42 CFR §124.3

1. (a)Eligible applicants. A grant under section 1625 may only be made to a State or political subdivision of a State, including any city, town, county, borough, hospital district authority, or public or quasi-public corporation for a project described in paragraph (b) of this section for a medical facility owned, operated, or owned and operated by the State or political subdivision.
2. (b)Eligible project. A grant under section 1625 may be made only for a construction and/or modernization project designed to:
   1. (1)Eliminate or prevent safety hazards which under Federal, State, and/or local fire, building or life safety codes or regulations, will, in the judgment of the Secretary result in one or more of the following:
      1. (i)Loss of licensure for the facility.
      2. (ii)Closing of all or a substantial part of the facility,
      3. (iii)Loss of eligibility for reimbursement under title XVIII or title XIX of the Social Security Act; or
   2. (2)Avoid noncompliance with State licensure or voluntary accreditation standards where noncompliance will, in the judgment of the Secretary, result in one or both of the following:
      1. (i)Loss of licensure for the facility,
      2. (ii)Loss of accreditation resulting in loss of eligibility for reimbursement under title XVIII or title XIX of the Social Security Act.