I 
119TH CONGRESS 
1ST SESSION H. R. 3266 
To authorize the Secretary of Health and Human Services to make loans 
and loan guarantees for planning, constructing, or renovating pediatric 
or adult mental health treatment facilities and pediatric or adult sub-
stance use disorder treatment facilities, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 8, 2025 
Ms. MCCLELLAN (for herself and Mr. BACON) 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 planning, con-
structing, or renovating pediatric or adult mental health 
treatment facilities and pediatric or adult substance use 
disorder treatment facilities, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Mental Health Infra-
structure Improvement Act of 2025’’. 
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SEC. 2. LOANS AND LOAN GUARANTEES. 
Part P of title III of the Public Health Service Act 
is amended by inserting after section 399V–7 of such Act 
(42 U.S.C. 280g–18) the following: 
‘‘SEC. 399V–8. LOANS AND LOAN GUARANTEES FOR PLAN-
NING, CONSTRUCTING, OR RENOVATING ELI-
GIBLE FACILITIES FOR PEDIATRIC OR ADULT 
MENTAL HEALTH AND SUBSTANCE USE DIS-
ORDER SERVICES. 
‘‘(a) IN GENERAL.—The Secretary may— 
‘‘(1) make loans and loan guarantees to eligible 
entities for the purpose of— 
‘‘(A) constructing or renovating, including 
planning the construction or renovation of, a 
pediatric or adult mental health treatment facil-
ity or a pediatric or adult substance use dis-
order treatment facility; 
‘‘(B) improving digital infrastructure, tele-
health capabilities, or other patient care infra-
structure at such a facility; or 
‘‘(C) adding, or converting beds to, adult 
or pediatric psychiatric and substance use inpa-
tient beds at such a facility; and 
‘‘(2) subject to subsection (e), make loans and 
loan guarantees for refinancing loans that were 
made for such purpose to an eligible entity. 
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‘‘(b) PREFERENCE.—In making loans and loan guar-
antees under this section, the Secretary shall give pref-
erence to eligible entities proposing to construct or ren-
ovate a pediatric or adult mental health treatment facility, 
or a pediatric or adult substance use disorder treatment 
facility, as determined by the Secretary, that will— 
‘‘(1) increase the number of pediatric or adult 
psychiatric beds or pediatric or adult substance use 
disorder beds in a county that has insufficient psy-
chiatric or substance use disorder treatment bed ca-
pacity; 
‘‘(2) provide mental health or substance use 
disorder 
services 
in 
a 
high-need 
rural 
or 
underresourced community; 
‘‘(3) provide multiple services across the con-
tinuum of mental health or substance use disorder 
care; or 
‘‘(4) have the capacity to provide integrated or 
specialized mental health and substance use disorder 
care for complex cases or patients with medical co- 
morbidities. 
‘‘(c) SET-ASIDE.—The Secretary shall allocate at 
least 25 percent of the funds under this section for any 
fiscal year for awards to construct or renovate facilities 
serving primarily pediatric and adolescent populations. 
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‘‘(d) TERMS
AND CONDITIONS.—Loans and loan 
guarantees under this section shall be made on such terms 
and conditions as the Secretary may prescribe, subject to 
the provisions of this section including the following: 
‘‘(1) The Secretary may allow credit to a pro-
spective borrower only where— 
‘‘(A) it is necessary to increase the number 
of psychiatric or substance use disorder treat-
ment facilities to enhance the public’s access to 
a comprehensive continuum of mental health 
and substance use disorder services; and 
‘‘(B) a credit subsidy is the most efficient 
way to achieve such increase (on a borrower-by- 
borrower basis). 
‘‘(2) The final maturity of loans made or guar-
anteed under this section shall not exceed a period 
of 20 years, or the period of 50 percent of the useful 
life of any physical asset to be financed by the loan, 
whichever is less as determined by the Secretary. 
‘‘(3) The Secretary may not make a loan guar-
antee under this section, with respect to any bor-
rower, in excess of 80 percent of any potential loss 
on the loan. 
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similar maturity to the loan being made or 
guaranteed; and 
‘‘(B) the minimum interest rate on the 
loan— 
‘‘(i) will be no less than the estimated 
cost to the Government of making the loan 
plus 1 percent, with the goal of keeping 
the interest rate below the interest rate of 
a comparable and competitive private sec-
tor benchmark financial instrument; and 
‘‘(ii) will be adjusted, as determined 
by the Secretary, every quarter to take ac-
count of changes in the interest rate of the 
benchmark financial instrument. 
