tion of— 
(A) the effectiveness of existing Federal, State, and local 
laws dealing with rape; 
(B) the relationship, if any, between traditional legal and 
social attitudes toward sexual roles, the act of rape, and the 
formulation of laws dealing with rape; 
(C) the treatment of the victims of rape by law enforce-
ment agencies, hospitals or other medical institutions, pros-
ecutors, and the courts; 
(D) the causes of rape, identifying to the degree possible— 
(i) social conditions which encourage sexual attacks, 
and 
(ii) the motives of offenders, and 
(E) the impact of rape on the victim and family of the 
victim; 
(F) sexual assaults in correctional institutions; 
(G) the estimated actual incidence of forcible rape as 
compared to the reported incidence of forcible rape and the 
reasons for any difference between the two; and 
(H) the effectiveness of existing private and local and State 
government educational, counseling, and other programs 
designed to prevent and control rape. 
(2) The compilation, analysis, and publication of summaries of 
the continuing study conducted under paragraph (1) and the 
research and demonstration projects conducted under paragraph 
(5). The Secretary shall submit not later than March 30, 1983, to 
the Congress a summary of such study and projects together with 
a review of their effectiveness and recommendations where 
appropriate. 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1603 
(3) The development and maintenance of an information 
clearinghouse with regard to— 
(A) the prevention and control of rape; 
(B) the treatment and counseling of the victims of rape and 
their families; and 
(C) the rehabilitation of offenders. 
(4) The compilation and publication of training materials for 
personnel who are engaged or intend to engage in programs 
designed to prevent and control rape. 
(5) Assistance to community mental health centers and other 
qualified public and nonprofit private entities in conducting 
research and demonstration projects concerning the prevention 
and control of rape, including projects (A) for the planning, 
development, implementation, and evaluation of alternative 
methods used in the prevention and control of rape, the treat-
ment and counseling of the victims of rape and their families, 
and the rehabilitation of offenders; (B) for the application of such 
alternative methods; and (C) for the promotion of community 
awareness of the specific locations in which, and the specific 
social and other conditions under which sexual attacks are most 
likely to occur. 
(6) Assistance to community mental health centers in meeting 
the costs of providing consultation and education services 
respecting rape. 
O
b
) The Secretary shall appoint an advisory committee to advise, 
consult with, and make recommendations to the Secretary on the 
implementation of subsection (a). The recommendations of the com-
mittee shall be submitted directly to the Secretary without review or 
revision by any person without the consent of the committee. The 
Secretary shall appoint to such committee persons who are particu-
larly qualified to assist in carrying out the functions of the commit-
tee. A majority of the members of the committee shall be women. 
Members of the advisory committee shall receive compensation at 
rates, not to exceed the daily equivalent of the annual rate in effect 
for grade GS-18 of the General Schedule, for each day (including 
traveltime) they are engaged in the performance of their duties as 
members of the advisory committee and, while so serving away from 
their homes or regular places of business, each member shall be 
allowed travel expenses, including per diem in lieu of subsistence, in 
the same manner as authorized by section 5703 of title 5, United 
States 
Code, for 
persons 
in 
Government 
service 
employed 
intermittently. 
(c) No grant may be made under subsection (a) unless an applica-
tion therefor is submitted to and approved by the Secretary. The 
application shall be submitted in such form and manner and contain 
such information as the Secretary may prescribe. 
(d) For the purpose of carrying out subsection (a), there are 
authorized to be appropriated $6,000,000 for the fiscal year ending 
September 30, 1981, $1,500,000 for the fiscal year ending September 
30, 1982, $1,500,000 for the fiscal year ending September 30, 1983. 
(e) For purposes of subsection (a), the term "rape" includes statu-
tory and attempted rape and any other criminal sexual assault 
(whether homosexual or heterosexual) which involves force or the 
threat offeree. 
(f) Part D of the Community Mental Health Centers Act is repealed. 
Information 
clearinghouse. 
Training 
materials. 
Costs, assistance. 
Advisory 
committee, 
appointment. 
Membership. 
Compensation. 
5 u s e 5332 note. 
Appropriation 
authorization. 
