BILL ANALYSIS Ó
AB 1929
Page 1
Date of Hearing: April 30, 2014
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Ed Chau, Chair
AB 1929 (Chau) - As Introduced: February 19, 2014
AS PROPOSED TO BE AMENDED
SUBJECT : Mental Health Services Act housing program
SUMMARY : Expressly authorizes county mental health
departments, the Department of Health Care Services (DHCS), and
the California Housing Finance Agency (CalHFA) to continue
partnering in the development of permanent supportive housing
for people with mental illness. Specifically, this bill :
1)Expressly authorizes a county mental health department to
deposit Mental Health Services Act (MHSA) funding with CalHFA
and receive assistance from CalHFA in developing supportive
housing units for people with mental illness.
2)Provides that CalHFA will continue to coordinate with DHCS to
administer the use of these funds.
3)Authorizes CalHFA to charge an administrative fee, paid from a
county's MHSA funds, equal to 1% of future deposits, unless a
county has committed fewer than $1 million, in which case the
agency may charge up to 1.5%, but not to exceed the reasonable
costs of providing services, to cover the cost of providing
this assistance.
4)Releases MHSA housing program funds currently held by CalHFA
to their respective counties, upon request of those counties,
to be used for the purpose of providing housing assistance for
people with mental illness who are homeless or at risk of
homelessness.
EXISTING LAW :
1)Imposes a tax of 1% on personal earnings over $1 million for
the purpose of financing new or expanded mental health
services, pursuant to Proposition 63, the Mental Health
Services Act (MHSA).
2)Requires the State Department of Mental Health (DMH) to
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provide counties with resources to support county mental
health programs and monitor progress toward statewide goals
for children, transition age youth, adults, older adults, and
families, and addresses a broad continuum of prevention, early
intervention and service needs and the necessary
infrastructure, technology and training elements to support
this system.
3)Establishes the MHSA housing program, which provides permanent
supportive housing for people with mental illness, and
allocates up to $75 million per year for this purpose.
(Executive Order S-07-06)
4)Authorizes CalHFA to finance permanent supportive housing for
people with mental illness. (Health & Safety Code Sections
51050.1, 51312-51318)
5)Allows the Legislature to add provisions to clarify procedures
and terms of the MHSA by a majority vote.
FISCAL EFFECT : Unknown.
COMMENTS :
Background:
In 2004, California voters approved Proposition 63: the MHSA.
The MHSA imposes a 1% tax on personal earnings over $1 million
to fund county-run mental health programs. Through Executive
Order S-07-06 in 2006, Governor Schwarzenegger directed the
creation of the MHSA housing program, with a stated goal of
providing 10,000 permanent supportive housing units for
individuals with mental illness and their families and an
allocation of up to $75 million per year in MHSA funds for this
purpose. SB 257 (Chesbro), Chapter 748, Statutes of 2006,
codified CalHFA's authority to finance permanent supportive
housing for people with mental illness and directed CalHFA, in
conjunction with DMH and the Department of Housing and Community
Development (HCD) to present a plan to the Legislature for the
use of Proposition 63 funds for the development of supportive
housing projects.
In 2007, county mental health departments agreed to a one-time
set aside of $400 million of Proposition 63 revenue with CalHFA.
These funds were allocated these funds to all but the eight
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least populated counties for the purpose of building permanent
supportive housing for people with mental illness who are
homeless or at risk of homelessness. Of this $400 million,
counties were authorized to use $75 million per year for capital
costs and $40 million per year for operating and maintenance
costs.
To administer the $400 million allocated for the MHSA housing
program, a partnership was created between CalHFA and the
Department of Mental Health (DMH). DMH was subsequently folded
into the Department of Health Care Services (DHCS) during
reorganization in 2013. CalHFA underwrites the requests for
capital funds and capitalizes operating expenses. DHCS evaluates
each applicant's proposed target population and supportive
services plan. Once funds are awarded, CalHFA oversees all
development and financial aspects of the project and DHCS
oversees the provision of services. CalHFA also provides
technical assistance to county mental health departments to
select special needs housing that would best meet the needs of a
county's residents with mental illness, and charges an
administrative fee for this assistance. As a result of
partnering with CalHFA, many counties have created permanent
supportive housing units for homeless people with mental
illness.