‘‘(8) The Secretary may not make any loan or 
loan guarantee under this section unless— 
‘‘(A) fees or premiums on the loan or loan 
guarantee and corresponding insurance cov-
erage will be set at levels that minimize the cost 
to the Government (as defined in section 502(5) 
of the Federal Credit Reform Act of 1990) of 
insuring such loan or loan guarantee, while sup-
porting achievement of enhancing the public’s 
access to a comprehensive continuum of mental 
health and substance use disorder services, in-
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cluding increasing the number of inpatient psy-
chiatric and substance use disorder bed counts 
in areas with insufficient bed capacity; 
‘‘(B) the minimum guarantee fee or insur-
ance premium imposed by the Government will 
be no less than the level sufficient to cover all 
of the estimated costs to the Government of the 
expected default claims, plus one percent; and 
‘‘(C) loan guarantee fees imposed by the 
Government will be reviewed every six months 
to ensure that the fees imposed on new loan 
guarantees are at a level sufficient to satisfy 
subparagraph (B) based on the most recent es-
timates of such costs. 
‘‘(9) The provisions of any loan guarantee 
under this section shall state that the guarantee is 
conclusive evidence that— 
‘‘(A) the guarantee has been properly ob-
tained; 
‘‘(B) the underlying loan qualified for the 
guarantee; and 
‘‘(C) except in the case of fraud or mate-
rial misrepresentation by the holder of the loan, 
the guarantee will be presumed to be valid, 
legal, and enforceable. 
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‘‘(10) The Secretary may not make any loan or 
loan guarantee under this section unless— 
‘‘(A) the borrower finances at least 25 per-
cent of the funded project from other sources; 
and 
‘‘(B) the borrower uses funds that were 
not derived from Federal loans or loan guaran-
tees to pay the fees or premiums on the loan or 
loan guarantee under this section. 
‘‘(11) The Secretary— 
‘‘(A) shall prescribe explicit standards for 
use in periodically assessing the credit risk of 
new and existing direct loans and guaranteed 
loans; and 
‘‘(B) shall not make a loan or loan guar-
antee under this section unless the Secretary 
finds that there is a reasonable assurance of re-
payment. 
‘‘(e) LIMITATION ON REFINANCING.—The authority 
vested by subsection (a)(2)— 
‘‘(1) authorizes making loans and loan guaran-
tees only for refinancing loans that are entered into 
on or before the date that is 24 months before the 
date of enactment of the Mental Health Infrastruc-
ture Improvement Act of 2025; and 
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‘‘(2) terminates on the date that is 24 months 
after such date of enactment. 
‘‘(f) PAYMENT OF LOSSES.— 
‘‘(1) DEFAULT ON GUARANTEED LOANS.—If, as 
a result of a default by a borrower under a loan 
guaranteed under this section, after the holder 
thereof has made such further collection efforts and 
instituted such enforcement proceedings as the Sec-
retary may require, the Secretary determines that 
the holder has suffered a loss— 
‘‘(A) the Secretary shall pay to such holder 
75 percent of such loss, as specified in the 
guarantee contract; 
‘‘(B) upon making any such payment, the 
Secretary shall be subrogated to all the rights 
of the recipient of the payment; and 
‘‘(C) the Secretary shall be entitled to re-
cover from the borrower the amount of any pay-
ments made pursuant to the guarantee con-
tract. 
‘‘(2) 
REQUIRED
ENFORCE
OF
FEDERAL 
RIGHTS.—The Attorney General of the United 
States shall take such action as may be appropriate 
to enforce any right accruing to the United States 
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as a result of the issuance of any guarantee under 
this section. 
‘‘(3) FORBEARANCE.—Nothing in this section 
precludes any forbearance for the benefit of the bor-
rower of a loan that is made or guaranteed under 
this section which is agreed upon by the parties to 
the loan and approved by the Secretary, provided 
that budget authority for any resulting cost to the 
Government (as defined in section 502(5) of the 
Federal Credit Reform Act of 1990) is available. 
‘‘(g) DEFINITIONS.—In this section: 
‘‘(1) The term ‘children’s hospital’ means a 
hospital that predominantly serves patients under 
the age of 18. 
‘‘(2) The term ‘critical access hospital’ has the 
meaning given to such term in section 1861(mm) of 
the Social Security Act. 
