Amended in Senate June 15, 2016

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 bybegin delete 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)end deletebegin insert Committee on Budget (Assembly Members Ting (Chair), Bloom, Bonta, Campos, Chiu, Cooper, Gordon, Holden, Irwin, McCarty, Mullin, Nazarian, Oend insertbegin insert’Donnell, Rodriguez, Thurmond, and Williams)end insert

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 appropriation therefor, to take effect immediately, bill related to the budget.

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 allocatebegin delete $1,800,000end deletebegin insert $1,800,000,000end insert 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 statebegin insert in amountsend insert based on a calculationbegin delete that includes, among other considerations,end deletebegin insert ofend insert thebegin delete numbersend deletebegin insert numberend insert of homeless persons residing in eachbegin delete county.end deletebegin insert county or in $500,000 amounts, whichever is greater for each county.end insert 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.

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

Vote: 23. 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.

P4    1(D) Increase access to services, which may include providing
2access through the provision of permanent supportive housing.

3(2) Support innovative approaches by doing one of the
4following:

5(A) Introducing new mental health practices or approaches,
6including, but not limited to, prevention and early intervention.

7(B) Making a change to an existing mental health practice or
8approach, including, but not limited to, adaptation for a new setting
9or community.

10(C) Introducing a new application to the mental health system
11of a promising community-driven practice or an approach that has
12been successful in nonmental health contexts or settings.

13(D) Participating in a housing program designed to stabilize a
14person’s living situation while also providing supportive services
15on site.

16(c) An innovative project may affect virtually any aspect of
17mental health practices or assess a new or changed application of
18a promising approach to solving persistent, seemingly intractable
19mental health challenges, including, but not limited to, any of the
20following:

21(1) Administrative, governance, and organizational practices,
22processes, or procedures.

23(2) Advocacy.

24(3) Education and training for service providers, including
25nontraditional mental health practitioners.

26(4) Outreach, capacity building, and community development.

27(5) System development.

28(6) Public education efforts.

29(7) Research.

30(8) Services and interventions, including prevention, early
31intervention, and treatment.

32(9) Permanent supportive housing development.

33(d) If an innovative project has proven to be successful and a
34county chooses to continue it, the project workplan shall transition
35to another category of funding as appropriate.

36(e) County mental health programs shall expend funds for their
37innovation programs upon approval by the Mental Health Services
38Oversight and Accountability Commission.

39

SEC. 2.  

Section 5847 of the Welfare and Institutions Code is
40amended to read:

P5    1

5847.  

Integrated Plans for Prevention, Innovation, and System
2of Care Services.

3(a) Each county mental health program shall prepare and submit
4a three-year program and expenditure plan, and annual updates,
5adopted by the county board of supervisors, to the Mental Health
6Services Oversight and Accountability Commission within 30 days
7after adoption.

8(b) The three-year program and expenditure plan shall be based
9on available unspent funds and estimated revenue allocations
10provided by the state and in accordance with established
11stakeholder engagement and planning requirements as required in
12Section 5848. The three-year program and expenditure plan and
13annual updates shall include all of the following:

14(1) A program for prevention and early intervention in
15accordance with Part 3.6 (commencing with Section 5840).

16(2) A program for services to children in accordance with Part
174 (commencing with Section 5850), to include a program pursuant
18to Chapter 4 (commencing with Section 18250) of Part 6 of
19Division 9 or provide substantial evidence that it is not feasible to
20establish a wraparound program in that county.

21(3) A program for services to adults and seniors in accordance
22with Part 3 (commencing with Section 5800).

23(4) A program for innovations in accordance with Part 3.2
24(commencing with Section 5830).

25(5) A program for technological needs and capital facilities
26needed to provide services pursuant to Part 3 (commencing with
27Section 5800), Part 3.6 (commencing with Section 5840), and Part
284 (commencing with Section 5850). All plans for proposed facilities
29with restrictive settings shall demonstrate that the needs of the
30people to be served cannot be met in a less restrictive or more
31integrated setting, such as permanent supportive housing.

32(6) Identification of shortages in personnel to provide services
33pursuant to the above programs and the additional assistance
34needed from the education and training programs established
35pursuant to Part 3.1 (commencing with Section 5820).

36(7) Establishment and maintenance of a prudent reserve to
37ensure the county program will continue to be able to serve
38children, adults, and seniors that it is currently serving pursuant
39to Part 3 (commencing with Section 5800), the Adult and Older
40Adult Mental Health System of Care Act, Part 3.6 (commencing
P6    1with Section 5840), Prevention and Early Intervention Programs,
2and Part 4 (commencing with Section 5850), the Children’s Mental
3Health Services Act, during years in which revenues for the Mental
4Health Services Fund are below recent averages adjusted by
5changes in the state population and the California Consumer Price
6Index.