"Rape." 
Repeal. 
42 u s e 2689q. 
94 STAT. 1604 
PUBLIC LAW 96-398—OCT. 7, 1980 
42 u s e 9512. 
Amount, 
limitation. 
Grant review 
panel, 
establishment. 
Appropriation 
authorization. 
Funding limits. 
Information 
disclosure. 
GRANTS FOR SERVICES FOR RAPE VICTIMS 
SEC. 602. (a) The Secretary may make grants to any public or 
nonprofit private entity to assist in meeting the cost of— 
(1) providing counseling and foUowup counseling for rape 
victims and the immediate family of rape victims; 
(2) providing assistance in securing mental health, social, 
medical, and legal services for rape victims; and 
(3) demonstration projects to develop and implement methods 
of preventing rape and assisting rape victims. 
G))(l) No grant may be made under subsection (a) unless an 
application therefor is submitted to and approved by the Secretary. 
The application shall be submitted in such form and manner and 
contain such assurances as the Secretary may require that the 
applicant will comply with the requirements of subsection (e) and 
such other information as the Secretary may prescribe. 
(2) The amount of any grant under this section shall be determined 
by the Secretary, except that the amount may not exceed 90 per 
centum of the cost of the project (as determined by the Secretary) 
with respect to which the grant is made. 
(c)(1) In carrying out this section, the Secretary shall coordinate 
with other activities related to rape carried out by the Secretary and 
the heads of other Federal departments and agencies. 
(2) The Secretary shall establish a grant review panel to make 
recommendations to the Secretary with respect to the approval of 
applications for grants under subsection (a). The Secretary shall 
appoint individufids to the panel who are or have been engaged in the 
provision of services to rape victims. 
(d)(1) There are authorized to be appropriated for grants under 
subsection (a) $6,000,000 for the fiscal year ending September 30, 
1981, $9,000,000 for the fiscal year ending September 30, 1982, 
$12,000,000 for the fiscal year ending September 30, 1983, and 
$12,000,000 for the fiscal year ending September 30,1984. 
(2) The Secretary may in a fiscal year obligate not more than 7.5 
percent of the funds appropriated for that fiscal year under para-
graph (1) to provide, upon request, technical assistance in the devel-
opment and submission of applications for a grant under subsection 
(a). Such assistance shall be provided only to those entities which the 
Secretary determines do not possess the resources or expertise 
necessary to develop and submit such an application. 
(e) No officer or employee of the Federal Government or of any 
recipient of a grant under subsection (a) may use or disclose any 
personally identifiable information obtained, in carr3dng out an 
activity assisted by such grant, by the recipient (or an officer or 
employee of the recipient) from a rape victim or a rape victim's 
immediate family unless such use or disclosure is necessary to carry 
out the activity or is made with the consent of the person who 
supplied the information. Such information shall be immune from 
legal process and may not, without the consent of the person 
furnishing the information, be admitted as evidence or otherwise 
used in any civil or criminal action or other judicial or administrative 
proceeding. 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1605 
TITLE Vn-EXTENSION OF COMMUNITY MENTAL HEALTH 
CENTERS ACT 
ONE-YEAR EXTENSION OP COMMUNITY MENTAL HEALTH CENTERS ACT 
SEC. 701. (a) Subsection (d) of section 202 of the Community Mental 
Health Centers Act (42 U.S.C. 2689a(d)) (relating to grants for 
planning) is amended by striking out "for the fiscal year ending 
September 30,1980" and inserting in lieu thereof "each for the fiscal 
year ending September 30,1980, and the next fiscal year". 
(b) Subsection (d) of section 203 of such Act (relating to grants for 
initial operation) is amended— 
(1) in paragraph (1), by (A) striking out "and" after "1979,", and 
(B) inserting before the period a comma and the following: "and 
$37,000,000 for the fiscal year ending September 30, 1981"; and 
(2) effective October 1, 1981, by striking out "(1)" and para-
graph (2). 
(c) Subsection (c) of section 204 of such Act (42 U.S.C. 2689c(c)) 
(relating to grants for consultation and education services) is 
amended (1) by striking out "and" after "1979,", and (2) by inserting 
before the period a comma and the following: "and $15,000,000 for the 
fiscal year ending September 30,1981". 
