Amended in Senate June 14, 2016

Amended in Senate June 13, 2016

Amended in Assembly April 14, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 1618


Introduced by Committee on Budget (Assembly Members Ting (Chair), Travis Allen, Bigelow, Bloom, Bonta, Campos, Chávez, Chiu, Cooper, Gordon, Grove, Harper, Holden, Irwin, Kim, Lackey, McCarty, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Patterson, Rodriguez, Thurmond, Wilk, and Williams)

January 7, 2016


An act to amend Sections 5830 and 5847 of, and to add Part 3.9 (commencing with Section 5849.1) to Division 5 of, the Welfare and Institutions Code, relating to housing, and making an appropriationbegin delete therefor.end deletebegin insert therefor, to take effect immediately, bill related to the budget.end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1618, as amended, Committee on Budget. No Place Like Home Program: establishment.

(1) The Mental Health Services Act (MHSA), an initiative measure enacted by the voters as Proposition 63 at the November 2, 2004, statewide general election, imposes a 1% tax on that portion of a taxpayer’s taxable income that exceeds $1,000,000 and requires that the revenue from that tax be deposited in the Mental Health Services Fund to fund various county mental health programs. The MHSA authorizes the Legislature to amend its provisions by a 23 vote, provided that the amendment is consistent with and furthers the intent of the act.

This bill would establish the No Place Like Home Program, to be administered by the Department of Housing and Community Development. The bill would require the department to award $2,000,000,000 through a competitive program among counties to finance capital costs, including, but not limited to, acquisition, design, construction, rehabilitation, or preservation, and to capitalize operating reserves, of permanent supportive housing for the target population, as specified. The bill would further require the department to allocate $1,800,000 to a competitive program, as specified, and would require that applicants meet specified requirements to be eligible to apply for funding and would require the department to evaluate applications using specified criteria. The bill would require the department to award moneys in four rounds, as provided. The bill would require the department to allocate $200,000,000 among all counties within this state based on a calculation that includes, among other considerations, the numbers of homeless persons residing in each county. The bill would establish, and continuously appropriate, the No Place Like Home Fund for these purposes. The bill would also appropriate $6,200,000 from the Mental Health Services Fund to the department to provide technical and application preparation assistance to counties. The bill would require counties to annually report to the department on activities funded under these provisions, as provided.

This bill would establish the No Place Like Home Program Advisory Committee, as specified, and require the committee to assist and advise the department in the implementation of the program, review and make recommendations on the department’s guidelines, review the department’s progress in distributing moneys pursuant to the program, and provide advise and guidance on statewide homelessness issues. The bill would also require the department to submit a report on the program to the Legislature by December 31 of each year, as specified, and, upon an appropriation for that purpose, to contract with a public or private research university in this state to evaluate the program, as provided.

(2) The MHSA, among other things, requires county health programs to develop plans for innovative programs, to be funded as provided, and requires that the innovative program have specified purposes, including increasing access to services. Existing law requires that the projects included in the innovative program portion of a county health plan meet specified requirements, including increasing access to underserved groups and increasing access to services.

This bill would specify that the services required to be provided through these programs, among other things, may include the provision of permanent supportive housing.

(3) This bill would declare that its provisions further the intent of the MHSA.

begin insert

(4) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

end insert

Vote: begin deletemajority end deletebegin insert23end insert. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P3    1

SECTION 1.  

Section 5830 of the Welfare and Institutions Code
2 is amended to read:

3

5830.  

County mental health programs shall develop plans for
4innovative programs to be funded pursuant to paragraph (6) of
5subdivision (a) of Section 5892.

6(a) The innovative programs shall have the following purposes:

7(1) To increase access to underserved groups.

8(2) To increase the quality of services, including better
9outcomes.

10(3) To promote interagency collaboration.

11(4) To increase access to services, including, but not limited to,
12services provided through permanent supportive housing.

13(b) All projects included in the innovative program portion of
14the county plan shall meet the following requirements:

15(1) Address one of the following purposes as its primary
16purpose:

17(A) Increase access to underserved groups, which may include
18providing access through the provision of permanent supportive
19housing.

