---
kind: "section"
citation: "42 U.S.C. § 254r"
title: "42"
title_heading: "The Public Health and Welfare"
number: "254r"
heading: "Grants to State Offices of Rural Health"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/254r"
units:
  - "Chapter 6A — Public Health Service"
  - "Subchapter II — General Powers and Duties"
  - "Part D — Primary Health Care"
  - "Subpart iii — scholarship program and loan repayment program"
---

# §254r. Grants to State Offices of Rural Health

- (a) **In general—** The [Secretary](/usc/42/201.md?p=c), acting through the [Director](/usc/42/11851.md?p=5) of the Federal Office of Rural Health Policy (established under [section 912 of this title](/usc/42/912.md)), shall make grants to each [State](/usc/42/201.md?p=f) Office of Rural Health for the purpose of improving health care in rural areas.
- (b) **Requirement of matching funds—**
  - (1) **In general—** Subject to [paragraph (2)](#b-2), the [Secretary](/usc/42/201.md?p=c) may not make a grant under [subsection (a)](#a) unless the [State](/usc/42/201.md?p=f) office of rural health involved agrees, with respect to the costs to be incurred in carrying out the purpose described in such subsection, to provide non-Federal contributions toward such costs in an amount equal to $3 for each $1 of Federal funds provided in the grant.
  - (2) **Waiver or reduction—** The [Secretary](/usc/42/201.md?p=c) may waive or reduce the non-Federal contribution if the [Secretary](/usc/42/201.md?p=c) determines that requiring matching funds would limit the [State](/usc/42/201.md?p=f) office of rural health’s ability to carry out the purpose described in [subsection (a)](#a).
  - (3) **Determination of amount of non-Federal contribution—** Non-Federal contributions required in [paragraph (1)](#b-1) may be in cash or in kind, fairly evaluated, including plant, equipment, or [services](/usc/42/201.md?p=a). Amounts provided by the Federal Government, or [services](/usc/42/201.md?p=a) assisted or subsidized to any significant extent by the Federal Government, may not be included in determining the amount of such non-Federal contributions.
- (c) **Certain required activities—** Recipients of a grant under [subsection (a)](#a) shall use the grant funds for purposes of—
  - (1) maintaining within the [State](/usc/42/201.md?p=f) office of rural health a clearinghouse 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](/usc/42/201.md?p=f) that relate to rural health care, including providing coordination for the purpose of avoiding redundancy in such activities; and
  - (3) identifying Federal and [State](/usc/42/201.md?p=f) [programs](/usc/42/274l–1.md?p=4) regarding rural health, and providing technical assistance to public and [nonprofit](/usc/42/300s–3.md?p=3) private entities regarding participation in such [programs](/usc/42/274l–1.md?p=4).
- (d) **Requirement regarding annual budget for office—** The [Secretary](/usc/42/201.md?p=c) may not make a grant under [subsection (a)](#a) unless the [State](/usc/42/201.md?p=f) involved agrees that, for any fiscal year for which the [State](/usc/42/201.md?p=f) office of rural health receives such a grant, the office operated pursuant to [subsection (a)](#a) of this section will be provided with an annual budget of not less than $150,000.
- (e) **Certain uses of funds—**
  - (1) **Restrictions—** The [Secretary](/usc/42/201.md?p=c) may not make a grant under [subsection (a)](#a) unless the [State](/usc/42/201.md?p=f) office of rural health involved agrees that the grant will not be expended—
    - (A) to provide health care (including providing cash payments regarding such care);
    - (B) to conduct activities for which Federal funds are expended—
      - (i) within the [State](/usc/42/201.md?p=f) to provide technical and other nonfinancial assistance under [section 254c(f) of this title](/usc/42/254c.md?p=f);
      - (ii) under a memorandum of agreement entered into with the [State](/usc/42/201.md?p=f) office of rural health under [section 254c(h) of this title](/usc/42/254c.md?p=h); or
      - (iii) under a grant under [section 254q–1 of this title](/usc/42/254q–1.md);
    - (C) to purchase medical equipment, to purchase ambulances, aircraft, or other vehicles, or to purchase major communications equipment;
    - (D) to purchase or improve real property; or
    - (E) to carry out any activity regarding a certificate of need.
  - (2) **Authorities—** Activities for which a [State](/usc/42/201.md?p=f) office of rural health may expend a grant under [subsection (a)](#a) include—
    - (A) paying the costs of maintaining an office of rural health for purposes of [subsection (a)](#a);
    - (B) subject to [paragraph (1)(B)(iii)](#e-1-B-iii), paying the costs of any activity carried out with respect to recruiting and retaining health professionals to serve in rural areas of the [State](/usc/42/201.md?p=f); and
    - (C) providing grants and contracts to public and [nonprofit](/usc/42/300s–3.md?p=3) private entities to carry out activities authorized in this section.
  - (3) **Limit on indirect costs—** The [Secretary](/usc/42/201.md?p=c) may impose a limit of no more than 15 percent on indirect costs claimed by the recipient of the grant.
- (f) **Reports—** The [Secretary](/usc/42/201.md?p=c) may not make a grant under [subsection (a)](#a) unless the [State](/usc/42/201.md?p=f) office of rural health involved agrees—
  - (1) to submit to the [Secretary](/usc/42/201.md?p=c) reports or performance data containing such information as the [Secretary](/usc/42/201.md?p=c) may require regarding activities carried out under this section; and
  - (2) to submit such a report or performance data not later than September 30 of each fiscal year immediately following any fiscal year for which the [State](/usc/42/201.md?p=f) office of rural health has received such a grant.
- (g) **Requirement of application—** The [Secretary](/usc/42/201.md?p=c) may not make a grant under [subsection (a)](#a) unless an application for the grant is submitted to the [Secretary](/usc/42/201.md?p=c) and the application is in such form, is made in such manner, and contains such agreements, assurances, and information as the [Secretary](/usc/42/201.md?p=c) determines to be necessary to carry out such subsection.
- (h) **Noncompliance—** The [Secretary](/usc/42/201.md?p=c) may not make payments under [subsection (a)](#a) to a [State](/usc/42/201.md?p=f) office of rural health for any fiscal year subsequent to the first fiscal year of such payments unless the [Secretary](/usc/42/201.md?p=c) determines that, for the immediately preceding fiscal year, the [State](/usc/42/201.md?p=f) office of rural health has complied with each of the agreements made by the [State](/usc/42/201.md?p=f) office of rural health under this section.
- (i) **Authorization of appropriations—**
  - (1) **In general—** For the purpose of making grants under [subsection (a)](#a), there are authorized to be appropriated $12,500,000 for each of fiscal years 2023 through 2027.
  - (2) **Availability—** Amounts appropriated under [paragraph (1)](#i-1) shall remain available until expended.