(d)(1) Section 213 of such Act (42 U.S.C. 2689h) (relating to financial 
distress grants) is amended (1) by striking out "and" after "1978,", 
and (B) by inserting after "1979," the following: "and $20,000,000 for 
the 
fiscal 
year ending September 30,1981,". 
(2) Section 212(c) of such Act (42 U.S.C. 2689g(c)) of such Act is 
amended by striking out "five" and inserting in lieu thereof "six". 
(e) Section 206(e)(2)(B) of such Act (42 U.S.C. 2689e(e)(2)(B)) is 
amended by striking out "the fiscal year ending September 30,1979, 
and during the fiscal year ending September 30,1980" and inserting 
in lieu thereof "the fiscal years ending September 30,1979, Septem-
ber 30,1980, and September 30,1981". 
TITLE VIII—MISCELLANEOUS 
42 u s e 2689b. 
EMPLOYEE PROTECTION 
SEC. 801. (a)(1) Each State mental health authority shall have in 42 use 9521. 
effect equitable arrangements to protect the interests of employees 
affected adversely by actions taken by the State mental health 
authority to emphasize outpatient mental health services. Such 
arrangements shall include arrangements designed to preserve 
employee rights and benefits and to provide training and retraining 
of employees, where necessary, for work in mental health or other 
fields and arrangements under which maximum effort will be made 
to place employees in employment. The arrangements required by 
this paragraph shall be established by a State mental health author-
ity in accordance with regulations issued by the Secretary with the 
concurrence of the Secretary of Labor. 
(2) The Secretary shall issue the regulations referred to in para- Regulations, 
graph (1) not later than six months after the date of the enactment of 
this Act. 
(b) Whenever the Secretary, after reasonable notice and opportu- Noncompliance, 
nity for a hearing to the State mental health authority involved, finds 
(after consultation with the Secretary of Labor) that there is a failure 
to comply substantially with the requirements of subsection (a), the 
Secretary may, until the Secretary is satisfied that there will no 
94 STAT. 1606 
PUBLIC LAW 96-398—OCT. 7, 1980 
Report to 
congressional 
committees. 
Contents. 
Ante, p. 1583. 
longer be any such failure, discontinue payments to the State mental 
health authority under sections 107 and 305. 
(c) Not later than March 1,1983, and March 1,1984, the Secretary 
of Health and Human Services shall submit to the Committee on 
Labor and Human Resources of the Senate and the Committee on 
Interstate and Foreign Commerce of the House of Representatives a 
report on actions taken under subsection (a). The report shall include 
the comments of the Secretary of Labor on such actions and shall 
include— 
(1) a statement of the number, by State, of public inpatient 
mental health facilities which have been closed or partially 
closed since the date of the enactment of this Act, 
(2) a statement of the number, by State, of public employees 
who were adversely affected by such closings, 
(3) a summary, by State, of the arrangements made under 
subsection (a) for such employees and the cost of carrying out 
such arrangements, 
(4) a description of agency procedures, resources, and person-
nel used to implement subsections (a) and O
t
>
)
, and 
(5) a description of the training and retraining projects funded 
under section 207. 
Report to 
congressional 
committees. 
42 u s e 9522. 
Contents. 
REPORT ON SHELTER AND BASIC UVING NEEDS OP CHRONICALLY 
MENTALLY ILL INDIVIDUALS 
SEC. 802. (a) The Secretary of Health and Human Services and the 
Secretary of Housing and Urban Development shall jointly submit a 
report to the Committees on Labor and Human Resources and 
Banking, Housing, and Urban Affairs of the Senate, and the Commit-
tees on Interstate and Foreign Commerce and Banking, Finance, and 
Urban Affairs of the House of Representatives, relating to Federal 
efforts to respond to the shelter and basic living needs of chronically 
mentally ill individuals. 
