104 STAT. 3032 PUBLIC LAW 101-597 —NOV. 16, 1990 "(B) Subject to paragraph (3), in the case of a State with 1 or more initial breaches for purposes of subparagraph (A), the Secretary shall reduce the amount of a grant under subsection (a) to the State for the fiscal year involved by an amount equal to the sum of the expenditures of Federal funds made regarding the contracts involved and an amount representing interest on the amount of such expenditures, determined with respect to each contract on the basis of the maximum legal rate prevailing for loans made during the time amounts were paid under the contract, as determined by the Treasurer of the United States. "(3) WAIVER REGARDING REDUCTION IN GRANT.— The Secretary may waive the requirement established in paragraph (2)(B) with respect to the initial breach of a contract if the Secretary determines that such breach by the health professional involved was attributable solely to the professional having a serious illness. "(h) DEFINITIONS.—For purposes of this section, the term 'State' means each of the several States, " (i) AUTHORIZATION OF APPROPRIATIONS. — "(1) IN GENERAL.—For the purpose of making grants under subsection (a), there is authorized to be appropriated $10,000,000 for each of the fiscal years 1991 through 1995. "(2) AVAILABILITY. — Amounts appropriated under paragraph (1) shall remain available until expended.". 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 42 USC 254s. section 338J as section 338K, and by inserting after section 3381 the following new section: 42 USC 254r. "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 pasonents 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 pa3mients, not less than $1 for each $1 ®f Federal funds provided in the grant; and "(C) for any third fiscal year of such pasnnents, not less than $3 for each $1 of Federal funds provided in the grant. " (2) DETERMINATION OF AMOUNT OF NON-FEDERAL CONTRIBU- TION. — "(A) Subject to subparagraph (B), non-Federal contributions required in paragraph (1) may be in cash or in kind, fairly
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