20(B) Increase the quality of services, including measurable
21outcomes.

22(C) Promote interagency and community collaboration.

23(D) Increase access to services, which may include providing
24access through the provision of permanent supportive housing.

25(2) Support innovative approaches by doing one of the
26following:

27(A) Introducing new mental health practices or approaches,
28including, but not limited to, prevention and early intervention.

P4    1(B) Making a change to an existing mental health practice or
2approach, including, but not limited to, adaptation for a new setting
3or community.

4(C) Introducing a new application to the mental health system
5of a promising community-driven practice or an approach that has
6been successful in nonmental health contexts or settings.

7(D) Participating in a housing program designed to stabilize a
8person’s living situation while also providing supportive services
9on site.

10(c) An innovative project may affect virtually any aspect of
11mental health practices or assess a new or changed application of
12a promising approach to solving persistent, seemingly intractable
13mental health challenges, including, but not limited to, any of the
14following:

15(1) Administrative, governance, and organizational practices,
16processes, or procedures.

17(2) Advocacy.

18(3) Education and training for service providers, including
19nontraditional mental health practitioners.

20(4) Outreach, capacity building, and community development.

21(5) System development.

22(6) Public education efforts.

23(7) Research.

24(8) Services and interventions, including prevention, early
25intervention, and treatment.

26(9) Permanent supportive housing development.

27(d) If an innovative project has proven to be successful and a
28county chooses to continue it, the project workplan shall transition
29 to another category of funding as appropriate.

30(e) County mental health programs shall expend funds for their
31innovation programs upon approval by the Mental Health Services
32Oversight and Accountability Commission.

33

SEC. 2.  

Section 5847 of the Welfare and Institutions Code is
34amended to read:

35

5847.  

Integrated Plans for Prevention, Innovation, and System
36of Care Services.

37(a) Each county mental health program shall prepare and submit
38a three-year program and expenditure plan, and annual updates,
39adopted by the county board of supervisors, to the Mental Health
P5    1Services Oversight and Accountability Commission within 30 days
2after adoption.

3(b) The three-year program and expenditure plan shall be based
4on available unspent funds and estimated revenue allocations
5provided by the state and in accordance with established
6stakeholder engagement and planning requirements as required in
7Section 5848. The three-year program and expenditure plan and
8annual updates shall include all of the following:

9(1) A program for prevention and early intervention in
10accordance with Part 3.6 (commencing with Section 5840).

11(2) A program for services to children in accordance with Part
124 (commencing with Section 5850), to include a program pursuant
13to Chapter 4 (commencing with Section 18250) of Part 6 of
14Division 9 or provide substantial evidence that it is not feasible to
15establish a wraparound program in that county.

16(3) A program for services to adults and seniors in accordance
17with Part 3 (commencing with Section 5800).

18(4) A program for innovations in accordance with Part 3.2
19(commencing with Section 5830).

20(5) A program for technological needs and capital facilities
21needed to provide services pursuant to Part 3 (commencing with
22Section 5800), Part 3.6 (commencing with Section 5840), and Part
234 (commencing with Section 5850). All plans for proposed facilities
24with restrictive settings shall demonstrate that the needs of the
25people to be served cannot be met in a less restrictive or more
26integrated setting, such as permanent supportive housing.

27(6) Identification of shortages in personnel to provide services
28pursuant to the above programs and the additional assistance
29needed from the education and training programs established
30pursuant to Part 3.1 (commencing with Section 5820).

31(7) Establishment and maintenance of a prudent reserve to
32ensure the county program will continue to be able to serve
33children, adults, and seniors that it is currently serving pursuant
34to Part 3 (commencing with Section 5800), the Adult and Older
35Adult Mental Health System of Care Act, Part 3.6 (commencing
36with Section 5840), Prevention and Early Intervention Programs,
37and Part 4 (commencing with Section 5850), the Children’s Mental
38Health Services Act, during years in which revenues for the Mental
39Health Services Fund are below recent averages adjusted by
P6    1changes in the state population and the California Consumer Price
2Index.

