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``(C) A level III deficiency is an individual or community facility with water or sewer service in the home, piped services or a haul system with holding tanks and interior plumbing, or where major significant interruptions to water supply or sewage disposal occur frequently, requiring major capital improvements to correct the deficiencies. There is no access to or no approved or permitted solid waste facility available.
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``(D) A level IV deficiency is an individual or community facility where there are no piped water or sewer facilities in the home or the facility has become inoperable due to major component failure or where only a washeteria or central facility exists.
``(E) A level V deficiency is the absence of a sanitation facility, where individual homes do not have access to safe drinking water or adequate wastewater disposal.
``(i) DEFINITIONS.--In this section:
``(1) FACILITY.--The terms `facility' or `facilities' shall have the same meaning as the terms `system' or `systems' unless the context requires otherwise.
``(2) INDIAN COMMUNITY.--The term `Indian community' means a geographic area, a significant proportion of whose inhabitants are Indians and which is served by or capable of being served by a facility described in this section.
``SEC. 303. PREFERENCE TO INDIANS AND INDIAN FIRMS.
``(a) IN GENERAL.--The Secretary, acting through the Service, may utilize the negotiating authority of the Act of June 25, 1910 (25 U.S.C. 47), to give preference to any Indian or any enterprise, partnership, corporation, or other type of business organization owned and controlled by an Indian or Indians including former or currently federally recognized Indian tribes in the State of New York (hereinafter referred to as an `Indian firm') in the construction and renovation of Service facilities pursuant to section 301 and in the construction of safe water and sanitary waste disposal facilities pursuant to section 302. Such preference may be accorded by the Secretary unless the Secretary finds, pursuant to rules and regulations promulgated by the Secretary, that the project or function to be contracted for will not be satisfactory or such project or function cannot be properly completed or maintained under the proposed contract. The Secretary, in arriving at such finding, shall consider whether the Indian or Indian firm will be deficient with respect to--
``(1) ownership and control by Indians;
``(2) equipment;
``(3) bookkeeping and accounting procedures;
``(4) substantive knowledge of the project or function to be contracted for;
``(5) adequately trained personnel; or
``(6) other necessary components of contract performance.
``(b) EXEMPTION FROM DAVIS-BACON.--For the purpose of implementing the provisions of this title, construction or renovation of facilities constructed or renovated in whole or in part by funds made available pursuant to this title are exempt from the Act of March 3, 1931 (40 U.S.C. 276a--276a-5, known as the Davis-Bacon Act). For all health facilities, staff quarters and sanitation facilities, construction and renovation subcontractors shall be paid wages at rates that are not less than the prevailing wage r ates for similar construction in the locality involved, as determined by the Indian tribe, Tribes, or tribal organizations served by such facilities.
``SEC. 304. SOBOBA SANITATION FACILITIES.
``Nothing in the Act of December 17, 1970 (84 Stat. 1465) shall be construed to preclude the Soboba Band of Mission Indians and the Soboba Indian Reservation from being provided with sanitation facilities and services under the authority of section 7 of the Act of August 5, 1954 (68 Stat 674), as amended by the Act of July 31, 1959 (73 Stat. 267).
``SEC. 305. EXPENDITURE OF NONSERVICE FUNDS FOR RENOVATION.
``(a) PERMISSIBILITY.--
``(1) IN GENERAL.--Notwithstanding any other provision of law, the Secretary is authorized to accept any major expansion, renovation or modernization by any Indian tribe of any Service facility, or of any other Indian health facility operated pursuant to a funding agreement entered into under the Indian Self-Determination and Education Assistance Act, including--
``(A) any plans or designs for such expansion, renovation or modernization; and
``(B) any expansion, renovation or modernization for which funds appropriated under any Federal law were lawfully expended;
but only if the requirements of subsection (b) are met.
``(2) PRIORITY LIST.--The Secretary shall maintain a separate priority list to address the need for increased operating expenses, personnel or equipment for such facilities described in paragraph (1). The methodology for establishing priorities shall be developed by negotiated rulemaking under section 802. The list of priority facilities will be revised annually in consultation with Indian tribes and tribal organizations.
``(3) REPORT.--The Secretary shall submit to the President, for inclusion in each report required to be transmitted to the Congress under section 801, the priority list maintained pursuant to paragraph (2).
``(b) REQUIREMENTS.--The requirements of this subsection are met with respect to any expansion, renovation or modernization if--
``(1) the tribe or tribal organization--
``(A) provides notice to the Secretary of its intent to expand, renovate or modernize; and
``(B) applies to the Secretary to be placed on a separate priority list to address the needs of such new facilities for increased operating expenses, personnel or equipment; and
``(2) the expansion renovation or modernization--
``(A) is approved by the appropriate area director of the Service for Federal facilities; and
``(B) is administered by the Indian tribe or tribal organization in accordance with any applicable regulations prescribed by the Secretary with respect to construction or renovation of Service facilities.
