Building Capacity for Care Act
The Building Capacity for Care Act would authorize the Secretary of Health and Human Services to provide loans, loan guarantees, and grants to eligible entities to expand and improve pediatric and adult mental health treatment facilities and pediatric/adult substance use disorder (SUD) treatment facilities. Eligible activities include purchasing, constructing, renovating, or planning facilities; upgrading digital infrastructure and telehealth capabilities; and adding or converting inpatient beds. The bill targets increases in capacity in high-need areas, especially where there are shortages of psychiatric and SUD beds or high overdose/suicide rates. It also creates a dedicated funding mechanism and a trust fund to support broader community mental health services. The act places detailed requirements on who may receive support, how projects are selected (including geographic preferences), and the terms of financial assistance (maturity, guarantees, matching funds, fees, and risk controls). It also establishes a Mental Health and Substance Use Treatment Trust Fund to capture revenues generated by the program that exceed its costs, with those funds available for block grants to community mental health services in the future. Introduced in the 119th Congress on March 18, 2025 by Representatives Salinas and Balint, the bill sets annual funding ceilings and a sunset-related limitation on refinancing, and it defines a wide set of terms to clarify what counts as eligible facilities and services.
Key Points
- 1Establishes a new program (Sec. 399V-8) under the Public Health Service Act to provide loans, loan guarantees, and grants for purchasing, constructing, renovating, planning, or upgrading pediatric/adult mental health treatment facilities and pediatric/adult SUD treatment facilities, including facility bed expansion and digital/telehealth improvements.
- 2Eligible recipients include public, private for-profit, and private not-for-profit hospitals and facilities that provide mental health or SUD services, or employ licensed mental health and SUD professionals; with preference for alliances and facilities that expand capacity in underserved areas or high-need rural communities and that offer integrated or specialized care.
- 3Geographic preferences favor locations in mental health professional shortage areas or counties with overdose death rates or suicide rates above national averages (based on CDC data), within the last three years for which data are available.
- 4Funding and costs: up to $200 million per fiscal year for loans and loan guarantees and up to $200 million per fiscal year for grants, for fiscal years 2025–2029 (subject to appropriations). The program requires non-Federal matching funds (at least 25% of the funded project) and imposes specific risk, fee, and subsidy rules to manage costs to the government.
- 5Terms and conditions: maximum loan/maturity of 20 years (or 50% of the asset life, whichever is less); government guarantees capped at 80% of potential loss; no subordinated debt; standards for credit risk and repayment; minimum loan guarantee fees designed to cover expected default costs plus a 1% cushion; borrower must finance at least 25% from non-Federal sources and pay fees from non-Federal funds; refinancing is limited to pre-enactment loans and expires 24 months after enactment of a related act.
- 6Loss payments and enforcement: if a guaranteed loan defaults, the Treasury would pay up to 75% of losses to the lender, with the government subrogating to the lender’s rights and recovering amounts from the borrower; the Attorney General would enforce federal rights; forbearance is allowed with budget authority.
- 7Creation of a Mental Health and Substance Use Treatment Trust Fund to hold any program revenues that exceed costs, with those funds available for future block grants to community mental health services under existing public health program authorities.
- 8Definitions included to clarify qualified facilities (e.g., children's hospitals, psychiatric hospitals, rural emergency hospitals, SUD facilities) and to set boundaries on what counts as mental health or SUD treatment facilities.