7(8) Certification by the county behavioral health director, which
8ensures that the county has complied with all pertinent regulations,
9laws, and statutes of the Mental Health Services Act, including
10stakeholder participation and nonsupplantation requirements.

11(9) Certification by the county behavioral health director and
12by the county auditor-controller that the county has complied with
13any fiscal accountability requirements as directed by the State
14Department of Health Care Services, and that all expenditures are
15consistent with the requirements of the Mental Health Services
16Act.

17(c) The programs established pursuant to paragraphs (2) and
18(3) of subdivision (b) shall include services to address the needs
19of transition age youth 16 to 25 years of age. In implementing this
20subdivision, county mental health programs shall consider the
21needs of transition age foster youth.

22(d) Each year, the State Department of Health Care Services
23shall inform the County Behavioral Health Directors Association
24of California and the Mental Health Services Oversight and
25Accountability Commission of the methodology used for revenue
26allocation to the counties.

27(e) Each county mental health program shall prepare expenditure
28plans pursuant to Part 3 (commencing with Section 5800) for adults
29and seniors, Part 3.2 (commencing with Section 5830) for
30innovative programs, Part 3.6 (commencing with Section 5840)
31for prevention and early intervention programs, and Part 4
32(commencing with Section 5850) for services for children, and
33updates to the plans developed pursuant to this section. Each
34expenditure update shall indicate the number of children, adults,
35and seniors to be served pursuant to Part 3 (commencing with
36Section 5800), and Part 4 (commencing with Section 5850), and
37the cost per person. The expenditure update shall include utilization
38of unspent funds allocated in the previous year and the proposed
39expenditure for the same purpose.

P7    1(f) A county mental health program shall include an allocation
2of funds from a reserve established pursuant to paragraph (7) of
3subdivision (b) for services pursuant to paragraphs (2) and (3) of
4subdivision (b) in years in which the allocation of funds for services
5pursuant to subdivision (e) are not adequate to continue to serve
6the same number of individuals as the county had been serving in
7the previous fiscal year.

8

SEC. 3.  

Part 3.9 (commencing with Section 5849.1) is added
9to Division 5 of the Welfare and Institutions Code, to read:

10 

11PART 3.9.  The No Place Like Home Program

12

 

13

5849.1.  

(a) The Legislature finds and declares that this part is
14consistent with and furthers the purposes of the Mental Health
15Services Act, enacted by Proposition 63 at the November 2, 2004,
16statewide general election, within the meaning of Section 18 of
17that measure.

18(b) The Legislature further finds and declares all of the
19following:

20(1) Housing is a key factor for stabilization and recovery to
21occur and results in improved outcomes for individuals living with
22a mental illness.

23(2) Untreated mental illness can increase the risk of
24homelessness, especially for single adults.

25(3) California has the nation’s largest homeless population that
26is disproportionally comprised of women with children, veterans,
27and the chronically homeless.

28(4) California has the largest number of homeless veterans in
29the United States at 24 percent of the total population in our nation.
30Fifty percent of California’s veterans live with serious mental
31illness and 70 percent have a substance use disorder.

32(5) Fifty percent of mothers experiencing homelessness have
33experienced a major depressive episode since becoming homeless
34and 36 percent of these mothers live with post-traumatic stress
35disorder and 41 percent have a substance use disorder.

36(6) Ninety-three percent of supportive housing tenants who live
37with mental illness and substance use disorders voluntarily
38participated in the services offered.

P8    1(7) Adults who receive 2 years of “whatever-it-takes,” or Full
2Service Partnership services, experience a 68 percent reduction in
3homelessness.

4(8) For every dollar of bond funds invested in permanent
5supportive housing, the state and local governments can leverage
6a significant amount of additional dollars through tax credits,
7Medicaid health services funding, and other housing development
8funds.

9(9) Tenants of permanent supportive housing reduced their visits
10to the emergency department by 56 percent, and their hospital
11admissions by 45 percent.

12(10) The cost in public services for a chronically homeless
13Californian ranges from $60,000 to $100,000 annually. When
14housed, these costs are cut in half and some reports show reductions
15in cost of more than 70 percent, including potentially less
16involvement with the health and criminal justice systems.

17(11) Californians have identified homelessness as their top tier
18priority; this measure seeks to address the needs of the most
19vulnerable people within this population.

20(12) Having counties provide mental health programming and
21services is a benefit to the state.

22

5849.2.  

As used in this part, the following definitions shall
23apply:

24(a) “At risk of chronic homelessness” includes, but is not limited
25to, persons who are at high risk of long-term or intermittent
26homelessness, including persons with mental illness exiting
27institutionalized settings, including, but not limited to, jail and
28mental health facilities, who were homeless prior to admission,
29transition age youth experiencing homelessness or with significant
30barriers to housing stability, and others, as defined in program
31guidelines.