3(8) Certification by the county behavioral health director, which
4ensures that the county has complied with all pertinent regulations,
5laws, and statutes of the Mental Health Services Act, including
6stakeholder participation and nonsupplantation requirements.

7(9) Certification by the county behavioral health director and
8by the county auditor-controller that the county has complied with
9any fiscal accountability requirements as directed by the State
10Department of Health Care Services, and that all expenditures are
11consistent with the requirements of the Mental Health Services
12Act.

13(c) The programs established pursuant to paragraphs (2) and
14(3) of subdivision (b) shall include services to address the needs
15of transition age youth 16 to 25 years of age. In implementing this
16subdivision, county mental health programs shall consider the
17needs of transition age foster youth.

18(d) Each year, the State Department of Health Care Services
19shall inform the County Behavioral Health Directors Association
20of California and the Mental Health Services Oversight and
21Accountability Commission of the methodology used for revenue
22allocation to the counties.

23(e) Each county mental health program shall prepare expenditure
24plans pursuant to Part 3 (commencing with Section 5800) for adults
25and seniors, Part 3.2 (commencing with Section 5830) for
26innovative programs, Part 3.6 (commencing with Section 5840)
27for prevention and early intervention programs, and Part 4
28(commencing with Section 5850) for services for children, and
29updates to the plans developed pursuant to this section. Each
30expenditure update shall indicate the number of children, adults,
31and seniors to be served pursuant to Part 3 (commencing with
32Section 5800), and Part 4 (commencing with Section 5850), and
33the cost per person. The expenditure update shall include utilization
34of unspent funds allocated in the previous year and the proposed
35expenditure for the same purpose.

36(f) A county mental health program shall include an allocation
37of funds from a reserve established pursuant to paragraph (7) of
38subdivision (b) for services pursuant to paragraphs (2) and (3) of
39subdivision (b) in years in which the allocation of funds for services
40pursuant to subdivision (e) are not adequate to continue to serve
P7    1the same number of individuals as the county had been serving in
2the previous fiscal year.

3

SEC. 3.  

Part 3.9 (commencing with Section 5849.1) is added
4to Division 5 of the Welfare and Institutions Code, to read:

5 

6PART 3.9.  The No Place Like Home Program

7

 

8

5849.1.  

(a) The Legislature finds and declares that this part is
9consistent with and furthers the purposes of the Mental Health
10Services Act, enacted by Proposition 63 at the November 2, 2004,
11statewide general election, within the meaning of Section 18 of
12that measure.

13(b) The Legislature further finds and declares all of the
14following:

15(1) Housing is a key factor for stabilization and recovery to
16occur and results in improved outcomes for individuals living with
17a mental illness.

18(2) Untreated mental illness can increase the risk of
19homelessness, especially for single adults.

20(3) California has the nation’s largest homeless population that
21is disproportionally comprised of women with children, veterans,
22and the chronically homeless.

23(4) California has the largest number of homeless veterans in
24the United States at 24 percent of the total population in our nation.
25Fifty percent of California’s veterans live with serious mental
26illness and 70 percent have a substance use disorder.

27(5) Fifty percent of mothers experiencing homelessness have
28experienced a major depressive episode since becoming homeless
29and 36 percent of these mothers live with post-traumatic stress
30disorder and 41 percent have a substance use disorder.

31(6) Ninety-three percent of supportive housing tenants who live
32with mental illness and substance use disorders voluntarily
33participated in the services offered.

34(7) Adults who receive 2 years of “whatever-it-takes,” or Full
35Service Partnership services, experience a 68 percent reduction in
36homelessness.

37(8) For every dollar of bond funds invested in permanent
38supportive housing, the state and local governments can leverage
39a significant amount of additional dollars through tax credits,
P8    1Medicaid health services funding, and other housing development
2funds.

3(9) Tenants of permanent supportive housing reduced their visits
4to the emergency department by 56 percent, and their hospital
5admissions by 45 percent.

6(10) The cost in public services for a chronically homeless
7Californian ranges from $60,000 to $100,000 annually. When
8housed, these costs are cut in half and some reports show reductions
9in cost of more than 70 percent, including potentially less
10involvement with the health and criminal justice systems.

