---
kind: "section"
citation: "42 U.S.C. § 300t–12"
title: "42"
title_heading: "The Public Health and Welfare"
number: "300t–12"
heading: "Grants for discontinuance and conversion"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/300t-12"
units:
  - "Chapter 6A — Public Health Service"
  - "Subchapter XIV — Health Resources Development"
  - "Part E — Program To Assist and Encourage Voluntary Discontinuance of Unneeded Hospital Services and Conversion of Unneeded Hospital Services to Other Health Services Needed by Community"
---

# §300t–12. Grants for discontinuance and conversion

- (a) **Terms and conditions; determination of amount; authorized uses—**
  - (1) A grant to a [hospital](/usc/42/300s–3.md?p=1) under the [program](/usc/42/274l–1.md?p=4) shall be subject to such terms and conditions as the [Secretary](/usc/42/201.md?p=c) may by regulation prescribe to assure that the grant is used for the purpose for which it was made.
  - (2) The amount of any such grant shall be determined by the [Secretary](/usc/42/201.md?p=c). The recipient of such a grant may use the grant—
    - (A) in the case of a grantee which discontinues the provision of all [hospital](/usc/42/300s–3.md?p=1) [services](/usc/42/201.md?p=a) or all inpatient [hospital](/usc/42/300s–3.md?p=1) [services](/usc/42/201.md?p=a) or an identifiable part of a [hospital](/usc/42/300s–3.md?p=1) facility which provides inpatient [hospital](/usc/42/300s–3.md?p=1) [services](/usc/42/201.md?p=a), for the liquidation of the outstanding debt on the facilities of the grantee used for the provision of the [services](/usc/42/201.md?p=a) or for the liquidation of the outstanding debt of the grantee on such identifiable part;
    - (B) in the case of a grantee which in discontinuing the provision of an inpatient [hospital](/usc/42/300s–3.md?p=1) [service](/usc/42/201.md?p=a) converts or proposes to convert an identifiable part of a [hospital](/usc/42/300s–3.md?p=1) facility used in the provision of the discontinued [service](/usc/42/201.md?p=a) to the delivery of other health [services](/usc/42/201.md?p=a), for the planning, development (including [construction](/usc/42/300s–3.md?p=7) and acquisition of equipment), and delivery of the health [service](/usc/42/201.md?p=a);
    - (C) to provide reasonable termination pay for personnel of the grantee who will lose employment because of the discontinuance of [hospital](/usc/42/300s–3.md?p=1) [services](/usc/42/201.md?p=a) made by the grantee, retraining of such personnel, assisting such personnel in securing employment, and other costs of implementing arrangements described in [subsection (c)](#c); and
    - (D) for such other costs which the [Secretary](/usc/42/201.md?p=c) determines may need to be incurred by the grantee in discontinuing [hospital](/usc/42/300s–3.md?p=1) [services](/usc/42/201.md?p=a).
- (b) **Application; submission and approval; form; required provisions; review by health systems agency; basis of State Agency’s recommendations; urban or rural poverty population considerations; approval by Secretary; restrictions and special considerations—**
  - (1) No grant may be made to a [hospital](/usc/42/300s–3.md?p=1) unless an application therefor is submitted to and approved by the [Secretary](/usc/42/201.md?p=c). Such an application shall be in such form and submitted in such manner as the [Secretary](/usc/42/201.md?p=c) may prescribe and shall include—
    - (A) a description of each [service](/usc/42/201.md?p=a) to be discontinued and, if a part of a [hospital](/usc/42/300s–3.md?p=1) is to be discontinued or converted to another use in connection with such discontinuance, a description of such part;