32(b) “Chronically homeless” has the same meaning as defined
33in Section 578.3 of Title 24 of the Code of Federal Regulations,
34as that section read on May 1, 2016.

35(c) “Committee” means the No Place Like Home Program
36Advisory Committee established pursuant to Section 5849.3.

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

38(e) “Department” means the Department of Housing and
39Community Development.

P9    1(f) “Development sponsor” has the same meaning as “sponsor”
2as defined in Section 50675.2 of the Health and Safety Code.

3(g) “Fund” means the No Place Like Home Fund established
4pursuant to Section 5849.4.

5(h) “Homeless” has the same meaning as defined in Section
6578.3 of Title 24 of the Code of Federal Regulations, as that section
7read on May 1, 2016.

8(i) “Permanent supportive housing” has the same meaning as
9“supportive housing,” as defined in Section 50675.14 of the Health
10and Safety Code, except that “permanent supportive housing” shall
11include associated facilities if used to provide services to housing
12residents.

13(j) “Program” means the process for awarding funds and
14distributing moneys to applicants established in Sections 5849.7,
155849.8, and 5849.9.

16(1) “Competitive program” means that portion of the program
17established by Section 5849.8.

18(2) “Distribution program” means that portion of the program
19described in Section 5849.9.

20(k) “Target population” means individuals or households as
21provided in Section 5600.3 who are homeless, chronically
22homeless, or at risk of chronic homelessness.

23

5849.3.  

(a) There is hereby established the No Place Like
24Home Program Advisory Committee. Membership on the
25committee shall be as follows:

26(1) The Director of Housing and Community Development, or
27his or her designee, who shall serve as the chairperson of the
28committee.

29(2) The Director of Health Care Services, or his or her designee,
30and an additional representative.

31(3) The Secretary of Veterans Affairs, or his or her designee.

32(4) The Director of Social Services, or his or her designee.

33(5) The Treasurer, or his or her designee.

34(6) The chair of the Mental Health Services Oversight and
35Accountability Commission, or his or her designee.

36(7) A chief administrative officer of a small county or a member
37of a county board of supervisors of a small county, as provided by
38subdivision (d) of Section 5489.6, to be appointed by the Governor.

P10   1(8) A chief administrative officer of a large county or a member
2of a county board of supervisors of a large county, as provided by
3subdivision (b) of Section 5489.6, to be appointed by the Governor.

4(9) A director of a county behavioral health department, to be
5appointed by the Governor.

6(10) An administrative officer of a city, to be appointed by the
7Governor.

8(11) A representative of an affordable housing organization, to
9be appointed by the Speaker of the Assembly.

10(12) A resident of supportive housing, to be appointed by the
11Governor.

12(13) A representative of a community mental health
13organization, to be appointed by the Senate Rules Committee.

14(14) A representative of a local or regional continuum of care
15organization that coordinates homelessness funding, to be
16appointed by the Governor.

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

18(1) Assist and advise the department in the implementation of
19the program.

20(2) Review and make recommendations on the department’s
21guidelines.

22(3) Review the department’s progress in distributing moneys
23pursuant to this part.

24(4) Provide advice and guidance more broadly on statewide
25homelessness issues.

26

5849.4.  

(a) The No Place Like Home Fund is hereby created
27within the State Treasury and, notwithstanding Section 13340 of
28the Government Code, continuously appropriated to the department
29for the purposes of this part. The department may use up to five
30percent of the amount deposited in the fund for administrative
31expenses in implementing this part.

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

33(1) Any proceeds from the issuance of bonds by the Treasurer
34for the purpose of implementing the program.

35(2) Any other federal or state grant, or from any private donation
36or grant, for the purposes of this part.

37(3) Any interest payment, loan repayments, or other return of
38funds.

39

5849.5.  

(a) The department may adopt guidelines orbegin delete regulationsend delete
40begin insert regulations, in consultation with the California State Association
P11   1of Counties and other stakeholders, end insert
as necessary to exercise the
2powers and perform the duties conferred or imposed on it by this
3part. Any guideline or regulation adopted pursuant to this section
4shall not be subject to the requirements of the Administrative
5Procedure Act (Chapter 3.5 (commencing with Section 11340) of
6Part 1 of Division 3 of Title 2 of the Government Code). The
7department shall consult with key stakeholders, including, but not
8limited to, counties.

9(b) The department may adopt emergency regulations in order
10to expedite the award of moneys pursuant to this part.

11

5849.6.  

For the purpose of administeringbegin delete this part,end deletebegin insert Sections
125849.7 and 5849.8,end insert
the department shall organize counties into
13the following competitive groupings based on population:

14(a) The County of Los Angeles.

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

16(c) Medium counties with a population between 200,000 to
17750,000.

