42 U.S.C. § 300x–31: Restrictions on…

§300x–31 Restrictions on Expenditure of Grant

Title 42 › CHAPTER 6A — PUBLIC HEALTH SERVICE › SUBCHAPTER XVII — BLOCK GRANTS › Part B — Block Grants Regarding Mental Health and Substance Use › subpart ii — block grants for substance use prevention, treatment, and recovery services › § 300x–31

Last updated Sep 23, 2026|Official source

Summary

States that get these grants must follow several spending rules. They may not use the money for inpatient hospital care except as explained below. They may not give cash directly to people, buy or improve land, build or permanently fix buildings (minor remodeling is allowed), or buy major medical equipment. They may not use the grant to meet a required non‑Federal spending condition, give the money to for‑profit entities (only public or nonprofit), or run programs that federal law bans. No more than 5 percent of the grant may be used for administration. If the grant is used for treatment in state jails or prisons, the state cannot spend more than the amount it spent for that purpose from the related federal grant in fiscal year 1991. A state may pay for inpatient hospital treatment only when a medical need is found under the Secretary’s rules and the person cannot be treated in a community‑based, nonhospital residential program. When inpatient care is used, the hospital’s daily payment cannot be higher than the comparable daily rate for community residential programs. The Secretary can waive the ban on building or rehabbing facilities (but not buying land) if the state shows existing buildings won’t work and no suitable buildings are available. Any waiver will allow funds for a set number of beds and outpatient slots based on the state’s cost estimates, require the state to match federal dollars with at least $1 of non‑Federal cash for each $1, and must be decided within 120 days.

Title 42, §300x–31

The Public Health and Welfare, Source: USLM XML via OLRC

(a)In general

(1)Certain restrictions

A funding agreement for a grant under section 300x–21 of this title is that the State involved will not expend the grant—

(A)to provide inpatient hospital services, except as provided in subsection (b);

(B)to make cash payments to intended recipients of health services;

(C)to purchase or improve land, purchase, construct, or permanently improve (other than minor remodeling) any building or other facility, or purchase major medical equipment;

(D)to satisfy any requirement for the expenditure of non-Federal funds as a condition for the receipt of Federal funds;

(E)to provide financial assistance to any entity other than a public or nonprofit private entity; or

(F)to carry out any program prohibited by section 300ee–5 of this title.

(2)Limitation on administrative expenses

A funding agreement for a grant under section 300x–21 of this title is that the State involved will not expend more than 5 percent of the grant to pay the costs of administering the grant.

(3)Limitation regarding penal and correctional institutions

A funding agreement for a State for a grant under section 300x–21 of this title is that, in expending the grant for the purpose of providing treatment services in penal or correctional institutions of the State, the State will not expend more than an amount equal to the amount expended for such purpose by the State from the grant made under section 300x–1a of this title to the State for fiscal year 1991 (as section 300x–1a of this title was in effect for such fiscal year).

(b)Exception regarding inpatient hospital services

(1)Medical necessity as precondition

With respect to compliance with the agreement made under subsection (a), a State may expend a grant under section 300x–21 of this title to provide inpatient hospital services as treatment for substance use disorders only if it has been determined, in accordance with guidelines issued by the Secretary, that such treatment is a medical necessity for the individual involved, and that the individual cannot be effectively treated in a community-based, nonhospital, residential program of treatment.

(2)Rate of payment

In the case of an individual for whom a grant under section 300x–21 of this title is expended to provide inpatient hospital services described in paragraph (1), a funding agreement for the grant for the State involved is that the daily rate of payment provided to the hospital for providing the services to the individual will not exceed the comparable daily rate provided for community-based, nonhospital, residential programs of treatment for substance use disorders.

(c)Waiver regarding construction of facilities

(1)In general

The Secretary may provide to any State a waiver of the restriction established in subsection (a)(1)(C) for the purpose of authorizing the State to expend a grant under section 300x–21 of this title for the construction of a new facility or rehabilitation of an existing facility, but not for land acquisition.

(2)Standard regarding need for waiver

The Secretary may approve a waiver under paragraph (1) only if the State demonstrates to the Secretary that adequate treatment cannot be provided through the use of existing facilities and that alternative facilities in existing suitable buildings are not available.

(3)Amount

In granting a waiver under paragraph (1), the Secretary shall allow the use of a specified amount of funds to construct or rehabilitate a specified number of beds for residential treatment and a specified number of slots for outpatient treatment, based on reasonable estimates by the State of the costs of construction or rehabilitation. In considering waiver applications, the Secretary shall ensure that the State has carefully designed a program that will minimize the costs of additional beds.

(4)Matching funds

The Secretary may grant a waiver under paragraph (1) only if the State agrees, with respect to the costs to be incurred by the State in carrying out the purpose of the waiver, to make available non-Federal contributions in cash toward such costs in an amount equal to not less than $1 for each $1 of Federal funds provided under section 300x–21 of this title.

(5)Date certain for acting upon request

The Secretary shall act upon a request for a waiver under paragraph (1) not later than 120 days after the date on which the request is made.

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 300x–1a of this title, referred to in subsec. (a)(3), was repealed by Pub. L. 102–321, title II, § 201(2), July 10, 1992, 106 Stat. 378.

Prior Provisions

A prior section 1931 of act

July 1, 1944, was classified to section 300y–21 of this title and subsequently omitted from the Code. Another prior section 1931 of act

July 1, 1944, was classified to section 300y–10 of this title prior to repeal by Pub. L. 99–280.

Amendments

2022—Subsec. (b)(2). Pub. L. 117–328 substituted “substance use disorders” for “substance abuse”. 2016—Subsec. (b)(1). Pub. L. 114–255 substituted “substance use disorders” for “substance abuse”.