    - (B) an evaluation of the impact of such discontinuance and conversion on the provision of health care in the health [service](/usc/42/201.md?p=a) area in which such [service](/usc/42/201.md?p=a) is provided;
    - (C) an estimate of the change in the applicant’s costs which will result from such discontinuance and conversion; and
    - (D) reasonable assurance that all laborers and mechanics employed by contractors or subcontractors in the performance of work on a [project](/usc/42/13641.md?p=2) will be paid wages at rates not less than those prevailing on similar [construction](/usc/42/300s–3.md?p=7) in the locality as determined by the [Secretary](/usc/42/201.md?p=c) of Labor in accordance with sections 3141–3144, [3146](/usc/40/3146.md), and [3147](/usc/40/3147.md) of title 40, and the [Secretary](/usc/42/201.md?p=c) of Labor shall have with respect to such labor standards the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (15 FR 3176; 5 U.S.C. Appendix) and [section 3145 of title 40](/usc/40/3145.md);
    - (E) such other information as the [Secretary](/usc/42/201.md?p=c) may require.
  - (2)
    - (A) The [health systems agency](/usc/42/300e–1.md?p=6) for the health [service](/usc/42/201.md?p=a) area in which is located a [hospital](/usc/42/300s–3.md?p=1) applying for a grant under the [program](/usc/42/274l–1.md?p=4) shall (i) in making the review of the applicant’s application under section 300l–2(e)[^1] of this title, determine the need for each [service](/usc/42/201.md?p=a) or part proposed to be discontinued by the applicant, (ii) in the case of an application for the conversion of a facility, determine the need for each [service](/usc/42/201.md?p=a) which will be provided as a result of the conversion, and (iii) make a recommendation to the [State Agency](/usc/42/300s–3.md?p=12) for the [State](/usc/42/201.md?p=f) in which the applicant is located respecting approval by the [Secretary](/usc/42/201.md?p=c) of the applicant’s application.
    - (B) A [State Agency](/usc/42/300s–3.md?p=12) which has received a recommendation from a [health systems agency](/usc/42/300e–1.md?p=6) under [subparagraph (A)](#b-2-A) respecting an application shall, after consideration of such recommendation, make a recommendation to the [Secretary](/usc/42/201.md?p=c) respecting the approval by the [Secretary](/usc/42/201.md?p=c) of the application. A [State Agency](/usc/42/300s–3.md?p=12)’s recommendation under this subparagraph respecting the approval of an application (i) shall be based upon (I) the need for each [service](/usc/42/201.md?p=a) or part proposed to be discontinued by the applicant, (II) in the case of an application for the conversion of a facility, the need for each [service](/usc/42/201.md?p=a) which will be provided as a result of the conversion, and (III) such other criteria as the [Secretary](/usc/42/201.md?p=c) may prescribe, and (ii) shall be accompanied by the [health systems agency](/usc/42/300e–1.md?p=6)’s recommendation made with respect to the approval of the application.
    - (C) In determining, under subparagraphs [(A)](#b-2-A) and [(B)](#b-2-B), the need for the [service](/usc/42/201.md?p=a) (or [services](/usc/42/201.md?p=a)) or part proposed to be discontinued or converted by an applicant for a grant, a [health systems agency](/usc/42/300e–1.md?p=6) and [State Agency](/usc/42/300s–3.md?p=12) shall give special consideration to the unmet needs and existing access patterns of urban or rural poverty populations.
  - (3)
    - (A) The [Secretary](/usc/42/201.md?p=c) may not approve an application of a [hospital](/usc/42/300s–3.md?p=1) for a grant—
      - (i) if a [State Agency](/usc/42/300s–3.md?p=12) recommended that the application not be approved, or
