---
kind: "section"
citation: "42 U.S.C. § 300x–31"
title: "42"
title_heading: "The Public Health and Welfare"
number: "300x–31"
heading: "Restrictions on expenditure of grant"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/300x-31"
units:
  - "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. Restrictions on expenditure of grant

- (a) **In general—**
  - (1) **Certain restrictions—** A [funding agreement](/usc/42/300x–8.md?p=2) for a grant under [section 300x–21 of this title](/usc/42/300x–21.md) is that the [State](/usc/42/201.md?p=f) involved will not expend the grant—
    - (A) to provide inpatient [hospital](/usc/42/300s–3.md?p=1) [services](/usc/42/201.md?p=a), except as provided in [subsection (b)](#b);
    - (B) to make cash payments to intended recipients of health [services](/usc/42/201.md?p=a);
    - (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](/usc/42/300s–3.md?p=3) private entity; or
    - (F) to carry out any [program](/usc/42/274l–1.md?p=4) prohibited by [section 300ee–5 of this title](/usc/42/300ee–5.md).
  - (2) **Limitation on administrative expenses—** A [funding agreement](/usc/42/300x–8.md?p=2) for a grant under [section 300x–21 of this title](/usc/42/300x–21.md) is that the [State](/usc/42/201.md?p=f) 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](/usc/42/300x–8.md?p=2) for a [State](/usc/42/201.md?p=f) for a grant under [section 300x–21 of this title](/usc/42/300x–21.md) is that, in expending the grant for the purpose of providing [treatment services](/usc/42/300x–34.md?p=7) in penal or correctional institutions of the [State](/usc/42/201.md?p=f), the [State](/usc/42/201.md?p=f) will not expend more than an amount equal to the amount expended for such purpose by the [State](/usc/42/201.md?p=f) from the grant made under section 300x–1a[^1] of this title to the [State](/usc/42/201.md?p=f) for fiscal year 1991 (as section 300x–1a[^1] 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), a [State](/usc/42/201.md?p=f) may expend a grant under [section 300x–21 of this title](/usc/42/300x–21.md) to provide inpatient [hospital](/usc/42/300s–3.md?p=1) [services](/usc/42/201.md?p=a) as [treatment](/usc/42/11851.md?p=11) for [substance use disorders](/usc/42/300x–34.md?p=4) only if it has been determined, in accordance with guidelines issued by the [Secretary](/usc/42/201.md?p=c), that such [treatment](/usc/42/11851.md?p=11) is a medical necessity for the individual involved, and that the individual cannot be effectively treated in a community-based, nonhospital, residential [program](/usc/42/274l–1.md?p=4) of [treatment](/usc/42/11851.md?p=11).
  - (2) **Rate of payment—** In the case of an individual for whom a grant under [section 300x–21 of this title](/usc/42/300x–21.md) is expended to provide inpatient [hospital](/usc/42/300s–3.md?p=1) [services](/usc/42/201.md?p=a) described in [paragraph (1)](#b-1), a [funding agreement](/usc/42/300x–8.md?p=2) for the grant for the [State](/usc/42/201.md?p=f) involved is that the daily rate of payment provided to the [hospital](/usc/42/300s–3.md?p=1) for providing the [services](/usc/42/201.md?p=a) to the individual will not exceed the comparable daily rate provided for community-based, nonhospital, residential [programs](/usc/42/274l–1.md?p=4) of [treatment](/usc/42/11851.md?p=11) for [substance use disorders](/usc/42/300x–34.md?p=4).
- (c) **Waiver regarding construction of facilities—**
  - (1) **In general—** The [Secretary](/usc/42/201.md?p=c) may provide to any [State](/usc/42/201.md?p=f) a waiver of the restriction established in [subsection (a)(1)(C)](#a-1-C) for the purpose of authorizing the [State](/usc/42/201.md?p=f) to expend a grant under [section 300x–21 of this title](/usc/42/300x–21.md) for the [construction](/usc/42/300s–3.md?p=7) of a new facility or rehabilitation of an existing facility, but not for land acquisition.
  - (2) **Standard regarding need for waiver—** The [Secretary](/usc/42/201.md?p=c) may approve a waiver under [paragraph (1)](#c-1) only if the [State](/usc/42/201.md?p=f) demonstrates to the [Secretary](/usc/42/201.md?p=c) that adequate [treatment](/usc/42/11851.md?p=11) 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)](#c-1), the [Secretary](/usc/42/201.md?p=c) shall allow the use of a specified amount of funds to construct or rehabilitate a specified number of beds for residential [treatment](/usc/42/11851.md?p=11) and a specified number of slots for outpatient [treatment](/usc/42/11851.md?p=11), based on reasonable estimates by the [State](/usc/42/201.md?p=f) of the costs of [construction](/usc/42/300s–3.md?p=7) or rehabilitation. In considering waiver applications, the [Secretary](/usc/42/201.md?p=c) shall ensure that the [State](/usc/42/201.md?p=f) has carefully designed a [program](/usc/42/274l–1.md?p=4) that will minimize the costs of additional beds.
  - (4) **Matching funds—** The [Secretary](/usc/42/201.md?p=c) may grant a waiver under [paragraph (1)](#c-1) only if the [State](/usc/42/201.md?p=f) agrees, with respect to the costs to be incurred by the [State](/usc/42/201.md?p=f) 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](/usc/42/300x–21.md).
  - (5) **Date certain for acting upon request—** The [Secretary](/usc/42/201.md?p=c) shall act upon a request for a waiver under [paragraph (1)](#c-1) not later than 120 days after the date on which the request is made.

## Footnotes

[^1]: See References in Text note below.

## Source credit

(July 1, 1944, ch. 373, title XIX, § 1931, as added Pub. L. 102–321, title II, § 202, July 10, 1992, 106 Stat. 397; amended Pub. L. 114–255, div. B, title VIII, § 8002(h), Dec. 13, 2016, 130 Stat. 1230; Pub. L. 117–328, div. FF, title I, § 1241(a)(7), Dec. 29, 2022, 136 Stat. 5677.)

## Notes

### 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”.