When referring to nonresidents, we mean persons who have been in the Virgin Islands for 2 months or less. The number of such visitors during the fiscal year ending June 30, 1962, totaled nearly 291,000. In 1960, the Census Bureau placed the total resident population of the three islands at 32,099. The 1963 estimate is 35,540 which roughly amounts to 157.5 general hospital beds in the Virgin in the Virgin Islands, including St. Croix which is 40 miles by sea from St. Thomas. Under existing law, the funds for the construction of hospitals and related facilities, diagnostic or treatment centers, chronic disease hospitals, nursing homes, and rehabilitation facilities allotted throughout the United States for fiscal year 1963 totaled $170 million. The share for the Virgin Islands was $65,105. At present, it appears that all of the Virgin Islands' share for fiscal year 1963 will revert to the Treasury. In fiscal year 1962, the Virgin Islands received $77,915 and all of this money reverted to the Treasury at the end of 2 fiscal years. Existing law, and this bill, do not permit flexibility in these areas to take into consideration the large nonresident tourist population. In many cases the amount of Federal grants are too small to be of any practical use. This is especially true where new construction is involved. Because of this, the provisions of this bill relating to the availability of allotments for a total of 3 fiscal years in addition to the sums allotted for two of those fiscal years will be extremely helpful, as will the minimum allotments. The Bureau of the Budget has advised that there is no objection to the presentation of this report from the standpoint of the administrations' program. Sincerely yours, Hon. OREN HARRIS, JOHN A. CARVER, Jr., Acting Secretary of the Interior. DEPARTMENT OF JUSTICE, OFFICE OF THE DEPUTY ATTORNEY GENERAL, Washington, D.C., March 10, 1964. Chairman, Committee on Interstate and Foreign Commerce, DEAR MR. CHAIRMAN: This is in response to your request for the views of the Department of Justice on H.R. 10041, a bill to improve the public health through revising, consolidating, and improving the hospital and other medical facilities provisions of the Public Health Service Act. Section 622 (f) of the Public Health Service Act (42 U.S.C. 291e (f)) provides that the Surgeon General shall by general regulation prescribe, among other things, that State plans with respect to the construction of hospitals and other facilities shall provide for adequate hospital facilities without discrimination on account of race, creed, or color. It also provides that the Surgeon General's regulations may require that before approval of any application for a hospital or addition to a hospital is recommended by a State agency, assurance shall be received by the State from the applicant that the facility will be made available to all persons residing in the territorial area of the applicant without discrimination on account of race, creed, or color; an exception shall be made in cases where separate hospital facilities are provided for separate population groups if the plan makes equitable provision on the basis of need for facilities and services of like quality for each such group. Section 623 of the act (42 U.S.C. 291f (a) (4)) similarly provides that a State plan must, among other things, set forth a hospital construction program which meets the Surgeon General s requirements as to lack of discrimination on account of race, creed, or color. In reenacting title VI of the Public Health Service Act in amended form, H.R. 10041 would eliminate completely the above-mentioned antidiscrimination references. It is the view of the Department of Justice that with the exception of the separate-but-equal provision in section 622, which the Court of Appeals for the Fourth Circuit declared unconstitutional in Simkins v. Cone Memorial Hospital, 323 F. 2d 959, certiorari denied March 2, 1964, the antidiscrimination provisions should be expressly retained. U.S. Apart from the recommendation made above, the Department of Justice defers to the Department of Health, Education, and Welfare and others more directly concerned with this legislation with respect to the question of whether it should be enacted. The Bureau of the Budget has advised that there is no objection to the submission of this report from the standpoint of the administration's program. Sincerely yours, t NICHOLAS DEB. KATZENBACH, Deputy Attorney General. Hon. OREN HARRIS, COMPTROLLER GENERAL OF THE UNITED STATES, Chairman, Committee on Interstate and Foreign Commerce, DEAR MR. CHAIRMAN: By letter dated February 27, 1964, acknowledged February 28, you requested our comments on H.R. 10041. The stated purpose of this measure is to improve the public health through revising, consolidating, and improving the hosptial and other medical facilities provisions of the Public Health Service Act. In previous reports to you, particularly in our report, B-143181, April 7, 1961, on H.R. 2414, 87th Congress, we have commented on bills containing provisions which are similar to most of the provisions here discussed. The comments contained in those reports which in part are repeated here, together with additional comments, reflect our views on H.R. 10041. The