``(c) RIGHT OF TRIBE IN CASE OF FAILURE OF FACILITY TO BE USED AS A SERVICE FACILITY.--If any Service facility which has been expanded, renovated or modernized by an Indian tribe under this section ceases to be used as a Service facility during the 20-year period beginning on the date such expansion, renovation or modernization is completed, such Indian tribe shall be entitled to recover from the United States an amount which bears the same ratio to the value of such facility at the time of such cessation as the value of such expansion, renovation or modernization (less the total amount of any funds provided specifically for such facility under any Federal program that were expended for such expansion, renovation or modernization) bore to the value of such facility at the time of the completion of such expansion, renovation or modernization.
``SEC. 306. FUNDING FOR THE CONSTRUCTION, EXPANSION, AND MODERNIZATION OF SMALL AMBULATORY CARE FACILITIES.
``(a) AVAILABILITY OF FUNDING.--
``(1) IN GENERAL.--The Secretary, acting through the Service and in consultation with Indian tribes and tribal organization, shall make funding available to tribes and tribal organizations for the construction, expansion, or modernization of facilities for the provision of ambulatory care services to eligible Indians (and noneligible persons as provided for in subsections (b)(2) and (c)(1)(C)). Funding under this section may cover up to 100 percent of the costs of such construction, expansion, or modernization. For the purposes of this section, the term `construction' includes the replacement of an existing facility.
``(2) REQUIREMENT.--Funding under paragraph (1) may only be made available to an Indian tribe or tribal organization operating an Indian health facility (other than a facility owned or constructed by the Service, including a facility originally owned or constructed by the Service and transferred to an Indian tribe or tribal organization) pursuant to a funding agreement entered into under the Indian Self-Determination and Education Assistance Act.
``(b) USE OF FUNDS.--
``(1) IN GENERAL.--Funds provided under this section may be used only for the construction, expansion, or modernization (including the planning and design of such construction, expansion, or modernization) of an ambulatory care facility--
``(A) located apart from a hospital;
``(B) not funded under section 301 or section 307; and
``(C) which, upon completion of such construction, expansion, or modernization will--
``(i) have a total capacity appropriate to its projected service population;
``(ii) provide annually not less than 500 patient visits by eligible Indians and other users who are eligible for services in such facility in accordance with section 807(b)(1)(B); and
``(iii) provide ambulatory care in a service area (specified in the funding agreement entered into under the Indian Self-Determination and Education Assistance Act) with a population of not less than 1,500 eligible Indians and other users who are eligible for services in such facility in accordance with section 807(b)(1)(B).
``(2) LIMITATION.--Funding provided under this section may be used only for the cost of that portion of a construction, expansion or modernization project that benefits the service population described in clauses (ii) and (iii) of paragraph (1)(C). The requirements of such clauses (ii) and (iii) shall not apply to a tribe or tribal organization applying for funding under this section whose principal office for health care administration is located on an island or where such office is not located on a road system providing direct access to an inpatient hospital where care is available to the service population.
``(c) APPLICATION AND PRIORITY.--
``(1) APPLICATION.--No funding may be made available under this section unless an application for such funding has been submitted to and approved by the Secretary. An application or proposal for funding under this section shall be submitted in accordance with applicable regulations and shall set forth reasonable assurance by the applicant that, at all times after the construction, expansion, or modernization of a facility carried out pursuant to funding received under this section--
``(A) adequate financial support will be available for the provision of services at such facility;
``(B) such facility will be available to eligible Indians without regard to ability to pay or source of payment; and
``(C) such facility will, as feasible without diminishing the quality or quantity of services provided to eligible Indians, serve noneligible persons on a cost basis.
``(2) PRIORITY.--In awarding funds under this section, the Secretary shall give priority to tribes and tribal organizations that demonstrate--
``A) a need for increased ambulatory care services; and
``(B) insufficient capacity to deliver such services.
``(d) FAILURE TO USE FACILITY AS HEALTH FACILITY.--If any facility (or portion thereof)
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``(e) NO INCLUSION IN TRIBAL SHARE.--Funding provided to Indian tribes and tribal organizations under this section shall be non-recurring and shall not be available for inclusion in any individual tribe's tribal share for an award under the Indian Self-Determination and Education Assistance Act or for reallocation or redesign thereunder.
``SEC. 307. INDIAN HEALTH CARE DELIVERY DEMONSTRATION PROJECT.
``(a) HEALTH CARE DELIVERY DEMONSTRATION PROJECTS.--The Secretary, acting through the Service and in consultation with Indian tribes and tribal organizations, may enter into funding agreements with, or make grants or loan guarantees to, Indian tribes or tribal organizations for the purpose of carrying out a health care delivery demonstration project to test alternative means of delivering health care and services through health facilities, including hospice, traditional Indian health and child care facilities, to Indians.