(b) The report required by subsection (a) shall include— 
(1) an analysis of the extent to which chronically mentally ill 
individuals remain inappropriately housed in institutional facili-
ties or have otherwise inadequate or inappropriate housing 
arrangements; 
(2) an analysis of available permanent noninstitutional hous-
ing arrangements for the chronically mentally ill; 
(3) an evaluation of ongoing permanent and demonstration 
programs, funded in whole or in part by Federal funds, which are 
designed to provide noninstitutional shelter and basic living 
services for the chronically mentally ill, including— 
(A) a description of each program; 
(B) the total number of individuals estimated to be eligible 
to participate in each program, the number of individuals 
served by each program, and an estimate of the total 
population each program expects to serve; and 
(C) an assessment of the effectiveness of each program in 
the provision of shelter and basic living services; 
(4) recommendations of measures to encourage States to 
coordinate and link the provisions in State health plans which 
relate to mental health and, in particular, the shelter and basic 
living needs of chronically mentally ill individuals, with local 
and State housing plans; 
(5) recommendations for Federal legislation relating to the 
provision of permanent residential noninstitutional housing 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1607 
arrangements and basic living services for chronically mentally 
ill individuals, including an estimate of the cost of such recom-
mendations; and 
(6) any other recommendations for Federal initiatives which, 
in the judgment of the Secretary of Health and Human Services 
and the Secretary of Housing and Urban Development, will lead 
to improved shelter and basic living services for chronically 
mentally ill individuals, 
(c) The report required by subsection (a) shall be submitted to the 
committees referred to in subsection (a) no later than January 1, 
1981. 
OBLIGATED SERVICE FOR MENTAL HEALTH TRAINEESHIPS 
SEC. 803. (a) Section 303 of the Public Health Service Act is 42 use 242a. 
amended by adding at the end thereof the following new subsection: 
"(d)(1) Any individual who has received a clinical traineeship, in 
psychology, psychiatry, nursing, or social work, under subsection 
(a)(1) that was not of a limited duration or experimental nature (as 
determined by the Secretary) is obligated to serve, in service deter-
mined by the Secretary to be appropriate in the light of the individ-
ual's training and experience, at the rate of one year for each year (or 
academic year, whichever the Secretary determines to be appropri-
ate) of the traineeship. 
"(2) The service required under paragraph (1) shall be performed— 
"(A) for a public inpatient mental institution providing inpa-
tient care or any entity receiving a grant under the Mental 
Health Systems Act, 
Ante, p. 1564. 
"(B) in a health manpower shortage area (as determined under 
subpart II of part D of this title), or 
42 use 254d. 
"(C) in any other area or for any other entity designated by the 
Secretary, 
and shall begin within such period after the termination of the 
traineeship as the Secretary may determine. In developing criteria 
for determining for which institutions or entities or in which areas, 
referred to in the preceding sentence, individuals must perform 
service under paragraph (1), the Secretary shall give preference to 
institutions, entities, or areas which in his judgment have the 
greatest need for personnel to perform that service. The Secretary 
may permit service for or in other institutions, entities, or areas if the 
Secretary determines that the request for such service is supported 
by good cause. 
"(3) Any individual who fails to perform the service required under Repayment to 
this subsection within the period prescribed by the Secretary is ^ ^ 
obligated to repay to the United States an amount equal to three 
times the cost of the traineeship (including stipends and allowances) 
plus interest at the maximum legal rate at the time of payment of the 
traineeship, multiplied, in any case in which the service so required 
has been performed in part, by the percentage which the length of the 
service not so performed is of the length of the service so required to 
be performed. 
"(4)(A) In the case of any individual any part of whose obligation to 
perform service under this subsection exists at the same time as any 
part of the individual's obligation to perform service under section 
752 or 753 (because of receipt of a scholarship under subpart IV of 42 use 294u, 
part C of title VII) or the individual's obligation to perform service ^ot^sr 2q4t 
under section 472 (because of receipt of a National Research Service 42 use 289Z-1 
94 STAT. 1608 
PUBLIC LAW 96-398—OCT. 7, 1980 
Award), or both, the same service may not be used to any extent to 
meet more than one of those obligations. 
