I 

115TH CONGRESS 

1ST SESSION H. R. 1253 

To authorize the Secretary of Health and Human Services to make loans 

and loan guarantees for constructing or renovating, or planning construction or renovation of, qualified psychiatric and substance abuse treatment 

facilities, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 28, 2017 

Mr. KILMER (for himself, Ms. HERRERA BEUTLER, Mr. MURPHY of Pennsylvania, and Ms. EDDIE BERNICE JOHNSON of Texas) introduced the following bill; which was referred to the Committee on Energy and Commerce 

A BILL 

To authorize the Secretary of Health and Human Services 

to make loans and loan guarantees for constructing or 

renovating, or planning construction or renovation of, 

qualified psychiatric and substance abuse treatment facilities, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Mental Health and 

5 Substance Abuse Treatment Accessibility Act of 2017’’. 


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1 SEC. 2. LOANS AND LOAN GUARANTEES. 

2 Part P of title III of the Public Health Service Act 

3 is amended by inserting after section 399V–6 of such Act 

4 (42 U.S.C. 280g–17) the following: 

5 ‘‘SEC. 399V–7. LOANS AND LOAN GUARANTEES FOR CON6 STRUCTING OR RENOVATING, OR PLANNING 

7 CONSTRUCTION OR RENOVATION OF, CER8 TAIN QUALIFIED PSYCHIATRIC AND SUB9 STANCE ABUSE TREATMENT FACILITIES. 

10 ‘‘(a) IN GENERAL.—The Secretary may— 

11 ‘‘(1) make loans and loan guarantees for the 

12 purpose of constructing or renovating, including 

13 planning the construction or renovation of, a quali14 fied psychiatric treatment facility or a qualified sub15 stance abuse treatment facility to public, private for16 profit, or private not-for-profit— 

17 ‘‘(A) psychiatric treatment facilities; 

18 ‘‘(B) substance abuse treatment facilities; 

19 ‘‘(C) psychiatric hospitals; and 

20 ‘‘(D) alliances of such facilities or hos21 pitals; and 

22 ‘‘(2) subject to subsection (d), make loans and 

23 loan guarantees for refinancing loans that were 

24 made for such purpose to an entity listed in para25 graph (1). 


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1 ‘‘(b) PREFERENCE.—In making loans and loan guar2 antees under this section, the Secretary shall give pref3 erence to psychiatric treatment facilities and substance 

4 abuse treatment facilities that propose to construct or ren5 ovate a qualified psychiatric treatment facility or qualified 

6 substance abuse treatment facility in a county that has 

7 insufficient inpatient psychiatric or substance abuse treat8 ment capacity. 

9 ‘‘(c) TERMS AND CONDITIONS.—Loans and loan 

10 guarantees under this section shall be made on such terms 

11 and conditions as the Secretary may prescribe, subject to 

12 the provisions of this section including the following: 

13 ‘‘(1) The Secretary may allow credit to a pro14 spective borrower only where— 

15 ‘‘(A) it is necessary to increase the number 

16 of psychiatric or substance use disorder treat17 ment beds to enhance the public’s access to 

18 acute inpatient mental health and substance 

19 abuse services; and 

20 ‘‘(B) a credit subsidy is the most efficient 

21 way to achieve such increase (on a borrower-by22 borrower basis). 

23 ‘‘(2) The final maturity of loans made or guar24 anteed under this section shall not exceed a period 

25 of 20 years, or the period of 50 percent of the useful 


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1 life of any physical asset to be financed by the loan, 

2 whichever is less as determined by the Secretary. 

3 ‘‘(3) The Secretary may not make a loan guar4 antee under this section, with respect to any bor5 rower, in excess of 80 percent of any potential loss 

6 on the loan. 

7 ‘‘(4) The Secretary may not make any loan or 

8 loan guarantee under this section if the loan will be 

9 subordinated— 

10 ‘‘(A) to another debt contracted by the 

11 borrower; or 

12 ‘‘(B) to any other claims against the bor13 rower in the case of default. 

14 ‘‘(5) The Secretary may not make any loan 

15 guarantee under this section unless the Secretary 

16 determines that— 

17 ‘‘(A) the lender is responsible; and 

18 ‘‘(B) adequate provision is made for serv19 icing the loan on reasonable terms and pro20 tecting the financial interest of the United 

21 States. 

22 ‘‘(6) The Secretary may not make any loan 

23 guarantee under this section if the income from the 

24 loan will be excluded from gross income for purposes 

25 of chapter 1 of the Internal Revenue Code of 1986. 


