BILL NUMBER: AB 1929	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 26, 2014
	AMENDED IN ASSEMBLY  MAY 1, 2014

INTRODUCED BY   Assembly Member Chau

                        FEBRUARY 19, 2014

   An act to add Section 51312.5 to the Health and Safety Code,
relating to mental health.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1929, as amended, Chau. California Housing Finance Agency: MHSA
funding: special needs housing for person with mental illness.
   Existing law, the Mental Health Services Act (hereafter, the
MHSA), an initiative measure, was approved by the voters in November
2004 as Proposition 63. The MHSA establishes the Mental Health
Oversight and Accountability Commission, and imposes a tax of 1% on
incomes above $1,000,000 for the purpose of financing new or expanded
mental health services. Under the MHSA, the State Department of
Mental Health is required, among other things, to distribute funds
for local assistance for designated mental health programs according
to a local plan. Existing law requires the State Department of Health
Care Services to implement the mental health services provided under
the Adult and Older Adult Mental Health System of Care Act, which
provides, among other things, funds for counties to provide mental
health services and related supportive housing or housing assistance
necessary to stabilize homeless, mentally ill persons or mentally ill
persons at risk of being homeless. The MHSA permits amendment by the
Legislature by a2/3 vote of each house if the amendment is
consistent with and furthers the intent of the MHSA, and also permits
the Legislature to clarify procedures and terms of the MHSA by a
majority vote.
   Existing law establishes the California Housing Finance Fund in
the State Treasury, and authorizes the transfer of construction loan
funds to the construction lender or to the contractor as necessary to
meet draws for progress payments pursuant to rules and regulations
of the California Housing Finance Agency. Existing law authorizes the
agency to make loans to finance affordable housing, including
residential structures, housing developments, multifamily rental
housing, special needs housing, as defined, and other forms of
housing permitted by provisions regulating housing and community
development.
   Existing law authorizes the agency to issue revenue bonds, in
accordance with specified requirements, for the purpose of financing
the acquisition, construction, rehabilitation, refinancing, or
development of special needs housing, including, but not limited to,
supportive housing intended to benefit persons identified as having
special mental health needs, including housing intended to meet the
housing needs of persons eligible for mental health services funded
in whole or in part under the MHSA. Existing law requires the agency,
in consultation with the State Department of Mental Health and the
State Department of Housing and Community Development, and other
agencies and interested parties, to prepare and present to the
Legislature a plan for the development, acquisition, construction,
and rehabilitation of supportive housing projects using up to
$75,000,000 annually in funding from the Mental Health Services Act,
as provided under the Governor's Executive Order S-07-06. Under
existing law, by executive order, the State Department of Mental
Health, in consultation with the California Mental Health Directors
Association, is directed to allocate up to $75,000,000 in Mental
Health Services Act funds each year to finance the capital costs
associated with the development, acquisition, construction, and
rehabilitation of permanent supportive housing for individuals with
mental illness.
   This bill would authorize a county mental health department to
deposit with the agency funding received by the county under the MHSA
for the development of housing to meet the special housing needs of
persons with mental illness. The bill would authorize the agency to
receive MHSA funding from a county to finance the acquisition,
construction, rehabilitation, refinancing, or development of special
needs housing for persons with mental illness. The bill would require
the agency to coordinate with the State Department of Health Care
Services to administer the use of these funds.
   This bill would declare that it clarifies procedures and terms of
the Mental Health Services Act.
   This bill would authorize the agency to enter into financial and
other agreements with the county, and other agencies as necessary, to
commit sufficient county funds derived from the MHSA, including
future allocations.
   This bill would require the agency to provide technical assistance
to a county mental health department as necessary to assist the
county in selecting the special needs housing that would best meet
the needs of the county's special needs residents.
   The bill would authorize the agency to charge the county a fee, of
up to 1%  of future allocations   of the MHSA
loan amount per project  , unless the county has committed less
than $1,000,000 in which case the agency may charge a fee of up to
1.5%  of future allocations   of the MHSA loan
amount per project  , to cover the reasonable costs incurred by
the agency for providing assistance under these provisions and would
authorize payment of these fees from county MHSA funds.
   The bill would require the agency to release  unexpended
  unencumbered  MHSA housing funding from the
initial $400,000,000 allocation upon the request of the respective
county and would require these counties to dedicate these funds,
within one year of receipt of the funds from the agency, to providing
housing assistance, as defined, to persons with serious mental
illness who are homeless, or mentally ill persons who are at risk of
being homeless.
   The bill would  makes   make  findings
and declarations regarding the need to establish a statutory
structure to promote and facilitate a process by which county mental
health departments are able to more fully utilize the MHSA funds for
supportive housing and other housing assistance purposes.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) The Mental Health Services Act (hereafter, the MHSA), an
initiative measure approved by the voters in November 2004 as
