Amended in Senate August 18, 2014

Amended in Senate June 26, 2014

Amended in Assembly May 1, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1929

Introduced by Assembly Member Chau

February 19, 2014

An act to add Section begin delete 51312.5 to the Health and Safety Code, end delete begin insert 5892.5 to the Welfare and Institutions Code, end insert 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.

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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.

end delete begin delete

This bill would declare that it clarifies procedures and terms of the Mental Health Services Act.

end delete begin delete

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.

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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.

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The bill would authorize the agency to charge the county a fee, of up to 1% 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 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.

end delete

The bill would require the begin delete agency end delete begin insert agency, with the concurrence of the State Department of Health Care Services, end insert to release unencumbered begin insert Mental Health Services Fund moneys dedicated to the end insert MHSA housing begin delete funding from the initial $400,000,000 allocation end delete begin insert program end insert upon the request of the respective begin delete county end delete begin insert county, end insert and would require these counties to begin delete dedicate end delete begin insert use end insert these begin delete funds, within one year of receipt of the funds from the agency, end delete to begin delete providing end delete begin insert provide end insert housing assistance, as defined, to begin insert identified target populations, including end insert persons with begin insert a end insert serious mental begin delete illness who are homeless, or mentally ill persons who are at risk of being homeless. end delete begin insert disorder. end insert

The bill would make findings and declarations regarding the need to begin delete establish a statutory structure to promote and facilitate a process by which end delete begin insert encourage counties, the agency, and the State Department of Health Care Services to continue partnering in the development of supportive housing, and to ensure end insert county mental health departments are able to more fully utilize the MHSA funds for supportive housing and other housing assistance purposes.

begin insert

This bill would declare that it clarifies procedures and terms of the Mental Health Services Act.

end insert

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 begin delete provide a statutory structure to
promote and facilitate this process by authorizing end delete begin insert encourage
counties, CalHFA, and the State Department of Health Care
Services to continue partnering in the development of supportive
housing, and to enable end insert county mental health departments to more
fully utilize MHSA funds for housing begin delete purposes, including the
assistance of CalHFA. end delete begin insert purposes. end insert

begin delete

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 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 the MHSA loan amount per
project. These fees may be paid from county MHSA funds.

(f) The agency shall release 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.

end delete

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 5892.5 is added to the end insert begin insert Welfare and Institutions
Code end insert begin insert , to read: end insert

begin insert

begin insert 5892.5. end insert   

(a) (1) The California Housing Finance Agency, with
the concurrence of the State Department of Health Care Services,
shall release unencumbered Mental Health Services Fund moneys
dedicated to the Mental Health Services Act Housing Program
upon the written request of the respective county. The county shall
use these Mental Health Services Fund moneys released by the
agency to provide housing assistance to the target populations
who are identified in Section 5600.3.

(2) For purposes of this section, “housing assistance” means
each of the following:

(A) Rental assistance or capitalized operating subsidies.

(B) Security deposits, utility deposits, or other move-in cost
assistance.

(C) Utility payments.

(D) Moving cost assistance.

(E) Capital funding to build or rehabilitate housing for
homeless, mentally ill persons or mentally ill persons who are at
risk of being homeless.

(b) For purposes of administering those funds released to a
respective county pursuant to subdivision (a), the county shall
comply with all of the requirements described in the Mental Health
Services Act, including, but not limited to, Sections 5664, 5847,
subdivision (h) of Section 5892, and 5899.

end insert

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.