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1 ‘‘(7) The Secretary may not make any loan or 

2 loan guarantee under this section unless— 

3 ‘‘(A) the loan and interest supplements on 

4 any loan guarantee will be at an interest rate 

5 that is set by reference to a benchmark interest 

6 rate on marketable Treasury securities with a 

7 similar maturity to the loan being made or 

8 guaranteed; and 

9 ‘‘(B) the minimum interest rate on the 

10 loan— 

11 ‘‘(i) will be no less than the estimated 

12 cost to the Government of making the loan 

13 plus 1 percent, with the goal of keeping 

14 the interest rate below the interest rate of 

15 a comparable and competitive private sec16 tor benchmark financial instrument; and 

17 ‘‘(ii) will be adjusted, as determined 

18 by the Secretary, every quarter to take ac19 count of changes in the interest rate of the 

20 benchmark financial instrument. 

21 ‘‘(8) The Secretary may not make any loan or 

22 loan guarantee under this section unless— 

23 ‘‘(A) fees or premiums on the loan or loan 

24 guarantee and corresponding insurance cov25 erage will be set at levels that minimize the cost 


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1 to the Government (as defined in section 502(5) 

2 of the Federal Credit Reform Act of 1990) of 

3 insuring such loan or loan guarantee, while sup4 porting achievement of increasing the inpatient 

5 psychiatric and substance abuse bed count, as 

6 applicable, to enhance the public’s access to 

7 acute inpatient mental health and substance 

8 abuse services; 

9 ‘‘(B) the minimum guarantee fee or insur10 ance premium imposed by the Government will 

11 be no less than the level sufficient to cover all 

12 of the estimated costs to the Government of the 

13 expected default claims, plus one percent; and 

14 ‘‘(C) loan guarantee fees imposed by the 

15 Government will be reviewed every six months 

16 to ensure that the fees imposed on new loan 

17 guarantees are at a level sufficient to satisfy 

18 subparagraph (B) based on the most recent es19 timates of such costs. 

20 ‘‘(9) The provisions of any loan guarantee 

21 under this section shall state that the guarantee is 

22 conclusive evidence that— 

23 ‘‘(A) the guarantee has been properly ob24 tained; 


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1 ‘‘(B) the underlying loan qualified for the 

2 guarantee; and 

3 ‘‘(C) except in the case of fraud or mate4 rial misrepresentation by the holder of the loan, 

5 the guarantee will be presumed to be valid, 

6 legal, and enforceable. 

7 ‘‘(10) The Secretary may not make any loan or 

8 loan guarantee under this section unless— 

9 ‘‘(A) the borrower finances at least 25 per10 cent of the funded project from other sources; 

11 and 

12 ‘‘(B) the borrower uses funds that were 

13 not derived from Federal loans or loan guaran14 tees to pay the fees or premiums on the loan or 

15 loan guarantee under this section. 

16 ‘‘(11) The Secretary— 

17 ‘‘(A) shall prescribe explicit standards for 

18 use in periodically assessing the credit risk of 

19 new and existing direct loans and guaranteed 

20 loans; and 

21 ‘‘(B) shall not make a loan or loan guar22 antee under this section unless the Secretary 

23 finds that there is a reasonable assurance of re24 payment. 


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1 ‘‘(d) LIMITATION ON REFINANCING.—The authority 

2 vested by subsection (a)(2)— 

3 ‘‘(1) authorizes making loans and loan guaran4 tees only for refinancing loans that were entered into 

5 on or before the date that is 24 months before the 

6 date of enactment of the Mental Health and Sub7 stance Abuse Treatment Accessibility Act of 2017; 

8 and 

9 ‘‘(2) terminates on the date that is 24 months 

10 after such date of enactment. 

11 ‘‘(e) PAYMENT OF LOSSES.— 

12 ‘‘(1) DEFAULT ON GUARANTEED LOANS.—If, as 

13 a result of a default by a borrower under a loan 

14 guaranteed under this section, after the holder 

15 thereof has made such further collection efforts and 

16 instituted such enforcement proceedings as the Sec17 retary may require, the Secretary determines that 

18 the holder has suffered a loss— 

19 ‘‘(A) the Secretary shall pay to such holder 

20 75 percent of such loss, as specified in the 

21 guarantee contract; 

22 ‘‘(B) upon making any such payment, the 

23 Secretary shall be subrogated to all the rights 

24 of the recipient of the payment; and 


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1 ‘‘(C) the Secretary shall be entitled to re2 cover from the borrower the amount of any pay3 ments made pursuant to the guarantee con4 tract. 

5 ‘‘(2) REQUIRED ENFORCE OF FEDERAL

6 RIGHTS.—The Attorney General of the United 

7 States shall take such action as may be appropriate 

8 to enforce any right accruing to the United States 

9 as a result of the issuance of any guarantee under 

10 this section. 