"(B) In any case to which subparagraph (A) is applicable and in 
which one of the obligations is to perform service under section 752 or 
42 use 294u, 
753^ the obligation to perform service under that section must be met 
^^^^ 
Ot)y performance of the required service or payment of damages) 
before the obligation to perform service under this subsection or 
42 use 289M. 
under section 472. 
"(C) In any case to which subparagraph (A) is applicable, if any part 
of the obligation to perform service under section 472 exists at the 
semae time as any part of the obligation to perform service under this 
subsection, the manner and time of meeting each obligation shall be 
prescribed by the Secretary. 
"(5) In disseminating application forms to individuals desiring 
traineeships, the Secretary shall include with such forms a fair 
summary of the liabilities under this subsection of an individual who 
receives a traineeship.". 
42 use 242a 
(b) The amendment made by subsection (a) applies in the case of 
^'^^^- 
any academic year (of any traineeship awarded under section 
4
2 use 242a. 
303(aXl) of the Public Health Service Act) beginning after the date of 
the enactment of 
this Act if the award for such academic year is made 
after such date. 
CONFORMING AMENDMENTS 
SEC. 804. (a) The second sentence of section 455(a) of the Public 
Health Service Act (42 U.S.C. 289k-l(a)) (relating to the National 
Institute of Mental Health) is amended— 
(1) by striking out "and" after "sections 301 and 303 of this 
Act" and inserting in lieu thereof a comma; and 
Ante, p. 1564. 
(2) by inserting ", and the Mental Health Systems Act" after 
"Mental Retardation Facilities and Community Mental Health 
4
2 use 6001. 
Centers Construction Act of 1963 (other than part C of title ID". 
"°^^ 
(b) Section 507 of the Public Health Service Act (42 U.S.C. 225a) 
(relating to grants to Federal institutions) is amended— 
(1) by striking out "and" after "drug dependence,"; and 
(2) by inserting ", and appropriations under title VI of the 
Ante, p. 1602. 
Mental Health Systems Act before "shall also be available". 
(c) Section 513 of the Public Health Service Act (42 U.S.C. 229b) 
(relating to evaluation of programs) is amended by inserting "the 
Mental Health Systems Act, after "Community Mental Health 
42 use 2689 
Centers Act,". 
"°*^ 
(d) Section 1513(e)(l)(A)(i) of the Public Health Service Act (42 
42 use 300Z-2. 
U.S.C. 3001-2(e)(lXA)) (relating to functions of health systems agen-
cies) is amended by inserting "the Mental Health Systems Act," after 
"Community Mental Health Centers Act,". 
SPECIAL PAY FOR PUBUC HEALTH SERVICE PHYSICIANS AND DENTISTS 
SEC. 805. Section 208(a) of the Public Health Service Act (42 U.S.C. 
210(a)) is amended (1) by inserting "(1)" after "(a)", and (2) by adding 
at the end the following: 
"(2) Commissioned medical and dental officers in the Regular and 
Reserve Corps shall while on active duty be paid special pay in the 
same amounts as, and under the same terms and conditions which 
apply to, the special pay now or hereafter paid to commissioned 
medical and dental officers of the Armed Forces under chapter 5 of 
3
7 use 301. 
title 37, United States Code.". 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1609 
CONTRACT AUTHORITY 
SEC. 806. The authority of the Secretary to enter into contracts 42 use 9523. 
under this Act shall be effective for any fiscal year only to such extent 
or in such amounts as are provided in advance by appropriation Acts. 
TITLE IX—MECHANIZED CLAIMS PROCESSING AND 
INFORMATION RETRIEVAL SYSTEMS 
MECHANIZED CLAIMS PROCESSING AND INFORMATION RETRIEVAL 
SYSTEMS 
SEC. 901. Section 1903 of the Social Security Act is amended by 42 use I396b. 
adding at the end thereof the following new subsection: 
"(r)(l)(A) In order to receive payments under paragraphs (2) and (7) 
of subsection (a) without being subject to per centum reductions set 
forth in subparagraph (C) of this paragraph, a State must provide 
that mechanized claims processing and information retrieval systems 
of the type described in subsection (a)(3)(B) and detailed in an advance 
planning document approved by the Secretary are operational on or 
before the deadline established under subparagraph (B). 