11(11) Californians have identified homelessness as their top tier
12priority; this measure seeks to address the needs of the most
13vulnerable people within this population.

14(12) Having counties provide mental health programming and
15services is a benefit to the state.

16

5849.2.  

As used in this part, the following definitions shall
17apply:

18(a) “At risk of chronic homelessness” includes, but is not limited
19to, persons who are at high risk of long-term or intermittent
20homelessness, including persons with mental illness exiting
21institutionalized settings, including, but not limited to, jail and
22mental health facilities, who were homeless prior to admission,
23transition age youth experiencing homelessness or with significant
24barriers to housing stability, and others, as defined in program
25guidelines.

26(b) “Chronically homeless” has the same meaning as defined
27in Section 578.3 of Title 24 of the Code of Federal Regulations,
28as that section read on May 1, 2016.

29(c) “Committee” means the No Place Like Home Program
30Advisory Committee established pursuant to Section 5849.3.

31(d) “County” includes, but is not limited to, a city and county.

32(e) “Department” means the Department of Housing and
33Community Development.

34(f) “Development sponsor” has the same meaning as “sponsor”
35as defined in Section 50675.2 of the Health and Safety Code.

36(g) “Fund” means the No Place Like Home Fund established
37pursuant to Section 5849.4.

38(h) “Homeless” has the same meaning as defined in Section
39578.3 of Title 24 of the Code of Federal Regulations, as that section
40read on May 1, 2016.

P9    1(i) “Permanent supportive housing” has the same meaning as
2“supportive housing,” as defined in Section 50675.14 of the Health
3and Safety Code, except that “permanent supportive housing” shall
4include associated facilities if used to provide services to housing
5residents.

6(j) “Program” means the process for awarding funds and
7distributing moneys to applicants established in Sections 5849.7,
85849.8, and 5849.9.

9(1) “Competitive program” means that portion of the program
10established by Section 5849.8.

11(2) “Distribution program” means that portion of the program
12described in Section 5849.9.

13(k) “Target population” means individuals or households as
14provided in Section 5600.3 who are homeless, chronically
15homeless, or at risk of chronic homelessness.

16

5849.3.  

(a) There is hereby established the No Place Like
17Home Program Advisory Committee. Membership on the
18committee shall be as follows:

19(1) The Director of Housing and Community Development, or
20his or her designee, who shall serve as the chairperson of the
21committee.

22(2) The Director of Health Care Services, or his or her designee,
23and an additional representative.

24(3) The Secretary of Veterans Affairs, or his or her designee.

25(4) The Director of Social Services, or his or her designee.

26(5) The Treasurer, or his or her designee.

27(6) The chair of the Mental Health Services Oversight and
28Accountability Commission, or his or her designee.

29(7) A chief administrative officer of a small county or a member
30of a county board of supervisors of a small county, as provided by
31subdivision (d) of Section 5489.6, to be appointed by the Governor.

32(8) A chief administrative officer of a large county or a member
33of a county board of supervisors of a large county, as provided by
34subdivision (b) of Section 5489.6, to be appointed by the Governor.

35(9) A director of a county behavioral health department, to be
36appointed by the Governor.

37(10) An administrative officer of a city, to be appointed by the
38Governor.

39(11) A representative of an affordable housing organization, to
40be appointed by the Speaker of the Assembly.

P10   1(12) A resident of supportive housing, to be appointed by the
2Governor.

3(13) A representative of a community mental health
4organization, to be appointed by the Senate Rules Committee.

5(14) A representative of a local or regional continuum of care
6organization that coordinates homelessness funding, to be
7appointed by the Governor.

8(b) The committee shall do all of the following:

9(1) Assist and advise the department in the implementation of
10the program.

11(2) Review and make recommendations on the department’s
12guidelines.

13(3) Review the department’s progress in distributing moneys
14pursuant to this part.

15(4) Provide advice and guidance more broadly on statewide
16homelessness issues.

17

5849.4.  

