106 STAT. 398 PUBLIC LAW 102-321—JULY 10, 1992 "(C) to purchase or improve land, purchase, construct, or permanently improve (other than minor remodeling) any building or other facility, or purchase major medical equipment; "(D) to satisfy any requirement for the expenditure of non-Federal funds as a condition for the receipt of Federal funds; "(E) to provide financial assistance to any entity other than a public or nonprofit private entity; or " (F) to cany out any progrema prohibited by section 256(b) of the Health Omnibus Programs Extension of 1988 (42 U.S.C. 300ee-5). "(2) LIMITATION ON ADMINISTRATIVE EXPENSES. — A funding agreement for a grant under section 1921 is that the State involved will not expend more than 5 percent of the grant to pay the costs of administering the grant. "(3) LIMITATION REGARDING PENAL AND CORRECTIONAL INSTITUTIONS,—^A funding agreement for a State for a grant under section 1921 is that, in expending the grant for the purpose of providing treatment services in penal or correctional institutions of the State, the State will not expend more than an amount equal to the amount expended for such purpose by the State from the grant made under section 1912A to the State for fiscal year 1991 (as section 1912A was in effect for such fiscal year). "(b) EXCEPTION REGARDING INPATIENT HOSPITAL SERVICES. — "(1) MEDICAL NECESSITY AS PRECONDITION.—W ith respect to compliance with the agreement made under subsection (a), a State may expend a grant under section 1921 to provide inpatient hospital services as treatment for substance abuse only if it has been determined, in accordance with guidelines issued by the Secretary, that such treatment is a medical necessity for the individual involved, and that the individual cannot be effectively treated in a community-based, nonhospital, residential program of treatment. "(2) RATE OF PAYMENT. — In the case of an individual for whom a grant under section 1921 is expended to provide inpatient hospital services described in paragraph (1), a mnding agreement for the grant for the State involved is that the daily rate of payment provided to the hospital for providing the services to the individual will not exceed the comparable daily rate provided for community-based, nonhospital, residential programs of treatment for substance abuse. "(c) WAIVER REGARDING CONSTRUCTION OF FACILITIES. — "(1) IN GENERAL. —The Secretary may provide to any State a wsdver of the restriction established in subsection (a)(1)(C) for the purpose of authorizing the State to expend a grant under section 1921 for the construction of a new facility or rehabilitation of an existing facility, but not for land acquisition. "(2) STANDARD REGARDING NEED FOR WAIVER. —The Secretary may approve a waiver under paragraph (1) only if the State demonstrates to the Secretary that adequate treatment cannot be provided through the use of existing facilities and that alternative facilities in existing suitable buildings are not available. "(3) AMOUNT. —In greinting a waiver under paragraph (1), the Secretary shall allow the use of a specified amount of
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