``(b) USE OF FUNDS.--The Secretary, in approving projects pursuant to this section, may authorize funding for the construction and renovation of hospitals, health centers, health stations, and other facilities to deliver health care services and is authorized to--
``(1) waive any leasing prohibition;
``(2) permit carryover of funds appropriated for the provision of health care services;
``(3) permit the use of other available funds;
``(4) permit the use of funds or property donated from any source for project purposes;
``(5) provide for the reversion of donated real or personal property to the donor; and
``(6) permit the use of Service funds to match other funds, including Federal funds.
``(c) CRITERIA.--
``(1) IN GENERAL.--The Secretary shall develop and publish regulations through rulemaking under section 802 for the review and approval of applications submitted under this section. The Secretary may enter into a contract, funding agreement or award a grant under this section for projects which meet the following criteria:
``(A) There is a need for a new facility or program or the reorientation of an existing facility or program.
``(B) A significant number of Indians, including those with low health status, will be served by the project.
``(C) The project has the potential to address the health needs of Indians in an innovative manner.
``(D) The project has the potential to deliver services in an efficient and effective manner.
``(E) The project is economically viable.
``(F) The Indian tribe or tribal organization has the administrative and financial capability to administer the project.
``(G) The project is integrated with providers of related health and social services and is coordinated with, and avoids duplication of, existing services.
``(2) PEER REVIEW PANELS.--The Secretary may provide for the establishment of peer review panels, as necessary, to review and evaluate applications and to advise the Secretary regarding such applications using the criteria developed pursuant to paragraph (1).
``(3) PRIORITY.--The Secretary shall give priority to applications for demonstration projects under this section in each of the following service units to the extent that such applications are filed in a timely manner and otherwise meet the criteria specified in paragraph (1):
``(A) Cass Lake, Minnesota.
``(B) Clinton, Oklahoma.
``(C) Harlem, Montana.
``(D) Mescalero, New Mexico.
``(E) Owyhee, Nevada.
``(F) Parker, Arizona.
``(G) Schurz, Nevada.
``(H) Winnebago, Nebraska.
``(I) Ft. Yuma, California
``(d) TECHNICAL ASSISTANCE.--The Secretary shall provide such technical and other assistance as may be necessary to enable applicants to comply with the provisions of this section.
``(e) SERVICE TO INELIGIBLE PERSONS.--The authority to provide services to persons otherwise ineligible for the health care benefits of the Service and the authority to extend hospital privileges in Service facilities to non-Service health care practitioners as provided in section 807 may be included, subject to the terms of such section, in any demonstration project approved pursuant to this section.
``(f) EQUITABLE TREATMENT.--For purposes of subsection (c)(1)(A), the Secretary shall, in evaluating facilities operated under any funding agreement entered into with the Service under the Indian Self-Determination and Education Assistance Act, use the same criteria that the Secretary uses in evaluating facilities operated directly by the Service.
(g) EQUITABLE INTEGRATION OF FACILITIES.--The Secretary shall ensure that the planning, design, construction, renovation and expansion needs of Service and non-Service facilities which are the subject of a funding agreement for health services entered into with the Service under the Indian Self-Determination and Education Assistance Act, are fully and equitably integrated into the implementation of the health care delivery demonstration projects under this section.
``SEC. 308. LAND TRANSFER.
``(a) GENERAL AUTHORITY FOR TRANSFERS.--Notwithstanding any other provision of law, the Bureau of Indian Affairs and all other agencies and departments of the United States are authorized to transfer, at no cost, land and improvements to the Service for the provision of health care services. The Secretary is authorized to accept such land and improvements for such purposes.
``(b) CHEMAWA INDIAN SCHOOL.--The Bureau of Indian Affairs is authorized to transfer, at no cost, up to 5 acres of land at the Chemawa Indian School, Salem, Oregon, to the Service for the provision of health care services. The land authorized to be transferred by this section is that land adjacent to land under the jurisdiction of the Service and occupied by the Chemawa Indian Health Center.
``SEC. 309. LEASES.
``(a) IN GENERAL.--Notwithstanding any other provision of law, the Secretary is authorized, in carrying out the purposes of this Act, to enter into leases with Indian tribes and tribal organizations for periods not in excess of 20 years. Property leased by the Secretary from an Indian tribe or tribal organization may be reconstructed or renovated by the Secretary pursuant to an agreement with such Indian tribe or tribal organization.
``(b) FACILITIES FOR THE ADMINISTRATION AND DELIVERY OF HEALTH SERVICES.--The Secretary may enter into leases, contracts, and other legal agreements with Indian tribes or tribal organizations which hold--
``(1) title to;
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