11 ‘‘(3) FORBEARANCE.—Nothing in this section 

12 precludes any forbearance for the benefit of the bor13 rower of a loan that is made or guaranteed under 

14 this section which is agreed upon by the parties to 

15 the loan and approved by the Secretary, provided 

16 that budget authority for any resulting cost to the 

17 Government (as defined in section 502(5) of the 

18 Federal Credit Reform Act of 1990) is available. 

19 ‘‘(f) DEFINITIONS.—In this section: 

20 ‘‘(1) The term ‘qualified psychiatric treatment 

21 facility’— 

22 ‘‘(A) means a psychiatric hospital (or other 

23 qualified treatment facility, as determined ap24 propriate by the Secretary) that is able to serve 

25 patients ages 21 and older that— 


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1 ‘‘(i) will provide acute, short-term in2 patient psychiatric treatment services for 

3 such patients; 

4 ‘‘(ii) will provide outpatient services; 

5 and 

6 ‘‘(iii) may include a military services 

7 program to meet the needs of active and 

8 retired military servicemembers; and 

9 ‘‘(B) excludes a facility that— 

10 ‘‘(i) provides long-term inpatient care; 

11 ‘‘(ii) is a health center (as defined in 

12 section 330); and 

13 ‘‘(iii) is part of or affiliated with a 

14 prison (as defined in section 2246 of title 

15 18, United States Code). 

16 ‘‘(2) The term ‘qualified substance abuse treat17 ment facility’— 

18 ‘‘(A) means a psychiatric hospital (or other 

19 qualified treatment facility, as determined ap20 propriate by the Secretary) that is able to serve 

21 patients ages 21 and older that— 

22 ‘‘(i) will provide acute, short-term in23 patient substance abuse treatment services 

24 for such patients; 


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1 ‘‘(ii) will provide outpatient services; 

2 and 

3 ‘‘(iii) may include a military services 

4 program to meet the needs of active and 

5 retired military servicemembers; and 

6 ‘‘(B) excludes any facility described in 

7 paragraph (1)(B). 

8 ‘‘(3) The term ‘psychiatric hospital’ means— 

9 ‘‘(A) an institution that— 

10 ‘‘(i) is primarily engaged in providing, 

11 by or under the supervision of one or more 

12 physicians, psychiatric services for the di13 agnosis and treatment of mentally ill per14 sons or those suffering from substance 

15 abuse disorders; 

16 ‘‘(ii) satisfies the requirements of 

17 paragraphs (3) through (9) of subsection 

18 (e) of section 1861 of the Social Security 

19 Act; 

20 ‘‘(iii) maintains clinical records on all 

21 patients and maintains such records as the 

22 Secretary finds to be necessary to deter23 mine the degree and intensity of the treat24 ment provided to individuals entitled to 


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1 hospital insurance benefits under part A of 

2 title XVIII of the Social Security Act; and 

3 ‘‘(iv) meets such staffing requirements 

4 as the Secretary finds necessary for the in5 stitution to carry out an active program of 

6 treatment for individuals who are fur7 nished services in the institution; or 

8 ‘‘(B) a distinct part of an institution that 

9 satisfies clauses (i) and (ii) of subparagraph 

10 (A) if such distinct part satisfies clauses (iii) 

11 and (iv) of subparagraph (A). 

12 ‘‘(g) FUNDING LIMITATIONS.—The Secretary may 

13 provide loans and loan guarantees under this section— 

14 ‘‘(1) only to the extent or in the amounts pro15 vided in advance in appropriation Acts; and 

16 ‘‘(2) totaling not more than $200,000,000 in 

17 each of fiscal years 2018 through 2022.’’. 

18 SEC. 3. MENTAL HEALTH AND SUBSTANCE USE TREAT19 MENT TRUST FUND. 

20 (a) ESTABLISHMENT.—There is established in the 

21 Treasury of the United States a trust fund to be known 

22 as the Mental Health and Substance Use Treatment Trust 

23 Fund (in this section referred to as the ‘‘Trust Fund’’). 

24 (b) DEPOSITS.—There are hereby authorized to be 

25 appropriated to the Trust Fund, to remain available until 


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1 expended, amounts equivalent to any revenues from the 

2 program of loans and loan guarantees under section 

3 399V–7 of the Public Health Service Act, as added by sec4 tion 2, that exceed the costs of carrying out such program. 

5 (c) USE OF FUND.—Amounts in the Trust Fund 

6 shall be available, as provided by appropriation Acts, for 

7 block grants for community mental health services under 

8 subpart I of part B of title XIX of the Public Health Serv9 ice Act (42 U.S.C. 300x et seq.). 

10 SEC. 4. SENSE OF CONGRESS. 

11 It is the sense of Congress that reversing the Federal 

12 policy of denying Federal financial participation under the 

13 Medicaid program for care and services for patients in an 

14 institution for mental diseases is critically important to 

15 improving access to mental health care services and treat16 ment. 

Æ 


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