Mental Health and Substance Abuse Treatment Accessibility Act of 2016

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Mental Health and Substance Abuse 
Treatment Accessibility Act of 2016''.

SEC. 2. LOANS AND LOAN GUARANTEES.

    Part P of title III of the Public Health Service Act is amended by 
inserting after section 399V-6 of such Act (21 U.S.C. 355f) the 
following:

``SEC. 399V-7. LOANS AND LOAN GUARANTEES FOR CONSTRUCTING OR 
              RENOVATING, OR PLANNING CONSTRUCTION OR RENOVATION OF, 
              CERTAIN QUALIFIED PSYCHIATRIC AND SUBSTANCE ABUSE 
              TREATMENT FACILITIES.

    ``(a) In General.--The Secretary may make loans and loan guarantees 
for constructing or renovating, including planning the construction or 
renovation of, a qualified psychiatric treatment facility or a 
qualified substance abuse treatment facility to public, private for-
profit, or private not-for-profit--
            ``(1) psychiatric treatment facilities;
            ``(2) substance abuse treatment facilities;
            ``(3) psychiatric hospitals; and
            ``(4) alliances of such facilities or hospitals.
    ``(b) Preference.--In making loans and loan guarantees under this 
section, the Secretary shall give preference to psychiatric treatment 
facilities and substance abuse treatment facilities that propose to 
construct or renovate a qualified psychiatric treatment facility or 
qualified substance abuse treatment facility in a county that has 
insufficient inpatient psychiatric or substance abuse treatment 
capacity.
    ``(c) 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 prospective 
        borrower only where--
                    ``(A) it is necessary to increase the number of 
                psychiatric or substance use disorder treatment beds to 
                enhance the public's access to acute inpatient mental 
                health and substance abuse 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 guaranteed 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 guarantee under 
        this section, with respect to any borrower, in excess of 80 
        percent of any potential loss on the loan.
            ``(4) The Secretary may not make any loan or loan guarantee 
        under this section if the loan will be subordinated--
                    ``(A) to another debt contracted by the borrower; 
                or
                    ``(B) to any other claims against the borrower in 
                the case of default.
            ``(5) The Secretary may not make any loan guarantee under 
        this section unless the Secretary determines that--
                    ``(A) the lender is responsible; and
                    ``(B) adequate provision is made for servicing the 
                loan on reasonable terms and protecting the financial 
                interest of the United States.
            ``(6) The Secretary may not make any loan guarantee under 
        this section if the income from the loan will be excluded from 
        gross income for purposes of chapter 1 of the Internal Revenue 
        Code of 1986.
            ``(7) The Secretary may not make any loan or loan guarantee 
        under this section unless--
                    ``(A) the loan and interest supplements on any loan 
                guarantee will be at an interest rate that is set by 
                reference to a benchmark interest rate on marketable 
                Treasury securities with a 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 sector 
                        benchmark financial instrument; and
                            ``(ii) will be adjusted, as determined by 
                        the Secretary, every quarter to take account 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 coverage 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 supporting achievement of increasing 
                the inpatient psychiatric and substance abuse bed 
                count, as applicable, to enhance the public's access to 
                acute inpatient mental health and substance abuse 
                services;
                    ``(B) the minimum guarantee fee or insurance 
                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 estimates 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 obtained;
                    ``(B) the underlying loan qualified for the 
                guarantee; and
                    ``(C) except in the case of fraud or material 
                misrepresentation by the holder of the loan, the 
                guarantee will be presumed to be valid, legal, and 
                enforceable.
            ``(10) The Secretary may not make any loan or loan 
        guarantee under this section unless--
                    ``(A) the borrower finances at least 25 percent of 
                the funded project from other sources; and
                    ``(B) the borrower uses funds that were not derived 
                from Federal loans or loan guarantees 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 guarantee under 
                this section unless the Secretary finds that there is a 
                reasonable assurance of repayment.
    ``(d) 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 Secretary 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 recover 
                from the borrower the amount of any payments made 
                pursuant to the guarantee contract.
            ``(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 