## Source credit

(July 1, 1944, ch. 373, title III, § 338J, as added Pub. L. 101–597, title III, § 302, Nov. 16, 1990, 104 Stat. 3032; amended Pub. L. 105–392, title III, § 301, Nov. 13, 1998, 112 Stat. 3585; Pub. L. 115–408, § 2, Dec. 31, 2018, 132 Stat. 5384; Pub. L. 117–356, § 2, Jan. 5, 2023, 136 Stat. 6282.)

## Notes

### Editorial Notes

### Prior Provisions

A prior section 254r, act July 1, 1944, ch. 373, title III, § 338I, formerly title VII, § 757, as added Aug. 1, 1977, Pub. L. 95–83, title III, § 307(n)(1), 91 Stat. 392; amended Dec. 17, 1980, Pub. L. 96–537, § 3(d), 94 Stat. 3174; renumbered § 338G, Aug. 13, 1981, Pub. L. 97–35, title XXVII, § 2709(a), 95 Stat. 908; Oct. 30, 1984, Pub. L. 98–551, § 3, 98 Stat. 2817; renumbered § 338I, Dec. 1, 1987, Pub. L. 100–177, title II, § 201(1), 101 Stat. 992; Nov. 4, 1988, Pub. L. 100–607, title VI, § 629(a)(3), 102 Stat. 3146, which related to Indian Health Scholarships and was classified to section 294y–1 of this title prior to renumbering by Pub. L. 97–35, was repealed by Pub. L. 100–713, title I, § 104(b)(1), Nov. 23, 1988, 102 Stat. 4787. For provisions continuing scholarships provided on or before Nov. 23, 1988, see section 104(b)(2) of Pub. L. 100–713.

A prior section 338J of act July 1, 1944, was renumbered section 338K by Pub. L. 101–597 and is classified to section 254s of this title.

### Amendments

2023—Subsec. (i)(1). Pub. L. 117–356 substituted “fiscal years 2023 through 2027” for “fiscal years 2018 through 2022”.

2018—Pub. L. 115–408 amended section generally. Prior to amendment, section related to grants to States for operation of offices of rural health.

1998—Subsec. (b)(1). Pub. L. 105–392, § 301(1), struck out “in cash” after “contributions” in introductory provisions.

Subsec. (j)(1). Pub. L. 105–392, § 301(2), struck out “and” after “1992,” and inserted before period at end “, and such sums as may be necessary for each of the fiscal years 1998 through 2002”.

Subsec. (k). Pub. L. 105–392, § 301(3), substituted “$36,000,000” for “$10,000,000”.

### Statutory Notes and Related Subsidiaries

### Communications for Rural Health Providers

Pub. L. 102–538, title I, § 154, formerly § 134, Oct. 27, 1992, 106 Stat. 3541, renumbered § 154 by Pub. L. 103–66, title VI, § 6001(a)(2), Aug. 10, 1993, 107 Stat. 379, directed Secretary of Commerce, in conjunction with Secretary of Health and Human Services, to establish an advisory panel to develop recommendations for the improvement of rural health care through the collection of information needed by providers and the improvement in the use of communications to disseminate such information and, not later than 1 year after establishment of Panel to prepare and submit to Congress a report summarizing the recommendations made by the Panel.

Similar provisions were contained in Pub. L. 101–555, § 3, Nov. 15, 1990, 104 Stat. 2760.