improvement of the health and medical services and programs of the Public Health Service are matters of policy primarily for determination by the Congress, and, therefore, we have no recommendations to make concerning the merits of H.R. 10041. However, in the event favorable consideration is to be given the bill we offer the following comments for consideration: We would like to point out that while subsection 603(e) (1) specifies that a State may, before approval of an application, require that applicants assure that the facility contemplated shall be made available to all persons residing in the territorial area, the State plans provided for in section 604 are to reflect the number of persons living within the State who will be serviced by the new construction or modernization. It could result that while community facilities near State lines will be expected to service out-of-State persons, the State plan which will include such facilities will be based upon the number of persons actually residing within the State. Your committee may want to consider amendatory language to resolve this problem. Subsection 604 (a) (10) affords the Surgeon General access to State records concerned with the implementation of State plans required by the anticipated program. Similarly, subsection 621(b) (7) (3) affords the Surgeon General the right to examine records attendant to mortgage insurance for the construction and modernization of hospitals and other medical facilities. No provision is made to authorize the General Accounting Office to have access to those records for the purpose of examination and audit. We recommend that the bill include a provision to the effect that the Comptroller General, or his duly authorized representatives, shall have access, for the purpose of examination and audit, to any records pertaining to activities under title VI of the Public Health Service Act, 42 U.S.C. 291. Subsection 606 (c) of H.R. 10041 would authorize the Surgeon General to approve the restricted use of Federal allotments by the States to pay expenditures for administration. Federal allotments to States on other Federal-State programs generally have not been made available for administrative expenses of the States. We seriously doubt the advisability of Federal participation in such costs. Subsections 609 (a) and (b) set forth conditions that will result in recovery of Federal funds contributed toward the cost of the construction of medical facilities projects. The basis for recovery of Federal funds as stated in the proposed legislation is: "an amount bearing the same ratio to the then value (as determined by the agreement of the parties or by action brought in the district court of the United States for the district in which the facility is situated) of so much_of_the facility as constituted an approved project or projects, as the amount of Federal participation bore to the cost of the construction under such project or projects." (Emphasis supplied.) It has often been the practice of the Surgeon General to approve projects in terms of a percentage of the estimated cost of the total eligible facility, including equipment, but without identifying the physical components of the approved project. For example, assume the total eligible facility cost is $1 million, the cost approved for Federal participation is $800,000, and the percentage approved for Federal contribution is 50 percent. In this example, the approved project would be designated simply as 50 percent of $800,000. In connection with projects approved on the foregoing basis, we have observed that problems have arisen in some cases in interpreting the meaning of the phrase "so much of the facility as constituted an approved project ***" because of the absence of an identification of the physical components of the approved project. We believe that such problems are less likely to arise if the bill included language to clarify the term "project," viz, the physical components of the facility comprising the project. We note that the similar provision contained in subsection 644 (b) of H.R. 10041 does not include the underscored words "so much of *** as constituted an approved project or projects." Section 610 would authorize loans for construction of hospitals and other medical facilities for periods up to 40 years. Repayment of loans with interest is subject to such terms and conditions as may be agreed upon by the applicant and the Surgeon General. We believe the section should contain some indication as to the manner of repayment during the 40-year period, that is to say, whether the repayments shall be in equal or approximately equal annual amounts, or if deferred, the maximum period of time for such deferred repayments. Subsection 610 (c) (2) in authorizing the Surgeon General to modify any of the terms and conditions of a loan to the extent he determines such action is necessary to protect the financial interest of the United States, would appear to vest authority in the Surgeon General to modify the rate of interest determined by the Secretary of the Treasury to be payable on such loans. We suggest that the interest terms of loans should not be modified or revised by the Surgeon General without approval of the Secretary of the Treasury and, therefore, recommend