Title 42 — The Public Health and WelfareRelease 119-73
§238l Recovery
Title 42 › Chapter CHAPTER 6A— - PUBLIC HEALTH SERVICE › Subchapter SUBCHAPTER I— - ADMINISTRATION AND MISCELLANEOUS PROVISIONS › Part Part B— - Miscellaneous Provisions › § 238l
Summary
The United States can require repayment if, within 20 years after a facility’s remodeling, construction, expansion, or acquisition that was paid for under the old Community Mental Health Centers Act, the facility is sold or transferred to an entity that would not have qualified to apply under section 222 as it existed before October 1, 1981, or is disapproved as a transferee by the State mental health agency or by another entity designated by the State’s chief executive officer, or if the facility stops being used by a community mental health center to provide comprehensive mental health services. The transferor and transferee, or the owner if use changes, must give the Secretary written notice within 10 days after the sale, transfer, or cessation of use, or within 30 days after October 22, 1985, whichever is later. The United States can recover a base amount equal to the current value of the part of the facility that was an approved project multiplied by the share of the original project cost paid by the Federal government. The United States may also recover interest for a period that begins 191 days after the event if the required notice was given, or 11 days after the event if not. The Secretary sets the interest rate using the average bond‑equivalent rates of ninety‑one‑day Treasury bills auctioned during that period. The Secretary may waive recovery for good cause under regulations. Recovery rights are not a lien on the facility before a court gives judgment.
Full Legal Text
Title 42, §238l
The Public Health and Welfare — Source: USLM XML via OLRC
(a)If any facility with respect to which funds have been paid under the Community Mental Health Centers Act [42 U.S.C. 2689 et seq.] (as such Act was in effect prior to October 1, 1981) is, at any time within twenty years after the completion of remodeling, construction, or expansion or after the date of its acquisition—
(1)sold or transferred to any entity (A) which would not have been qualified to file an application under section 222 of such Act [42 U.S.C. 2689j] (as such section was in effect prior to October 1, 1981) or (B) which is disapproved as a transferee by the State mental health agency or by another entity designated by the chief executive officer of the State, or
(2)ceases to be used by a community mental health center in the provision of comprehensive mental health services,
(b)The transferor and transferee of a facility that is sold or transferred as described in subsection (a)(1), or the owner of a facility the use of which changes as described in subsection (a)(2), shall provide the Secretary written notice of such sale, transfer, or change within 10 days after the date on which such sale, transfer, or cessation of use occurs or within 30 days after October 22, 1985, whichever is later.
(c)(1)The base amount that the United States is entitled to recover under subsection (a) is the amount bearing the same ratio to the then value (as determined by the agreement of the parties or in an action brought in the district court of the United States for the district in which the facility is situated) of so much of the facility as constituted an approved project or projects as the amount of the Federal participation bore to the cost of the remodeling, construction, expansion, or acquisition of the project or projects.
(2)(A)The interest that the United States is entitled to recover under subsection (a) is the interest for the period (if any) described in subparagraph (B) at a rate (determined by the Secretary) based on the average of the bond equivalent rates of ninety-one-day Treasury bills auctioned during that period.
(B)The period referred to in subparagraph (A) is the period beginning—
(i)if notice is provided as prescribed by subsection (b), 191 days after the date on which such sale, transfer, or cessation of use occurs, or
(ii)if notice is not provided as prescribed by subsection (b), 11 days after such sale, transfer, or cessation of use occurs,
(d)The Secretary may waive the recovery rights of the United States under subsection (a) with respect to a facility (under such conditions as the Secretary may establish by regulation) if the Secretary determines that there is good cause for waiving such rights.
(e)The right of recovery of the United States under subsection (a) shall not, prior to judgment, constitute a lien on any facility.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
References in Text
The Community Mental Health Centers Act, referred to in subsec. (a), is title II of Pub. L. 88–164, as added by Pub. L. 94–63, title III, § 303, July 29, 1975, 89 Stat. 309, and amended, which was classified principally to subchapter III (§ 2689 et seq.) of chapter 33 of this title prior to its repeal by Pub. L. 97–35, title IX, § 902(e)(2)(B), Aug. 13, 1981, 95 Stat. 560. section 222 of the Community Mental Health Centers Act was classified to section 2689j of this title prior to its repeal. Codification Section was classified to section 300aaa–12 of this title prior to renumbering by Pub. L. 103–43, to section 300cc–14 of this title prior to renumbering by Pub. L. 100–607, to section 300aa–14 of this title prior to renumbering by Pub. L. 99–660, to section 229d of this title prior to renumbering by Pub. L. 98–24, and to section 2689m of this title prior to renumbering by Pub. L. 97–35.