      - (ii) if the [Secretary](/usc/42/201.md?p=c) is unable to determine that the cost of providing inpatient health [services](/usc/42/201.md?p=a) in the health [service](/usc/42/201.md?p=a) area in which the applicant is located will be less than if the inpatient health [services](/usc/42/201.md?p=a) proposed to be discontinued were not discontinued.
    - (B) In considering applications of [hospitals](/usc/42/300s–3.md?p=1) for grants the [Secretary](/usc/42/201.md?p=c) shall consider the recommendations of [health systems agencies](/usc/42/300e–1.md?p=6) and [State Agencies](/usc/42/300s–3.md?p=12) and shall give special consideration to applications (i) which will assist [health systems agencies](/usc/42/300e–1.md?p=6) and [State Agencies](/usc/42/300s–3.md?p=12) to meet the goals in their health systems plans and [State](/usc/42/201.md?p=f) health plans, or (ii) which will result in the greatest reduction in [hospital](/usc/42/300s–3.md?p=1) costs within a health [service](/usc/42/201.md?p=a) area.
- (c) **Certification of protective arrangements for employment benefits and interests; guidelines; satisfactory arrangement determinations—**
  - (1) Except as provided in [paragraph (3)](#c-3), the [Secretary](/usc/42/201.md?p=c) may not approve an application submitted under [subsection (b)](#b) unless the [Secretary](/usc/42/201.md?p=c) of Labor has certified that fair and equitable arrangements have been made to protect the interests of [employees](/usc/42/300gg–91.md?p=d-5) affected by the discontinuance of [services](/usc/42/201.md?p=a) against a worsening of their positions with respect to their employment, including arrangements to preserve the rights of [employees](/usc/42/300gg–91.md?p=d-5) under collective-bargaining agreements, continuation of collective-bargaining rights consistent with the provisions of the National Labor Relations Act [[29 U.S.C. 151](/usc/29/151.md) et seq.], reassignment of affected [employees](/usc/42/300gg–91.md?p=d-5) to other jobs, retraining [programs](/usc/42/274l–1.md?p=4), protecting pension, health benefits, and other fringe benefits of affected [employees](/usc/42/300gg–91.md?p=d-5), and arranging adequate severance pay, if necessary.
  - (2) The [Secretary](/usc/42/201.md?p=c) of Labor shall by regulation prescribe guidelines for arrangements for the protection of the interests of [employees](/usc/42/300gg–91.md?p=d-5) affected by the discontinuance of [hospital](/usc/42/300s–3.md?p=1) [services](/usc/42/201.md?p=a). The [Secretary](/usc/42/201.md?p=c) of Labor shall consult with the [Secretary](/usc/42/201.md?p=c) of Health and Human [Services](/usc/42/201.md?p=a) in the promulgation of such guidelines. Such guidelines shall first be promulgated not later than the promulgation of [regulations](/usc/42/201.md?p=d) by the [Secretary](/usc/42/201.md?p=c) for the administration of the grants authorized by [section 300t–11 of this title](/usc/42/300t–11.md).
  - (3) The [Secretary](/usc/42/201.md?p=c) of Labor shall review each application submitted under [subsection (b)](#b) to determine if the arrangements described in [paragraph (1)](#c-1) have been made and if they are satisfactory and shall notify the [Secretary](/usc/42/201.md?p=c) respecting his determination. Such review shall be completed within—
    - (A) ninety days from the date of the receipt of the application from the [Secretary](/usc/42/201.md?p=c) of Health and Human [Services](/usc/42/201.md?p=a), or
    - (B) one hundred and twenty days from such date if the [Secretary](/usc/42/201.md?p=c) of Labor has by regulation prescribed the circumstances under which the review will require at least one hundred and twenty days.