"(B) The deadline for operation of such systems for a State is the 
earlier of (i) September 30,1982, or (ii) the last day of the sixth month 
following the date specified for operation of such systems in the 
State's most recently approved advance planning document submit-
ted before the date of the enactment of this subsection. 
"(C) If a State fails to meet the deadline established under subpara-
graph (B), the per centums specified in paragraphs (2) and (7) of 
subsection (a) with respect to that State shall each be reduced by 5 
percentage points for the first two quarters beginning on or after 
such deadline, and shall be further reduced by an additional 5 
percentage points after each period consisting of two quarters during 
which the Secretary determines the State fails to meet the require-
ments of subparagraph (A); except that— 
"(i) neither such per centum may be reduced by more than 25 
percentage points by reason of this paragraph; and 
"(ii) no reduction shall be made under this paragraph for any 
quarter following the quarter during which such State meets the 
requirements of subparagraph (A). 
"(2)(A) In order to receive payments under paragraphs (2) and (7) of 
subsection (a) without being subject to the per centum reductions set 
forth in subparagraph (C) of this paragraph, a State must have its 
mechanized claims processing and information retrieval systems, of 
the type required to be operational under paragraph (1), initially 
approved by the Secretary in accordance with paragraph (5)(A) on or 
before the deadline established under subparagraph (B). 
"(B) The deadline for approval of such systems for a State is the last 
day of the fourth quarter that begins after the date on which the 
Secretary determines that such systems became operational as 
required under paragraph (1). 
' (C) If a State fails to meet the deadline established under subpara-
graph (B), the per centums specified in paragraphs (2) and (7) of 
subsection (a) with respect to that State shall each be reduced by 5 
percentage points for the first two quarters beginning after such 
deadline, and shall be further reduced by an additional 5 percentage 
points at the end of each period consisting of two quarters during 
which the State fails to meet the requirements of subparagraph (A); 
except that— 
94 STAT. 1610 
PUBLIC LAW 96-398—OCT. 7, 1980 
Per centum 
reductions. 
Approved 
systems, review. 
Waiver. 
"(i) neither such per centum may be reduced by more than 25 
percentage points by reason of this paragraph, and 
"(ii) no reduction shall be made under this paragraph for any 
quarter following the quarter during which such State's systems 
are approved by the Secretary as provided in subparagraph (A). 
"(D) Any State's systems which are approved by the Secretary for 
purposes of subsection (a)(3)(B) on or before the date of the enactment 
of this subsection shall be deemed to be initially approved for 
purposes of this subsection. 
"(3)(A) When a State's systems are initially approved, the 75 per 
centum Federal matching provided in subsection (a)(3)(B) shall 
become effective with respect to such systems, retroactive to the first 
quarter beginning after the date on which such systems became 
operational as required under paragraph (1), except as provided in 
subparagraph (B). 
"(B) In the case of any State which was subject to a per centum 
reduction under paragraph (2), the per centum specified in subsection 
(a)(3)(B) shall be reduced by 5 percentage points for the first two 
quarters beginning after the deadline established under paragraph 
(2)(B), and shall be further reduced by an additional 5 percentage 
points at the end of each period consisting of two quarters beginning 
after such deadline and before the date on which such systems are 
initially approved, except that no reduction shall be made under this 
paragraph for any quarter following the quarter during which the 
State's systems are initially approved by the Secretary. 
"(4)(A) The Secretary shall review all approved systems not less 
often than once each fiscal year, and shall reapprove or disapprove 
any such systems. Systems which fail to meet the current perform-
ance standards, system requirements, and any other conditions for 
approval developed by the Secretary under paragraph (6) shall be 
disapproved. Any State having systems which are so disapproved 
shall be subject to a per centum reduction under subparagraph (B). 
The Secretary shall make the determination of reapproval or disap-
proval and so notify the States not later than the end of the first 
quarter following the review period. 
