ESTABLISHMENT OF PROGRAM OF GRANTS TO STATES.

SEC. 302. ESTABLISHMENT OF PROGRAM OF GRANTS TO STATES.Subpart III of part D of title III of the Public Health Service Act, as amended by section 204 of this Act, is amended by redesignating section 338J as section 338K, and by inserting after section 3381 the following new section: “SEC. 338J. GRANTS TO STATES FOR OPERATION OF OFFICES OF RURAL HEALTH. “(a) In General.—The Secretary, acting through the Director of the Office of Rural Health Policy (established in section 711 of the Social Security Act), may make grants to States for the purpose of improving health care in rural areas through the operation of State offices of rural health. “(b) Requirement of Matching Funds.— “(1) In general.— The Secretary may not make a grant under subsection (a) unless the State involved agrees, with respect to the costs to be incurred by the State in carrying out the purpose described in such subsection, to provide non-Federal contributions in cash toward such costs in an amount equal to— “(A) for the first fiscal year of payments under the grant, not less than $1 for each $3 of Federal funds provided in the grant; “(B) for any second fiscal year of such payments, not less than $1 for each $1 of Federal funds provided in the grant; and “(C) for any third fiscal year of such payments, not less than $3 for each $1 of Federal funds provided in the grant. “(2) Determination of amount of non-federal contribution.— “(A) Subject to subparagraph (B), non-Federal contributions required in paragraph (1) may be in cash or in kind, fairly 104 STAT. 3033evaluated, including plant, equipment, or services. Amounts provided by the Federal Government, or services assisted or subsidized to any significant extent by the Federal Government, may not be included in determining the amount of such non-Federal contributions. “(B) The Secretary may not make a grant under subsection (a) unless the State involved agrees that— “(i) for the first fiscal year of payments under the grant, 100 percent or less of the non-Federal contributions required in paragraph (1) will be provided in the form of in-kind contributions; “(ii) for any second fiscal year of such payments, not more than 50 percent of such non-Federal contributions will be provided in the form of in-kind contributions; and “(iii) for any third fiscal year of such payments, such non-Federal contributions will be provided solely in the form of cash. “(c) Certain Required Activities.—The Secretary may not make a grant under subsection (a) unless the State involved agrees that activities carried out by an office operated pursuant to such subsection will include— “(1) establishing and maintaining within the State a clearing-house for collecting and disseminating information on— “(A) rural health care issues; “(B) research findings relating to rural health care; and “(C) innovative approaches to the delivery of health care in rural areas; “(2) coordinating the activities carried out in the State that relate to rural health care, including providing coordination for the purpose of avoiding redundancy in such activities; and “(3) identifying Federal and State programs regarding rural health, and providing technical assistance to public and non-profit private entities regarding participation in such programs. “(d) Requirement Regarding Annual Budget for Office.— The Secretary may not make a grant under subsection (a) unless the State involved agrees that, for any fiscal year for which the State receives such a grant, the office operated pursuant to subsection (a) will be provided with an annual budget of not less than $50,000. “(e) Certain Uses of Funds.— “(1) Restrictions.— The Secretary may not make a grant under subsection (a) unless the State involved agrees that— “(A) if research with respect to rural health is conducted pursuant to the grant, not more than 10 percent of the grant will be expended for such research; and “(B) the grant will not be expended— “(i) to provide health care (including providing cash payments regarding such care); “(ii) to conduct activities for which Federal funds are expended— “(I) within the State to provide technical and other nonfinancial assistance under subsection (f) of section 330; “(II) under a memorandum of agreement entered into with the State under subsection (h) of such section; or “(III) under a grant under section 3381; 104 STAT. 3034 “(iii) to purchase medical equipment, to purchase ambulances, aircraft, or other vehicles, or to purchase major communications equipment; “(iv) to purchase or improve real property; or “(v) to carry out any activity regarding a certificate of need. “(2) Authorities.— Activities for which a State may expend a grant under subsection (a) include— “(A) paying the costs of establishing an office of rural health for purposes of subsection (a); “(B) subject to paragraph (1)(B)(ii)(ni), paying the costs of any activity carried out with respect to recruiting and retaining health professionals to serve in rural areas of the State; and “(C) providing grants and contracts to public and non-profit private entities to carry out activities authorized in this section. “(f) Reports.—The Secretary may not make a grant under subsection (a) unless the State involved agrees— “(1) to submit to the Secretary reports containing such information as the Secretary may require regarding activities carried out under this section by the State; and “(2) to submit such a report not later than January 10 of each fiscal year immediately following any fiscal year for which the State has received such a grant. “(g) Requirement of Application.—The Secretary may not make a grant under subsection (a) unless an application for the grant is submitted to the Secretary and the application is in such form, is made in such manner, and contains such agreements, assurances, and information as the Secretary determines to be necessary to carry out such subsection. “(h) Noncompliance.—The Secretary may not make payments under subsection (a) to a State for any fiscal year subsequent to the first fiscal year of such payments unless the Secretary determines that, for the immediately preceding fiscal year, the State has complied with each of the agreements made by the State under this section. “(i) Definitions.—For purposes of this section, the term ‘State’ means each of the several States. “(j) Authorization of Appropriations.— “(1) In general.—For the purpose of making grants under subsection (a), there are authorized to be appropriated $3,000,000 for fiscal year 1991, $4,000,000 for fiscal year 1992, and $3,000,000 for fiscal year 1993. “(2) Availability.—Amounts appropriated under paragraph (1) shall remain available until expended. “(k) Termination of Program.—No grant may be made under this section after the aggregate amounts appropriated under subsection (j)(1) are equal to $10,000,000.”.