‘‘(3) The term ‘eligible entity’ means public, 
private for-profit, and private not-for-profit— 
‘‘(A) hospitals including general acute hos-
pitals, psychiatric hospitals, critical access hos-
pitals, rural emergency hospitals, sole commu-
nity hospitals, children’s hospitals, and other 
hospitals as specified by the Secretary; 
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‘‘(B) substance use disorder treatment fa-
cilities; 
‘‘(C) mental health treatment facilities; 
‘‘(D) facilities that employ licensed mental 
health and substance use disorder professionals, 
such as child, adolescent, and adult psychia-
trists, child, adolescent, and adult psychologists, 
advanced practice registered nurses, social 
workers, licensed professional counselors, or 
other licensed professionals that provide mental 
health or substance use disorder services to pe-
diatric, adolescent, or adult patients; 
‘‘(E) alliances of hospitals or facilities list-
ed in any of subparagraphs (A) through (D); 
and 
‘‘(F) other facilities as determined by the 
Secretary. 
‘‘(4) The term ‘mental health treatment facil-
ity’— 
‘‘(A) includes— 
‘‘(i) a child, adolescent, or adult out-
patient facility that provides— 
‘‘(I) intensive outpatient services; 
‘‘(II) partial hospitalization serv-
ices; 
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‘‘(III) crisis intervention and sta-
bilization; or 
‘‘(IV) other mental, behavioral, 
or emotional health services deemed 
appropriate by the Secretary; 
‘‘(ii) a hospital (including a general 
acute hospital, a psychiatric hospital, a 
critical access hospital, a rural emergency 
hospital, a sole community hospital, a chil-
dren’s hospital, or other type of hospital as 
specified by the Secretary) that— 
‘‘(I) provides acute, short-term 
inpatient psychiatric treatment serv-
ices or outpatient services; and 
‘‘(II) may include a military serv-
ices program to meet the needs of ac-
tive 
and 
retired 
military 
servicemembers; and 
‘‘(iii) a facility within or near an 
emergency department for providing dis-
charge planning and instructions to emer-
gency department patients in need of men-
tal health or substance use disorder treat-
ment and transfer to an appropriate men-
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tal health or substance use disorder treat-
ment care setting; and 
‘‘(B) excludes a facility that provides long- 
term inpatient care. 
‘‘(5) The term ‘psychiatric hospital’ has the 
meaning given to such term in section 1861(f) of the 
Social Security Act. 
‘‘(6) The term ‘rural emergency hospital’ has 
the meaning given to such term in section 
1861(kkk) of the Social Security Act. 
‘‘(7) The term ‘sole community hospital’ has 
the meaning given to such term in section 
1886(d)(5)(D)(iii) of the Social Security Act. 
‘‘(8) The term ‘substance use disorder treat-
ment facility’— 
‘‘(A) includes— 
‘‘(i) a child, adolescent, or adult out-
patient facility that provides outpatient 
substance use disorder services; and 
‘‘(ii) a hospital (including a general 
acute hospital, a psychiatric hospital, a 
critical access hospital, a rural emergency 
hospital, a sole community hospital, a chil-
dren’s hospital, or other type of hospital as 
specified by the Secretary) that— 
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‘‘(I) provides acute, short-term 
inpatient substance use disorder treat-
ment services or outpatient services; 
and 
‘‘(II) may include a military serv-
ices program to meet the needs of ac-
tive 
and 
retired 
military 
servicemembers; and 
‘‘(B) excludes any facility described in 
paragraph (4)(B). 
‘‘(h) FUNDING LIMITATIONS.—The Secretary may 
provide loans and loan guarantees under this section— 
‘‘(1) only to the extent or in the amounts pro-
vided in advance in appropriation Acts; and 
‘‘(2) totaling not more than $200,000,000 for 
each of fiscal years 2026 through 2030.’’. 
SEC. 3. MENTAL HEALTH AND SUBSTANCE USE TREAT-
MENT TRUST FUND. 
(a) ESTABLISHMENT.—There is established in the 
Treasury of the United States a trust fund to be known 
as the Mental Health and Substance Use Treatment Trust 
Fund (in this section referred to as the ‘‘Trust Fund’’). 
(b) DEPOSITS.—There are hereby authorized to be 
appropriated to the Trust Fund, to remain available until 
expended, amounts equivalent to any revenues from the 
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program of loans and loan guarantees under section 
399V–8 of the Public Health Service Act, as added by sec-
tion 2, that exceed the costs of carrying out such program. 
(c) USE OF FUND.—Amounts in the Trust Fund 
shall be available, as provided by appropriation Acts, for 
block grants for community mental health services under 
subpart I of part B of title XIX of the Public Health Serv-
ice Act (42 U.S.C. 300x et seq.). 
Æ 
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