Proposition 63, provides funding for local assistance for designated
mental health programs.
   (b) A critical component of the success of community services for
persons with mental illness is the availability of supportive
housing.
   (c) It is the intent of the Legislature that the California
Housing Finance Agency (CalHFA) continue the MHSA housing program.
The State Department of Mental Health, CalHFA, and the County Mental
Health Directors Association partnered together to administer a
housing program under which $400,000,000 in MHSA funds were initially
made available to finance the capital costs associated with the
development, acquisition, construction, or rehabilitation, or all, of
permanent supportive housing for individuals with mental illness and
their families, including homeless individuals with mental illness
and their families.
   (d) Through Executive Order S-07-06 in 2006, Governor
Schwarzenegger directed the creation of the MHSA housing program. The
State Department of Mental Health, in consultation with the
California Mental Health Directors Association, were directed to
allocate up to $75,000,000 annually in MHSA funding to finance the
development, acquisition, construction, or rehabilitation, or all, of
10,000 permanent supportive housing units for individuals with
mental illness and their families, especially homeless individuals
with mental illness and their families.
   (e) Senate Bill 257 (Chesbro), Chapter 748 of  the 
Statutes of 2006, authorized CalHFA to finance permanent supportive
housing for individuals with mental illness. Senate Bill 257 also
directed CalHFA, in consultation with the State Department of Mental
Health and the State Department of Housing and Community Development,
and other agencies and parties, to present to the Legislature a plan
for the use of MHSA funds for the development of permanent
supportive housing.
   (f) In 2007, county mental health departments agreed to set aside
$400,000,000 of MHSA funds with CalHFA, and allocate these funds to
all but the eight least populated counties for the purpose of
building permanent supportive housing. Counties were authorized to
use $75,000,000 annually for capital costs and $40,000,000 annually
for operating and maintenance costs. While most counties have already
expended their share of these funds, others have not because these
counties received small allocations that do not make the construction
of housing units feasible. Releasing these funds to their respective
counties will enable these counties to better utilize these funds
for supportive housing and housing assistance for individuals with
serious mental illness, and those homeless individuals with mental
illness or mentally ill individuals at risk of being homeless.
   (g) Counties currently receive a direct allocation of MHSA funds
and have the discretion to dedicate additional funds for supportive
housing purposes. Some counties have found it beneficial to continue
utilizing CalHFA's assistance, given the complexity of developing
supportive housing.
   (h) The purpose of this act is to provide a statutory structure to
promote and facilitate this process by authorizing county mental
health departments to more fully utilize MHSA funds for housing
purposes, including the assistance of CalHFA.
  SEC. 2.  Section 51312.5 is added to the Health and Safety Code, to
read:
   51312.5.  (a) A county mental health department may deposit with
the agency funding received by the county under the Mental Health
Services Act for the development of housing to meet the special
housing needs of persons with mental illness.
   (b) The agency may receive MHSA funding from a county to finance
the acquisition, construction, rehabilitation, refinancing, or
development of special needs housing for persons with mental illness.
The agency shall coordinate with the State Department of Health Care
Services to administer the use of these funds.
   (c) The agency may enter into financial and other agreements with
the county, and other agencies as necessary, to commit sufficient
county funds derived from the MHSA, including, but not limited to,
funds from future allocations.
   (d) The agency shall provide technical assistance to a county
mental health department as necessary to assist the county in
selecting the special needs housing that would best meet the needs of
the county's residents with mental illness.
   (e) The agency may charge the county a fee, of up to 1 percent
 of future allocations,  of the MHSA loan amount
per project,  to cover the reasonable costs incurred by the
agency for providing assistance under this chapter, unless the county
has committed fewer than one million dollars ($1,000,000), in which
case the agency may charge the county a fee of up to 1.5 percent
 of future allocations.   of the MHSA loan
amount per project.  These fees may be paid from county MHSA
funds.
   (f) The agency shall release  unexpended  
unencumbered  MHSA housing funding from the initial
four-hundred-million-dollars ($400,000,000) allocation upon the
request of the respective county. The county shall dedicate these
funds, within one year of receipt of the funds from the agency, to
providing housing assistance to persons with serious mental illness
who are homeless, or mentally ill persons at risk of being homeless.
The county shall track the expenditure of these funds and report
these expenditures to the agency. For purposes of this subdivision,
"housing assistance" includes, but is not limited to, each of the
following:
   (1) Rental assistance or capitalized operating subsidies.
   (2) Housing relocation services.
   (3) Security deposits, utility deposits, or other move-in cost
assistance.
   (4) Utility payments.
   (5) Moving cost assistance.
   (6) Capital funding to build or rehabilitate affordable housing
for homeless, mentally ill persons or mentally ill persons at risk of
being homeless. 
   (g) This section does not preclude a county from depositing
funding from sources other than the funds derived from the MHSA with
the agency for the purpose of developing supportive housing for
persons with mental illness. 
  SEC. 3.  The Legislature finds and declares that this act clarifies
procedures and terms of the Mental Health Services Act within the
meaning of Section 18 of the Mental Health Services Act.