        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 borrower 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.
    ``(e) Definitions.--In this section:
            ``(1) The term `qualified psychiatric treatment facility'--
                    ``(A) means a psychiatric hospital (or other 
                qualified treatment facility, as determined appropriate 
                by the Secretary) that is able to serve patients ages 
                21 and older that--
                            ``(i) will provide acute, short-term 
                        inpatient psychiatric treatment services for 
                        such patients;
                            ``(ii) will provide outpatient services; 
                        and
                            ``(iii) may include a military services 
                        program to meet the needs of active and retired 
                        military service members; and
                    ``(B) excludes a facility that--
                            ``(i) provides long-term inpatient care;
                            ``(ii) is a health center (as defined in 
                        section 330); and
                            ``(iii) is part of or affiliated with a 
                        prison (as defined in section 2246 of title 18, 
                        United States Code).
            ``(2) The term `qualified substance abuse treatment 
        facility'--
                    ``(A) means a psychiatric hospital (or other 
                qualified treatment facility, as determined appropriate 
                by the Secretary) that is able to serve patients ages 
                21 and older that--
                            ``(i) will provide acute, short-term 
                        inpatient substance abuse treatment services 
                        for such patients;
                            ``(ii) will provide outpatient services; 
                        and
                            ``(iii) may include a military services 
                        program to meet the needs of active and retired 
                        military service members; and
                    ``(B) excludes any facility described in paragraph 
                (1)(B).
            ``(3) The term `psychiatric hospital' means--
                    ``(A) an institution that--
                            ``(i) is primarily engaged in providing, by 
                        or under the supervision of one or more 
                        physicians, psychiatric services for the 
                        diagnosis and treatment of mentally ill persons 
                        or those suffering from substance abuse 
                        disorders;
                            ``(ii) satisfies the requirements of 
                        paragraphs (3) through (9) of subsection (e) of 
                        section 1861 of the Social Security Act;
                            ``(iii) maintains clinical records on all 
                        patients and maintains such records as the 
                        Secretary finds to be necessary to determine 
                        the degree and intensity of the treatment 
                        provided to individuals entitled to hospital 
                        insurance benefits under part A of title XVIII 
                        of the Social Security Act; and
                            ``(iv) meets such staffing requirements as 
                        the Secretary finds necessary for the 
                        institution to carry out an active program of 
                        treatment for individuals who are furnished 
                        services in the institution; or
                    ``(B) a distinct part of an institution that 
                satisfies clauses (i) and (ii) of subparagraph (A) if 
                such distinct part satisfies clauses (iii) and (iv) of 
                subparagraph (A).
    ``(f) Funding Limitations.--The Secretary may provide loans and 
loan guarantees under this section--
            ``(1) only to the extent or in the amounts provided in 
        advance in appropriation Acts; and
            ``(2) totaling not more than $200,000,000 in each of fiscal 
        years 2018 through 2022.''.

SEC. 3. MENTAL HEALTH AND SUBSTANCE USE TREATMENT 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 program of loans and loan guarantees under 
section 399V-7 of the Public Health Service Act, as added by section 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 Service Act (42 U.S.C. 300x et seq.).

SEC. 4. SENSE OF CONGRESS.

    It is the sense of Congress that reversing the Federal policy of 
denying Federal financial participation under the Medicaid program for 
care and services for patients in an institution for mental diseases is 
critically important to improving access to mental health care services 
and treatment.

Summary: Mental Health and Substance Abuse Treatment Accessibility Act of 2016 This bill amends the Public Health Service Act to permit the Department of Health and Human Services to make loans and loan guarantees for construction or renovation of psychiatric or substance abuse treatment facilities. The bill establishes terms and conditions for these loans and loan guarantees. The bill establishes the Mental Health and Substance Use Treatment Trust Fund. Revenues from the loans and loan guarantees that exceed the cost of carrying out the program may be appropriated to the fund. Amounts in the fund are available for block grants for community mental health services.