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existing facilities, for which aid under this part is available, are in need of modernization; and

"(e) that the State plan shall provide for adequate hospitals, and other facilities for which aid under this

part is available, for all persons residing in the State, and adequate hospitals (and such other facilities) to furnish needed services for persons unable to pay therefor.

Such regulations may also require that before approval

of an application for a project is recommended by a State agency to the Surgeon General for approval under

this part, assurance shall be received by the State from the applicant that (1) the facility or portion thereof to be constructed or modernized will be made available

to all persons residing in the territorial area of the appli

cant; and (2) there will be made available in the facility or portion thereof to be constructed or modernized a reasonable volume of services to persons unable to pay therefor, but an exception shall be made if such a requirement is not feasible from a financial viewpoint.

"STATE PLANS

"SEC. 604. (a) Any State desiring to participate in this 22 part may submit a State plan. Such plan must

2 2 2

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"(1) designate a single State agency as the sole

agency for the administration of the plan, or designate

15

such agency as the sole agency for supervising the ad

ministration of the plan;

66

(2) contain satisfactory evidence that the State

agency designated in accordance with paragraph (1)

will have authority to carry out such plan in conformity with this part;

"(3) provide for the designation of a State advisory council which shall include representatives of nongovernmental organizations or groups, and of public agencies, concerned with the operation, construction, or utilization of hospital or other facilities for diagnosis, prevention, or treatment of illness or disease, or for provision of rehabilitation services, and an equal number of representatives of consumers familiar with the need for the services provided by such facilities, to consult with the State agency in carrying out the plan, and provide, if such council does not include any representatives of nongovernmental organizations or groups, or State agencies, concerned with rehabilitation, for consultation with organizations, groups, and State agencies so concerned;

"(4) set forth, in accordance with criteria established in regulations prescribed under section 603 and

on the basis of a statewide inventory of existing facili

16

ties, a survey of need, and (except to the extent provided by or pursuant to such regulations) community,

area, or regional plans

"(A) the number of general hospital beds and long-term care beds, and the number and types of hospital facilities and facilities for long-term care, needed to provide adequate facilities for inpatient

care of people residing in the State, and a plan for

the distribution of such beds and facilities in service

areas throughout the State:

(B) the public health centers needed to provide adequate public health services for people residing in the State, and a plan for the distribution of such centers throughout the State;

"(C) the diagnostic or treatment centers needed to provide adequate diagnostic or treatment services to ambulatory patients residing in the

State, and a plan for distribution of such centers throughout the State;

"(D) the rehabilitation facilities needed to assure adequate rehabilitation services for disabled

persons residing in the State, and a plan for distribution of such facilities throughout the State; and

"(E) effective January 1, 1966, the extent

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to which existing facilities referred to in section

601 (a) or (b) in the State are in need of modernization;

"(5) set forth a construction and modernization program conforming to the provisions set forth pursuant to paragraph (4) and regulations prescribed under section 603 and providing for construction or modernization of the hospital or long-term care facilities, public health centers, diagnostic or treatment centers, and rehabilitation facilities which are needed, as determined under the provisions so set forth pursuant to paragraph (4);

"(6) set forth, with respect to each of such types of medical facilities, the relative need, determined in accordance with regulations prescribed under section 603, for projects for facilities of that type, and provide for the construction or modernization, insofar as financial resources available therefor and for maintenance and operation make possible, in the order of such relative

need;

"(7) provide minimum standards (to be fixed in the discretion of the State) for the maintenance and op

eration of facilities providing inpatient care which receive

aid under this part and, effective July 1, 1966, provide

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1 for enforcement of such standards with respect to proj

ects approved by the Surgeon General under this part

after June 30, 1964;

"(8) provide such methods of administration of the

State plan, including methods relating to the establish

ment and maintenance of personnel standards on a merit basis (except that the Surgeon General shall exercise no authority with respect to the selection, tenure of office, or compensation of any individual employed in accordance with such methods), as are found by the Surgeon General to be necessary for the proper and efficient operation of the plan;

"(9) provide for affording to every applicant for a construction or modernization project an opportunity for a hearing before the State agency;

"(10) provide that the State agency will make such reports, in such form and containing such information, as the Surgeon General may from time to time reasonably

require, and will keep such records and afford such

access thereto as the Surgeon General may find neces

sary to assure the correctness and verification of such

reports;

"(11) provide that the Comptroller General of the