; (2) a demonstration that the department has, on the date on which the application is submitted, a facility operating that is located in a rural area; and (3) a demonstration that, on the date on which the application is submitted, the department— (A) has a nursing staff and medical equipment; and (B) agrees to use such staff and equipment towards providing the services and carrying out the activities under this section. (d) Grants (1) Annual awards The funds awarded through a grant under this section to a rural health department shall be awarded on an annual basis for each of 5 years. (2) Maximum amounts The funds awarded through a grant under this section to a rural health department shall be in an amount that for a year does not exceed $500,000. (3) Considerations The Secretary shall determine the amount awarded to a rural health department through a grant under this section for a year in accordance with the following: (A) For the first year of the award, the amount shall be based on the amount the rural health department estimates for the cost of equipment and staffing needed to set up the activities and services supported under this section, as specified in the application under subsection (c). (B) For the second through fifth years of the award, the amount shall be based on the number of patients treated, and the type of treatment provided, by the department in the prior year. (e) Use of funds (1) In general A rural health department receiving a grant under this section shall use the funds awarded through the grant to provide the services and carry out the activities described in subsection (b) at a facility that is located in a rural area, including by— (A) obtaining additional medical equipment and resources necessary for providing the services and activities described in subsection (b), such as laboratories, x-ray machines, and cardiac monitors