(a) The No Place Like Home Fund is hereby created
18within the State Treasury and, notwithstanding Section 13340 of
19the Government Code, continuously appropriated to the department
20for the purposes of this part. The department may use up to five
21percent of the amount deposited in the fund for administrative
22expenses in implementing this part.

23(b) There shall be paid into the fund the following:

24(1) Any proceeds from the issuance of bonds by the Treasurer
25for the purpose of implementing the program.

26(2) Any other federal or state grant, or from any private donation
27or grant, for the purposes of this part.

28(3) Any interest payment, loan repayments, or other return of
29funds.

30

5849.5.  

(a) The department may adopt guidelines or regulations
31as necessary to exercise the powers and perform the duties
32conferred or imposed on it by this part. Any guideline or regulation
33adopted pursuant to this section shall not be subject to the
34requirements of the Administrative Procedure Act (Chapter 3.5
35(commencing with Section 11340) of Part 1 of Division 3 of Title
362 of the Government Code). The department shall consult with
37key stakeholders, including, but not limited to, counties.

38(b) The department may adopt emergency regulations in order
39to expedite the award of moneys pursuant to this part.

P11   1

5849.6.  

For the purpose of administering this part, the
2department shall organize counties into the following competitive
3groupings based on population:

4(a) The County of Los Angeles.

5(b) Large counties with a population greater than 750,000.

6(c) Medium counties with a population between 200,000 to
7750,000.

8(d) Small counties with a population less than 200,000.

9The competitive program shall distribute funding among the
10groupings based on a calculation made by the department that shall
11include the number of homeless persons residing within each
12county, as determined by the department, and considers minimum
13funding levels necessary for a permanent supportive housing
14development. The department, at its discretion, may consider other
15factors in the calculation if it supports the objectives of this part.

16

5849.7.  

(a) The department shall administer a competitive
17program, pursuant to Section 5849.8, and distribution program,
18pursuant to Section 5849.9, for awarding a total of two billion
19dollars ($2,000,000,000) among counties to finance capital costs
20including, but not limited to, acquisition, design, construction,
21rehabilitation, or preservation, and to capitalize operating reserves,
22of permanent supportive housing for the target population.

23(b) For the competitive program established by Section 5849.8,
24the following shall apply:

25(1) A county may apply as the sole applicant if it is the
26development sponsor or jointly with a separate entity as
27development sponsor.

28(2) Funded developments shall integrate the target population
29with the general public.

30(3) Funded developments shall utilize low barrier tenant
31selection practices that prioritize vulnerable populations and offer
32flexible, voluntary, and individualized supportive services.

33(4) The guidelines may provide for alternative housing models,
34such as shared housing models of fewer than five units. Integration
35requirements may be modified in shared housing.

36(5) Funds shall be offered as deferred payment loans to finance
37capital costs including acquisition, design, construction,
38rehabilitation, or preservation, and to capitalize operating reserves
39of, permanent supportive housing for the target population.

P12   1(6) The department shall adopt guidelines establishing income
2and rent standards.

3

5849.8.  

(a) One billion eight hundred million dollars
4($1,800,000,000) shall be allocated from the fund for the purposes
5of the competitive program. The department shall develop a
6competitive application process for the purpose of awarding
7moneys pursuant to this section. In considering applications, the
8department shall do all of the following:

9(1) Restrict eligibility to applicants that meet the following
10minimum criteria:

11(A) The county commits to provide mental health supportive
12services and to coordinate the provision of or referral to other
13services, including, but not limited to, substance use treatment
14services, to the tenants of the supportive housing development for
15at least 20 years. Services shall be provided onsite at the supportive
16housing development or in a location otherwise easily accessible
17to tenants. The county may use, but is not restricted to using, any
18of the following available funding sources as allowed by state and
19federal law:

20(i) The Local Mental Health Services Fund established pursuant
21to subdivision (f) of Section 5892.

22(ii) The Mental Health Account within the Local Health Welfare
23Trust Fund established pursuant to Section 17600.10.

24(iii) The Behavioral Health Subaccount within the County Local
25Revenue Fund 2011 established pursuant to paragraph (4) of
26subdivision (f) of Section 30025 of the Government Code.

27(iv) Funds received from other private or public entities.