the inclusion of language to so provide or the insertion of the phrase "other than the rate of interest" after the word "conditions" in line 23, page 29. Section 621 (g) of the proposed bill authorizes a maximum aggregate amount of insurance liability with respect to mortgages insured and outstanding at any one time. The bill proposes that the amount be limited to $250 million in the first year and increased by $500 million increments during each of the next 4 fiscal years so that the maximum loan insurance, which may be approved by the Surgeon General, would amount to $2.25 billion during the 5-year period. This section, when read together with the section 622 (c), clearly authorizes the insurance of loans made during the total period through June 30, 1969, in advance of any appropriations being made therefor to cover potential losses under the insurance program. We believe that congressional controls of Federal activities is best exercised through continued annual scrutiny of such activities. In order to retain the usual congressional review and controls over this program, we suggest that section 621 (g) be amended so as to provide a stated aggregate of insurance outstanding, such as the initial amount of $250 million stated on line 23, page 35. Then if the insurance program is to be later increased beyond the amount initially authorized, it would require review by the Congress of past experience and reconsideration of future needs, followed by enactment of an increase in the authorized amount of insurance that could be outstanding. Section 622 (c) of the bill would authorize the Surgeon General to issue notes and other obligations to the Secretary of the Treasury for the purpose of financing deficits in the Medical Facilities Mortgage Insurance Fund to be established by section 622(a)(1). While we normally do not favor "back-door" financing, we recognize that there may be some need therefor in programs of this nature where the loan insurance commitments previously have been executed and the loan defaults are greater than were anticipated when the applicable appropriation was made. We suggest, however, that the bill be amended by adding at the end of the new section 622 (c) language similar to the following: "The amount of notes or other obligations issued to the Secretary of the Treasury in each fiscal year shall be disclosed, and an appropriation, which is hereby authorized to be made, requested annually to pay off all notes and other obligations which may be outstanding." While section 624 authorizes the Surgeon General to utilize available services and facilities of any agency of the Federal Government, with a view toward avoiding unnecessary duplication of existing staffs and facilities of the Federal Government, there is nothing in the bill to prevent the Surgeon General from using personnel and facilities under his control to administer the mortgage insurance program under the proposed part B, title VI, of the Public Health Service Act. In this regard, subsection 645 (c) takes away the authority of the Federal Housing Commissioner to approve application for insurance on nursing homes under the law codified at 12 U.S.C. 1715w (supp. IV), 6 months after the passage of H.R. 10041. We suggest that your committee give serious consideration to whether the responsibilities for administering this insurance program should not be vested in any agency presently administering insurance programs rather than creating new authority to set up a similar operation under the Surgeon General. Other than as set out above, we have no suggestions to make concerning the consideration of H.R. 10041. Sincerely yours. Hon. OREN HARRIS, JOSEPH CAMPBELL, Comptroller General of the United States. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, Chairman, Committee on Interstate and Foreign Commerce, DEAR MR. CHAIRMAN: This is in response to your request of February 27, 1964, for a report on H.R. 10041, to improve the public health through revising, consolidating, and improving the hospital and other medical facilities provisions of the Public Health Service Act. In most major respects this bill is the same as the legislative proposal submitted to the Congress by this Department on February 10 to carry out the recommendations for extension and improvement of the Hill-Burton program in the health messages of Presidents Kennedy and Johnson. Our comments on the differences between our February 10 legislative proposal and H.R. 10041 were included in my testimony before your committee on March 9. There are enclosed herewith for the convenience of the committe a copy of the draft bill embodying our legislative proposal, a copy of the letter to the Speaker transmitting that bill and the estimates of increased costs, a copy of the detailed section-by-section analysis of that bill, and a copy of my testimony. For the reasons stated in the Presidential messages, in the letter to the Speaker, and in my testimony, we urge that H.R. 10041 be amended to accord with our draft bill and that, as so amended, it be enacted by the Congress. Sincerely, Enclosures. ANTHONY J. CELEBREZZE, Secretary. (NOTE. The draft bill mentioned in the above letter was placed in the committee files.) DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, Washington, February 