42 U.S.C. § 291f — Payments for construction or modernization

(a) Certification and payment: Once the state agency certifies — based on its own inspection — that work has been done or purchases made according to the approved plans, and that an installment payment is now due, that payment is made to the state from its allotment. There are three exceptions: (1) if the state isn't legally able to pay the applicant, or asks that payment go directly to the applicant, the payment is made straight to the applicant instead; (2) if the Surgeon General has reason to believe something has happened that requires action under section 291g, payment may be withheld, in whole or in part, after the state agency gets notice and a chance for a hearing, until the problem is fixed or the hearing is resolved; and (3) total payments for any one project can never exceed the federal government's share of that project's cost. (b) Additional payments for amendments: If an approved application is later amended, or the project's estimated cost is revised upward, any extra payment needed comes from the state's allotment for the year the amendment or revision is approved. (c) Administration expenses: (1) At a state's request, part of its allotment can be used to cover half (or a smaller share, if the state prefers) of what the Surgeon General finds is reasonably needed to administer the state's plan that year — but never more than 4 percent of the state's total allotment for the year, or $100,000, whichever is less. These payments can be made in advance or as reimbursement, in whatever installments the Surgeon General decides. (2) A state can only receive this administration money for a given year if it also spends, from its own state funds, at least as much on administering its plan as it spent in the fiscal year ending June 30, 1970.