28(v) Other county funds.

29(B) The county has developed a county plan to combat
30 homelessness, which includes a description of homelessness
31countywide, any special challenges or barriers to serving the target
32population, county resources applied to address the issue, available
33community-based resources, an outline of partners and
34collaborations, and proposed solutions.

35(C) Meet other threshold requirements including, but not limited
36to, developer capacity to develop, own, and operate a permanent
37supportive housing development for the target population,
38application proposes a financially feasible development with
39reasonable development costs.

P13   1(2) The department shall evaluate applications using, at
2minimum, the following criteria:

3(A) The extent to which units assisted by the program are
4restricted to persons who are chronically homeless or at risk of
5chronic homelessness within the target population.

6(B) The extent to which funds are leveraged for capital costs.

7(C) The extent to which projects achieve deeper affordability
8through the use of non-state project-based rental assistance,
9operating subsidies, or other funding.

10(D) Project readiness.

11(E) The extent to which applicants offer a range of on and
12off-site supportive services to tenants, including mental health
13services, behavioral health services, primary health, employment,
14and other tenancy support services.

15(b) The department may establish an alternative process for
16allocating funds directly to counties, as calculated in Section
175849.6, with at least five percent of the state’s homeless population
18and that demonstrate the capacity to directly administer loan funds
19for permanent supportive housing serving the target population
20and the ability to prioritize individuals with mental health
21supportive needs who are homeless or at risk of chronic
22homelessness, consistent with this part and as determined by the
23department. The department shall adopt guidelines establishing
24the parameters of an alternative process, if any, and requirements
25for local administration of funds, including, but not limited to,
26project selection process, eligible use of funds, loan terms, rent
27and occupancy restrictions, provision of services, and reporting
28and monitoring requirements. Counties participating in the
29alternative process shall not be eligible for the competitive process
30and shall be limited to the amount calculated in Section 5849.6.
31Funds not committed to supportive housing developments within
32two years following award of funds to counties shall be returned
33to the state for the purposes of the competitive program. The
34 department shall consider the following when selecting
35participating counties:

36(1) Demonstrated ability to finance permanent supportive
37housing with local and federal funds, and monitor requirements
38for the life of the loan.

39(2) Past history of delivering supportive services to the target
40population in housing.

P14   1(3) Past history of committing project-based vouchers to
2supportive housing.

3(4) Ability to prioritize the most vulnerable within the target
4population through coordinated entry system.

5(c) The department shall set aside 8 percent of funds offered in
6Rounds 1 through 4, inclusive, for small counties as provided in
7subdivision (d) of Section 5849.6.

8(d) The department shall award funds in at least four rounds as
9follows:

10(1) The department shall issue its first request for proposal for
11the competitive program no later than 180 days after any deadline
12for appeals as set forth in Section 870 of the Code of Civil
13Procedure.

14(2) The second round shall be completed no later than one year
15after the completion of the first round.

16(3) The third round shall be completed no later than one year
17after the completion of the second round.

18(4) The fourth round shall be completed no later than one year
19after the completion of the third round.

20(5) Subsequent rounds shall occur annually thereafter in order
21to fully exhaust remaining funds and the department may
22discontinue the use of the competitive groupings in Section 5849.6,
23the alternative process in subdivision (b) for any funds not awarded
24by the county, and the rural set aside funds as set forth in
25subdivision (c).

26(e) (1) Any loans made by the department pursuant to this
27section shall be in the form of secured deferred payment loans to
28pay for the eligible costs of development. Principal and
29accumulated interest is due and payable upon completion of the
30term of the loan, which shall be established through program
31guidelines adopted pursuant to Section 5849.5. The loan shall bear
32simple interest at a rate of three percent per annum on the unpaid
33principal balance. The department shall require annual loan
34payments in the minimum amount necessary to cover the costs of
35project monitoring. For the first 15 years of the loan term, the
36amount of the required loan payments shall not exceed forty-two
37hundredths of 1 percent per annum.

38(2) The department may establish maximum loan-to-value
39requirements for some or all of the types of projects that are eligible
P15   1for funding under this part, which shall be established through
2program guidelines adopted pursuant to Section 5849.5.