Amendments
1991—Subsec. (d). Pub. L. 102–229 and Pub. L. 102–239 amended subsec. (d) identically, substituting “subsection (a)” for “subsection (a)(2)”. 1985—Pub. L. 99–129 amended section generally. Prior to amendment, section read as follows: “If any facility of a community mental health center acquired, remodeled, constructed, or expanded with funds provided under the Community Mental Health Centers Act is, at any time within twenty years after the completion of such remodeling,
Construction
, or expansion or after the date of its acquisition with such funds— “(1) sold or transferred to any person or entity (A) which is not qualified to file an application under section 222 of the Community Mental Health Centers Act, or (B) which is not approved as a transferee by the State agency of the State in which such facility is located, or its successor; or “(2) not used by a community mental health center in the provision of comprehensive mental health services, and the Secretary has not determined that there is good cause for termination of such use, the United States shall be entitled to recover from either the transferor or the transferee in the case of a sale or transfer or from the owner in the case of termination of use an amount bearing the same ratio to the then value (as determined by the agreement of the parties or by action brought in the United States district court for the district in which the center is situated) of so much of such facility or center as constituted an approved project or projects, as the amount of the Federal participation bore to the acquisition, remodeling,
Construction
, or expansion cost of such project or projects. Such right of recovery shall not constitute a lien upon such facility or center prior to judgment.” 1981—Pub. L. 97–35 substituted “the Community Mental Health Centers Act” for “this subchapter” and “section 222 of the Community Mental Health Centers Act” for “section 2689j of this title”. 1978—Pub. L. 95–622 substituted “this subchapter” for “this part”.
Statutory Notes and Related Subsidiaries
Effective Date
of 1985 Amendment Pub. L. 99–129, title II, § 226(b), Oct. 22, 1985, 99 Stat. 547, provided that: “In the case of any facility that was or is constructed, remodeled, expanded, or acquired on or before the date of enactment of this Act [Oct. 22, 1985] or within 180 days after the date of enactment of this Act, the period described in clause (i) or (ii), as the case may be, of section 2115(c)(2)(B) [now 243(c)(2)(B)] of the Public Health Service Act [42 U.S.C. 238l(c)(2)(B)(i), (ii)] (as amended by subsection (a) of this section) shall begin no earlier than 181 days after the date of enactment of this Act.”
Effective Date
of 1981 Amendment Pub. L. 97–35, title IX, § 902(h), Aug. 13, 1981, 95 Stat. 561, provided that: “The
Amendments
made by this section [amending this section and section 201, 225a [now 238d], 229b [now 238j], 243, 246, 289k–1, 300d–4, 300d–6, 300l–2, 300m, 300m–3, 9412, and 9511 of this title, repealing section 247b–1, 247b–2, 255, 300d to 300d–3, 300d–5, 300d–7 to 300d–9, 300d–21, 2689 to 2689l, 2689n to 2689p, 2689r to 2689aa, 9411, 9421 to 9423, 9431 to 9438, 9451, 9452, 9461 to 9465, 9471 to 9473, 9481, 9491 to 9493, 9502, 9512, 9521, and 9523 of this title, repealing provisions set out as notes under section 246 and 2689 of this title, and transferring section 2689m to section 229d [now 238l] of this title] shall take effect October 1, 1981.”
Effective Date
of 1978 Amendment Pub. L. 95–622, title I, § 110(c), Nov. 9, 1978, 92 Stat. 3420, provided that the amendment made by that section is effective July 29, 1975.
Effective Date
Section effective July 1, 1975, see section 608 of Pub. L. 94–63, set out as an
Effective Date
of 1975 Amendment note under section 247b of this title. Other Legal Rights of United States Not Adversely Affected by 1985 Amendment Pub. L. 99–129, title II, § 226(c), Oct. 22, 1985, 99 Stat. 547, provided that: “The
Amendments
made by subsection (a) of this section [amending this section] shall not adversely affect other legal rights of the United States.”
Reference
Citations & Metadata
Citation
42 U.S.C. § 238l
Title 42 — The Public Health and Welfare
Last Updated
Apr 6, 2026
Release point: 119-73