10, 1964. Hon. JOHN W. MCCORMACK, Speaker of the House of Representatives, Washington, D.C. DEAR MR. SPEAKER: I am enclosing for your consideration a draft of a bill to amend title VI of the Public Health Service Act, usually known as the HillBurton program. The proposed Hospital and Medical Facilities Amendments of 1964 would revise, consolidate, improve, and expand the hospital and medical facilities construction grant programs now authorized by title VI of the Public Health Service Act. This proposal would carry out the recommendations for extension and improvement of the Hill-Burton program in the President's 1964 health message. The Hill-Burton program-now due to expire on June 30, 1964-has been in operation for more than 16 years. Its provisions now require revision to keep pace with the changing concepts of health facility planning and operation, to improve the administration of the program, and to extend the life of this highly successful program for an additional 5 years. The new programs which would be authorized are needed to redirect the emphasis of the program and bring about a better balance in the planning, construction, and modernization of health facilities. The major amendments included in the bill would: 1. Authorize a new program of special project grants to assist public or nonprofit agencies and organizations in the areawide planning of health and related facilities. 2. Authorize a new program of grants for modernization of health facilities and make adjustments in the annual appropriation authorization for construction of hospitals and public health centers. 3. Combine the separate chronic disease hospital and nursing home categories into a single "facility for long-term care" category and increase the annual appropriation ceiling for these facilities. 4. Authorize new programs of Federal mortgage insurance for the purpose of assisting in financing the cost of construction or modernization of (a) private nonprofit hospitals, nursing homes, and other medical facilities, and (b) nursing homes operated for profit. PROJECT GRANTS FOR PLANNING OF HEALTH FACILITIES A new program of special project grants would be authorized to provide assistance in the areawide planning of health facilities and related services. The bill would establish a 5-year grant program beginning July 1, 1964, to assist in the development and implementation of comprehensive regional, metropolitan area, and other local area plans for health and related facilities. Public and nonprofit agencies and organizations would be eligible to receive such grants. The bill would authorize the appropriation of $5 million for the fiscal year ending June 30, 1965, and $10 million for each of the next 4 fiscal years. Applications for grant assistance would be recommended for approval or disapproval by the State agency designated to administer the Hill-Burton program. Grants could not exceed 66% percent of the cost of approved projects after the third year for which a grant has been made for such project. As health facilities become more numerous and complex, there is a greater need for improved planning of health facilities in communities, areas, regions, and the States. Proper planning insures against the use of public and private resources to construct facilities which are not needed or poorly located and avoids the unnecessary duplication of services and facilities, and the creation of further imbalances among the kinds of services and facilities required. In short, proper planning is the best insurance that large sums of capital fundsFederal, State, and local-are spent wisely. In this connection, it is important to note that approximately $1.3 billion of Federal, State, local, and private funds are spent annually for health facility construction. NEW MODERNIZATION PROGRAM A new program of formula grants, for the modernization of health facilities, giving special consideration to those facilities serving densely populated areas, would be authorized. The program would begin on July 1, 1964, and the bill would authorize the appropriation of $50 million for fiscal year 1965, $60 million for 1966, $70 million for 1967, and $80 million for each of the next 2 fiscal years. The new modernization program and the existing program of grants for construction and expansion of hospitals and public health centers are both addressed to further improvements in the network of health facilities throughout the country. It is important, therefore, that a balance be maintained between the construction and expansion of hospital facilities on the one hand and the modernization of those in existence on the other. For this reason the annual appropriation ceiling of $150 million for the existing program would be reduced to $100 million beginning with fiscal year 1965-the year in which the new modernization program becomes operative. Many facilities throughout the country, and particularly the quality-care hospitals in our urban areas, are functionally or structurally obsolete. Shifts in populations from urban centers to the suburbs, and industrial, commercial, and transportation changes, have also contributed to the inefficient utilization of many of these facilities. A 1960 study, conducted by the Public Health Serv30-883-64-3 |