"(B) If the Secretary disapproves a State's systems under subpara-
graph (A), the Secretary shall, with respect to such State for quarters 
beginning after the determination of disapproval and before the first 
quarter beginning after such systems are reapproved, reduce the per 
centum specified in subsection (a)(3)(B) to a per centum of not less 
than 50 per centum and not more than 70 per centum as the 
Secretary determines to be appropriate and commensurate with the 
nature of noncompliance by such State; except that such per centum 
may not be reduced by more than 10 percentage points in any 
4-quarter period by reason of this subparagraph. No State shall be 
subject to a per centum reduction under this paragraph (i) before the 
fifth quarter beginning after such State's systems were initially 
approved, or (ii) on the basis of a review conducted before October 1, 
1981. 
"(C) The Secretary may retroactively waive a per centum reduction 
imposed under subparagraph (B), if the Secretary determines that the 
State's systems meet all current performance standards and other 
requirements for reapproval and that such action would improve the 
administration of the State's plan under this title, except that no 
such waiver may extend beyond the four quarters immediately prior 
to the quarter in which the State's systems are reapproved. 
"(5)(A) In order to be initially approved by the Secretary, mecha-
nized claims processing and information retrieval systems must be of 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1611 
the type described in subsection (a)(3)(B) and must meet the following 
requirements: 
"(i) The systems must be capable of developing provider, 
physician, and patient profiles which are sufficient to provide 
specific information as to the use of covered types of services and 
items, including prescribed drugs. 
"(ii) The State must provide that information on probable 
fraud or abuse which is obtained from, or developed by, the 
systems, is made available to the State's medicaid fraud control 
unit (if any) certified under subsection (q) of this section. 
"(iii) The systems must meet all performance standards and 
other requirements for initial approval developed by the Secre-
tary under paragraph (6). 
"(B) In order to be reapproved by the Secretary, mechanized claims 
processing and information retrieval systems must meet the require-
ments of subparagraphs (A)(i) and (A)(ii) and performance standards 
and other requirements for reapproval developed by the Secretary 
under paragraph (6). 
"(6) The Secretary, with respect to State systems, shall— 
"(A) develop performance standards, system requirements, 
and other conditions for approval for use in initially approving 
such State systems, and shall further develop written approval 
procedures for conducting reviews for initial approval, including 
specific criteria for assessing systems in operation to insure that 
all such performance standards and other requirements are met; 
"(B) by not later than October 1,1980, develop an initial set of 
performance standards, system requirements, and other condi-
tions for reapproval for use in reapproving or disapproving State 
systems, and shall further develop written reapproval proce-
dures for conducting reviews for reapproval, including specific 
criteria for reassessing systems operations over a period of at 
least six months during each fiscal year to insure that all such 
performance standards and other requirements are met on a 
continuous basis; 
"(C) provide that reviews for reapproval, conducted before 
October 1, 1981, shall be for the purpose of developing a systems 
performance data base and assisting States to improve their 
systems, and that no per centum reduction shall be made under 
paragraph (4) on the basis of such a review; 
"(D) insure that review procedures, performance standards, 
and other requirements developed under subparagraph (B) are 
sufficiently flexible to allow for differing administrative needs 
among the States, and that such procedures, standards, and 
requirements are of a nature which will permit their use by the 
States for self-evaluation; 
"(E) notify all States of proposed procedures, standards, and 
other requirements at least one quarter prior to the fiscal year in 
which such procedures, standards, and other requirements will 
be used for conducting reviews for reapproval; 
"(F) periodically update the systems performance standards, 
system requirements, review criteria, objectives, regulations, 
and guides as the Secretary shall from time to time deem 
appropriate; 
"(G) provide technical assistance to States in the development 
and improvement of the systems so as to continually improve the 
capacity of such systems to effectively detect cases of fraud or 
abuse; 
Functions. 
Performance 
standards, 
development. 
Systems 
performance 
data base, 
development. 
Technical 
assistance to 
States. 
94 STAT. 1612 
PUBLIC LAW 96-398—OCT. 7, 1980 
42 u s e 1395. 
Ckxiing system, 
development. 
Liaison between 
States, carriers 
and intermed-
iaries. 
Reasonable 
costs, 
definitions. 
Report to 
Congress. 
Waiver. 
Timetable. 
Report to 
Congress. 