3(3) The department shall establish per-unit and per-project loan
4limits for all project types.

5(f) (1) The department may designate an amount not to exceed
6four percent of funds allocated for the competitive program, not
7including funding allocated pursuant to subdivision (b), in order
8to cure or avert a default on the terms of any loan or other
9obligation by the recipient of financial assistance, or bidding at
10any foreclosure sale where the default or foreclosure sale would
11jeopardize the department’s security in the rental housing
12development assisted pursuant to this part. The funds so designated
13shall be known as the “default reserve.”

14(2) The department may use default reserve funds made
15available pursuant to this section to repair or maintain any rental
16housing development assistance pursuant to this part to protect the
17department’s security interest.

18(3) The payment or advance of funds by the department pursuant
19to this subdivision shall be exclusively within the department’s
20discretion, and no person shall be deemed to have any entitlement
21to the payment or advance of those funds. The amount of any funds
22expended by the department for the purposes of curing or averting
23a default shall be added to the loan amount secured by the rental
24housing development and shall be payable to the department upon
25demand.

26(g) (1) Prior to disbursement of any funds for loans made
27pursuant this section, the department shall enter into a regulatory
28agreement with the developer that provides for all of the following:

29(A) Sets standards for tenant selection to ensure occupancy of
30assisted units by eligible households of very low and low income
31for the term of the agreement.

32(B) Governs the terms of occupancy agreements.

33(C) Contains provisions to maintain affordable rent levels to
34serve eligible households.

35(D) Provides for periodic inspections and review of year-end
36fiscal audits and related reports by the department.

37(E) Permits a developer to distribute earnings in an amount
38established by the department and based on the number of units
39in the rental housing development.

40(F) Has a term for not less than the original term of the loan.

P16   1(G) Contains any other provisions necessary to carry out the
2purposes of this part.

3(2) The agreement shall be binding upon the developer and
4successors in interest upon sale or transfer of the rental housing
5development regardless of any prepayment of the loan.

6(3) The agreement shall be recorded in the office of the county
7recorder in the county in which the real property subject to the
8agreement is located.

9

5849.9.  

(a) In addition to the competitive program established
10by Section 5849.8, the department shall distribute two hundred
11million dollars ($200,000,000) from the fund on an
12“over-the-counter” basis to finance the construction, rehabilitation,
13or preservation, and to capitalize operating reserves, of permanent
14supportive housing for individuals in the target population with a
15priority for those with mental health supportive needs who are
16homeless or at risk of chronic homelessness. Funds to be awarded
17pursuant to this section shall be available to all counties within the
18state proportionate to the number of homeless persons residing
19within each county as calculated in Section 5849.6.

20(b) Funds not awarded within 18 months following the first
21 allocation of moneys in accordance with subdivision (d) shall be
22used for the purposes of the competitive program.

23(c) The moneys described in subdivision (a) shall be
24administered either in accordance with the procedures for awarding
25funds to local agencies established by the existing Mental Health
26Services Act housing program administered by the Department of
27Health Care Services and the California Housing Finance Agency
28or alternative procedures developed by the department for
29distributing these moneys that enhance the efficiency and goals of
30the distribution program.

31(d) The department shall make the first allocation of moneys
32pursuant to this section no later than 60 days after any deadline
33for appeals as set forth in Section 870 of the Code of Civil
34Procedure.

35

5849.10.  

(a) The sum of six million two hundred thousand
36dollars ($6,200,000) is hereby appropriated from the Mental Health
37Services Fund to the department to provide technical and
38application preparation assistance to counties.

P17   1(b) Eligible use of technical and application preparation
2assistance shall include, but is not limited to, assistance in
3performing one or more of the following activities:

4(1) Applying for program funds.

5(2) Implementing activities funded by moneys distributed
6pursuant to this part, including the development of supportive
7housing for the target population.

8(3) Coordinating funded activities with local homelessness
9systems, including coordinated access systems developed pursuant
10to Section 578.7(a)(8) of Title 24 of the Code of Federal
11Regulations, as that section read on May 1, 2016.