    If within the applicable period, the [Secretary](/usc/42/201.md?p=c) of Labor does not notify the [Secretary](/usc/42/201.md?p=c) of Health and Human [Services](/usc/42/201.md?p=a) respecting his determination, the [Secretary](/usc/42/201.md?p=c) of Health and Human [Services](/usc/42/201.md?p=a) shall review the application to determine if the applicant has made the arrangements described in [paragraph (1)](#c-1) and if such arrangements are satisfactory. The [Secretary](/usc/42/201.md?p=c) may not approve the application unless he determines that such arrangements have been made and that they are satisfactory.

- (d) **Records and audits requirements—** The records and audits requirements of [section 292e](/usc/42/292e.md)[^1] of this title shall apply with respect to grants made under [subsection (a)](#a).
- (e) **“Hospital” defined—** For purposes of this part, the term “[hospital](/usc/42/300s–3.md?p=1)” means, with respect to any fiscal year, an institution (including a distinct part of an institution participating in the [programs](/usc/42/274l–1.md?p=4) established under title XVIII of the Social Security Act [[42 U.S.C. 1395](/usc/42/1395.md) et seq.])—
  - (1) which satisfies paragraphs [(1)](/usc/42/1861.md) and [(7)](/usc/42/1861.md) of section 1861(e) of such Act [[42 U.S.C. 1395x(e)](/usc/42/1395x.md?p=e)],
  - (2) imposes charges or accepts payments for [services](/usc/42/201.md?p=a) provided to patients, and
  - (3) the average duration of a patient’s stay in which was thirty days or less in the preceding fiscal year,

  but such term does not include a Federal [hospital](/usc/42/300s–3.md?p=1) or a psychiatric [hospital](/usc/42/300s–3.md?p=1) (as described in section 1861(f)(1) of the Social Security Act [[42 U.S.C. 1395x(f)(1)](/usc/42/1395x.md?p=f-1)]).


## Footnotes

[^1]: See References in Text note below.

## Source credit

(July 1, 1944, ch. 373, title XVI, § 1642, as added Pub. L. 96–79, title III, § 301(a), Oct. 4, 1979, 93 Stat. 637; amended Pub. L. 96–88, title V, § 509(b), Oct. 17, 1979, 93 Stat. 695.)

## Notes

### Editorial Notes

### References in Text

Section 300l–2 of this title, referred to in subsec. (b)(2)(A), was repealed effective Jan. 1, 1987, by Pub. L. 99–660, title VII, § 701(a), Nov. 14, 1986, 100 Stat. 3799.

The National Labor Relations Act, referred to in subsec. (c)(1), is act July 5, 1935, ch. 372, 49 Stat. 452, which is classified generally to subchapter II (§ 151 et seq.) of chapter 7 of Title 29, Labor. For complete classification of this Act to the Code, see section 167 of Title 29 and Tables.

Section 292e of this title, referred to in subsec. (d), was in the original a reference to section 705 of act July 1, 1944. Section 705 of that Act was omitted in the general revision of subchapter V of this chapter by Pub. L. 102–408, title I, § 102, Oct. 13, 1992, 106 Stat. 1994. Pub. L. 102–408 enacted a new section 705 of act July 1, 1944, relating to eligibility of borrowers and terms of insured loans, and a new section 706, relating to certificates of loan insurance, which are classified to sections 292d and 292e, respectively, of this title.

The Social Security Act, referred to in subsec. (e), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Title XVIII of the Social Security Act is classified generally to subchapter XVIII (§ 1395 et seq.) of chapter 7 of this title. For complete classification of this Act to the Code, see section 1305 of this title and Tables.

### Codification

In subsec. (b)(1)(D), “sections 3141–3144, 3146, and 3147 of title 40” substituted for “the Act of March 3, 1931 (40 U.S.C. 276a—276a–5, known as the Davis-Bacon Act)” and “section 3145 of title 40” substituted for “section 2 of the Act of June 13, 1934 (40 U.S.C. 276c)” on authority of Pub. L. 107–217, § 5(c), Aug. 21, 2002, 116 Stat. 1303, the first section of which enacted Title 40, Public Buildings, Property, and Works.

### Statutory Notes and Related Subsidiaries

### Change of Name

“Secretary of Health and Human Services” substituted for “Secretary of Health, Education, and Welfare” in subsecs. (a), (b), and (c) pursuant to section 509(b) of Pub. L. 96–88, which is classified to section 3508(b) of Title 20, Education.