"(H) for the purpose of insuring compatibility between the 
State systems and the systems utilized in the administration of 
title XVIII— 
"(i) develop a uniform identification coding system (to the 
extent feasible) for providers, other persons receiving pay-
ments under the State plans (approved under this title) or 
under title XVIII, and beneficiaries of medical services 
under such plans or title; 
"(ii) provide liaison between States and carriers and inter-
mediaries having agreements under title XVIII to facilitate 
timely exchange of appropriate data; and 
"(iii) improve the exchange of data between the States and 
the Secretary with respect to providers and other persons 
who have been terminated, suspended, or otherwise sanc-
tioned under a State plan (approved under this title) or 
under title XVIII; 
"(I) develop and disseminate clear definitions of those types of 
reasonable costs relating to State systems which are reimburs-
able under the provisions of subsection (a)(3) of this section; and 
"(J) report on or before October 1,1981, to the Congress on the 
extent to which States have developed and operated effective 
mechanized 
claims processing and 
information 
retrieval 
systems. 
"(7)(A) The Secretary shall waive the provisions of this subsection 
with respect to initial operation and approval of mechanized claims 
processing and information retrieval systems with respect to any 
State which— 
"(i) had a 1976 population (as reported by the Bureau of the 
Census) of less than 1,000,000 and which made total expenditures 
(including Federal reimbursement) for which Federal financial 
participation is authorized under this title of less than 
$100,000,000 in fiscal year 1976 (as reported by such State for 
such year), or 
"(ii) is a Commonwealth, or territory or possession, of the 
United States, 
if such State reasonably demonstrates, and the Secretary does not 
formally disagree, that the application of such provisions would not 
significantly improve the efficiency of the administration of such 
State's plan under this title. 
"(B) If the Secretary determines that the application of the provi-
sions described in subparagraph (A) to a State would significantly 
improve the efficiency of the administration of the State's plan under 
this title, the Secretary may withdraw the State's waiver under 
subparagraph (A) and, in such case, the Secretary shall impose a 
timetable for such State with respect to compliance with the provi-
sions of this subsection and the imposition of per centum reductions. 
Such timetable shall be comparable to the timetable established 
under this subsection as to the amount of time allowed such State to 
comply and the timing of per centum reductions. 
"(8)(A) The per centum reductions provided for under this subsec-
tion shall not apply to a State for any quarter with respect to which 
the Secretary determines that such State is unable to comply with 
the relevant requirements of this subsection— 
"(i) for good cause (but such a waiver may not be for a period in 
excess of 2 quarters), or 
"(ii) due to circumstances beyond the control of such State. 
"(B) If the Secretary determines under subparagraph (A) that such 
a reduction will not apply to a State, the Secretary shall report to the 
PUBLIC LAW 96-398—OCT. 7, 1980 
94 STAT. 1613 
Congress on ^ e basis for each such determination and on the 
modification of all time limitations and deadlines as described in 
subparagraph C
O
* 
*\0 For purposes of 
determining all time limitations and deadlines Time limitations 
imposed under this subsection, any time period during which a State ^odificatiSf 
^
' 
was found under subparagraph (AXii) to be unable to comply with 
reqtiirements of this subsection due to circumstances beyond its 
control shall not be taken into account, and the Secret£ury shall 
modify all such time limitations and deadlines with respect to such 
State accordingly.". 
Approved October 7, 1980. 
LEGISLATIVE HISTORY: 
HOUSE REPORTS: No. 96-977 accompanying H.R. 7299 (Comm. on Interstate and 
Foreign Commerce) and No. 96-1367 (Comm. of Conference). 
SENATE REPORTS: No. 96-712 (Comm. on Labor and Human Resources) and No. 
96-980 (Comm. of Conference). 
CONGRESSIONAL RECORD, Vol. 126 (1980): 
July 24, considered and passed Senate. 
Aug. 22, H.R. 7299 considered and passed House; passage vacated and S. 1177, 
amended, passed in lieu. 
Sept. 24, Senate agreed to conference report. 
Sept. 30, House agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 16, No. 41: 
Oct. 7, Presidential statement.