12(4) Delivering a range of supportive services to tenants.

13(5) Collecting data, evaluating program activities, and sharing
14data among multiple systems, such as the Mental Health Services
15Act, enacted by Proposition 63 at the November 2, 2004, statewide
16general election, the Medi-Cal Act (Chapter 7 (commencing with
17Section 14000) of Part 3 of Division 9) and implementing
18regulations, and homelessness systems.

19(c) The department shall provide funds to a county upon
20application as follows:

21(1) To a large county and to the County of Los Angeles, the
22department shall provide one hundred fifty thousand dollars
23($150,000).

24(2) To a medium county, the department shall provide one
25hundred thousand dollars ($100,000).

26(3) To a small county, the department shall provide seventy-five
27thousand dollars ($75,000).

28(d) If a county does not expend the moneys allocated pursuant
29to subdivision (c) by June 30, 2020, those moneys shall be used
30to augment the funding pursuant to subdivision (e).

31(e) The department may contract for expert technical assistance
32and application preparation assistance. The department shall deploy
33such assistance to counties based upon a process to be defined in
34guidelines.

35(f) The department may establish a unit for the purpose of
36providing technical assistance to counties.

37

5849.11.  

(a) The counties shall annually report to the
38department on activities funded under this part, including
39information on the funded supportive housing development.
40Reported information shall include location of projects, number
P18   1of units assisted, occupancy restrictions, number of individuals
2and households served, related income levels, and homeless,
3veteran, and mental health status

4(b) The department shall submit a report on the program to the
5Legislature by December 31 of each year, commencing with the
6year after the first full year in which the program is in effect. The
7report shall contain the following:

8(1) The processes established for distributing funds.

9(2) The distribution of funds among counties.

10(3) Any recommendations as to modifications to the program
11for the purpose of improving efficiency or furthering the goals of
12the program.

13(c) The report required to be submitted by subdivision (b) shall
14be submitted in compliance with Section 9795 of the Government
15Code.

16

5849.12.  

(a) Upon an appropriation of funds for the purpose
17of this section, the department shall contract with a public or private
18research university in this state to evaluate the program. The
19department shall develop the research design and issue a request
20for proposal for a contract for the evaluation, with the assistance
21of the Legislative Analyst’s Office and the Department of Finance.

22(b) The department shall submit the final research design and
23request for proposal required by subdivision (a) to the Chairperson
24of the Joint Legislative Budget Committee no more than 30 days
25prior to executing a contract for the evaluation.

26

5849.13.  

An action to determine the legality of any action by
27the department pursuant to this part may be brought pursuant to
28Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of
29the Code of Civil Procedure.

30

5849.14.  

The Department of Finance may authorize a loan
31from the General Fund to the No Place Like Home Fund for
32cashflow purposes in an amount not to exceed one million dollars
33($1,000,000) subject to the following conditions:

34(a) The loan is to allow the department to begin program
35implementation activities, including, but not limited to, drafting
36program guidelines and regulations.

37(b) The loan is short term, and shall be repaid within 30 days
38after the deposit of bond proceeds into the fund pursuant to
39paragraph (1) of subdivision (b) of Section 5849.4.

P19   1(c) Interest charges may be waived pursuant to subdivision (e)
2of Section 16314 of the Government Code.

3

SEC. 4.  

The Legislature finds and declares that this act furthers
4the intent of the Mental Health Services Act, enacted by
5Proposition 63 at the November 2, 2004, statewide general election.

6It is intent of the Legislature that the costs to service the debt
7for the bond authorized by this act shall not impede in any way
8the direct mental health services provided by counties, and that
9the counties shall maximize the use of all available state, federal,
10and local funding sources, including those listed in Section 5849.7
11of the Welfare and Institutions Code, to support direct local mental
12health services.

13begin insert

begin insertSEC. 5.end insert  

end insert
begin insert

This act is a bill providing for appropriations related
14to the Budget Bill within the meaning of subdivision (e) of Section
1512 of Article IV of the California Constitution, has been identified
16as related to the budget in the Budget Bill, and shall take effect
17immediately.

end insert


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