While most counties have already expended their share of the
$400 million allocation, others have not because they received
small allocations that do not make construction of housing units
feasible. These funds reside with the State, and releasing them
to their respective counties will give these counties additional
flexibility in providing housing assistance to residents with
mental illness. AB 1929 defines "housing assistance" for
purposes of these released funds as including, but not limited
to, rental assistance or capitalized operating subsidies,
housing relocation assistance, security deposits, utility
deposits, or other move-in cost assistance, utility payments,
moving cost assistance, and capital funding to build or
rehabilitate housing affordable to people experiencing
homelessness or at risk of homelessness.
Counties currently receive their MHSA allocations directly, and
county mental health departments have discretion to dedicate
additional MHSA funding toward housing. Some larger counties
have indicated they would like to deposit funds into the housing
program and have CalHFA continue to provide technical assistance
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to select housing projects.
Purpose of the Bill : Supportive housing has proven to be an
effective strategy for reducing homelessness among those with
mental illness. At any given moment more than 133,000
Californians are homeless. Of these Californians, roughly 33,800
- or 25% - are considered chronically homeless. According to
researchers, at least one-third of chronically homeless people
are mentally ill.
AB 1929 expressly authorizes county mental health departments,
CalHFA, and DHCS to partner in the development of permanent
supportive housing for people with mental illness. County
mental health departments may continue to deposit MHSA funding
with CalHFA. In return, counties may receive technical
assistance from CalHFA, as well as assistance with financing the
acquisition, construction, rehabilitation, refinancing, or
development of supportive housing units for people with mental
illness. CalHFA is authorized to charge counties a fee, paid
from MHSA funds, for providing this assistance.
Additionally, this bill releases unexpended funds from the
original $400 million allocation to their respective counties,
upon request of those counties. As these funds were originally
set aside for housing purposes, counties must use them to
provide housing assistance for people with mental illness who
are homeless or at risk of homelessness. Releasing these funds
directly to the counties will better enable them to utilize
these funds for housing assistance.
Below is a mock-up of the bill as proposed to be amended:
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.
AB 1929
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(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 Department of Mental Health, in consultation with
the California Mental Health Directors Association, was directed
to allocate up to seventy-five million dollars ($75,000,000)
annually in MHSA funding to finance the development,
acquisition, construction, and/or rehabilitation 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) SB 257 (Chesbro), Chapter 748, Statutes of 2006, authorized
CalHFAto finance permanent supportive housing for individuals
with mental illness. SB 257 also directed CalHFA, in
conjunction with the Department of Mental Health Services (DMH)
and the Department of Housing and Community Development (HCD) to
present a plan to the Legislature for the use of MHSA funds for
the development of supportive housing projects.
(f) In 2007, county mental health departments agreed to set
aside $400 million of Proposition 63 revenue 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 per year
for capital costs and $40,000,000 per year for operating and
maintenance costs. While most counties have already expended
their share of these funds, others have not because they
received small allocations that do not make construction of
housing units feasible. Releasing these funds to their
respective counties will enable these counties to better utilize
these funds for housing support and assistance for persons with
serious mental illness and homeless or at risk of homelessness.
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(g) Counties currently receive a direct allocation of MHSA
funds, and have the discretion to dedicate additional funds for
supportive housing purposes. Funding under the MHSA has is
available to local agencies for development of supportive
housing. However, the complexity of the process surrounding the
financing and development of capital projects presents obstacles
to the development of this housing in sufficient quantities.
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 the MHSA funds
for housing purposes, including the assistance of the CalHFA.
California Housing Finance Agency.
SEC. 2.
Section 51312.5 is added to the Health and Safety Code, to
read:
(a) A county mental health department may deposit with the
agency funding received by the county under the Mental h 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 continue its coordination with DHCS 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 , for the purpose
of securing revenue bonds issued by the agency under this
chapter for the purposes of meeting the special housing needs of
persons with mental illness.
(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.
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(e) The agency may charge the county a fee , of up to 1 percent
of future allocations, to cover the reasonable costs incurred by
the agency for providing assistance under this chapter not to
exceed the actual costs of those services . 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. These fees may be paid from
the county MHSA funds.
( f) The agency shall release unexpended 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.
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.
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REGISTERED SUPPORT / OPPOSITION :
Support
California Council of Community Mental Health Agencies
Housing California
National Alliance on Mental Illness
Mental Health America of California
California Psychiatric Association
The California Chapter of the American College of Emergency
Physicians
Western Center of Law and Poverty
Opposition
None on file
Analysis Prepared by : Rebecca Rabovsky / H. & C.D. / (916)
319-2085