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

19The competitive program shall distribute funding among the
20groupings based on a calculation made by the department that shall
21include the number of homeless persons residing within each
22county, as determined by the department, and considers minimum
23funding levels necessary for a permanent supportive housing
24development. The department, at its discretion, may consider other
25factors in the calculation if it supports the objectives of this part.

26

5849.7.  

(a) The department shall administer a competitive
27program, pursuant to Section 5849.8, and distribution program,
28pursuant to Section 5849.9, for awarding a total of two billion
29dollars ($2,000,000,000) among counties to finance capital costs
30including, but not limited to, acquisition, design, construction,
31rehabilitation, or preservation, and to capitalize operating reserves,
32of permanent supportive housing for the target population.

33(b) For the competitive program established by Section 5849.8,
34the following shall apply:

35(1) A county may apply as the sole applicant if it is the
36development sponsor or jointly with a separate entity as
37development sponsor.

38(2) Funded developments shall integrate the target population
39with the general public.

P12   1(3) Funded developments shall utilize low barrier tenant
2selection practices that prioritize vulnerable populations and offer
3flexible, voluntary, and individualized supportive services.

4(4) The guidelines may provide for alternative housing models,
5such as shared housing models of fewer than five units. Integration
6requirements may be modified in shared housing.

7(5) Funds shall be offered as deferred payment loans to finance
8capital costs including acquisition, design, construction,
9rehabilitation, or preservation, and to capitalize operating reserves
10of, permanent supportive housing for the target population.

11(6) The department shall adopt guidelines establishing income
12and rent standards.

13

5849.8.  

(a) One billion eight hundred million dollars
14($1,800,000,000) shall be allocated from the fund for the purposes
15of the competitive program. The department shall develop a
16competitive application process for the purpose of awarding
17moneys pursuant to this section. In considering applications, the
18department shall do all of the following:

19(1) Restrict eligibility to applicants that meet the following
20minimum criteria:

21(A) The county commits to provide mental health supportive
22services and to coordinate the provision of or referral to other
23services, including, but not limited to, substance use treatment
24services, to the tenants of the supportive housing development for
25at least 20 years. Services shall be provided onsite at the supportive
26housing development or in a location otherwise easily accessible
27to tenants. The county may use, but is not restricted to using, any
28of the following available funding sources as allowed by state and
29federal law:

30(i) The Local Mental Health Services Fund established pursuant
31to subdivision (f) of Section 5892.

32(ii) The Mental Health Account within the Local Health Welfare
33Trust Fund established pursuant to Section 17600.10.

34(iii) The Behavioral Health Subaccount within the County Local
35Revenue Fund 2011 established pursuant to paragraph (4) of
36subdivision (f) of Section 30025 of the Government Code.

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

38(v) Other county funds.

39(B) The county has developed a county plan to combat
40homelessness, which includes a description of homelessness
P13   1countywide, any special challenges or barriers to serving the target
2population, county resources applied to address the issue, available
3community-based resources, an outline of partners and
4collaborations, and proposed solutions.

5(C) Meet other threshold requirements including, but not limited
6to, developer capacity to develop, own, and operate a permanent
7supportive housing development for the target population,
8application proposes a financially feasible development with
9reasonable development costs.

10(2) The department shall evaluate applications using, at
11minimum, the following criteria:

12(A) The extent to which units assisted by the program are
13restricted to persons who are chronically homeless or at risk of
14chronic homelessness within the target population.

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

16(C) The extent to which projects achieve deeper affordability
17through the use of non-state project-based rental assistance,
18operating subsidies, or other funding.

19(D) Project readiness.

20(E) The extent to which applicants offer a range of on and
21off-site supportive services to tenants, including mental health
22services, behavioral health services, primary health, employment,
23and other tenancy support services.

24(b) The department may establish an alternative process for
25allocating funds directly to counties, as calculated in Section
265849.6, with at least five percent of the state’s homeless population
27and that demonstrate the capacity to directly administer loan funds
28for permanent supportive housing serving the target population
29and the ability to prioritize individuals with mental health
30supportive needs who are homeless or at risk of chronic
31homelessness, consistent with this part and as determined by the
32department. The department shall adopt guidelines establishing
33the parameters of an alternative process, if any, and requirements
34for local administration of funds, including, but not limited to,
35project selection process, eligible use of funds, loan terms, rent
36and occupancy restrictions, provision of services, and reporting
37and monitoring requirements. Counties participating in the
38alternative process shall not be eligible for the competitive process
39and shall be limited tobegin delete the amount calculatedend deletebegin insertfunds in proportion
40to their share of the percentage of the statewide homeless
P14   1population, as calculated by the departmentend insert
in Section 5849.6.
2Funds not committed to supportive housing developments within
3two years following award of funds to counties shall be returned
4to the state for the purposes of the competitive program. The
5department shall consider the following when selecting
6participating counties:

7(1) Demonstrated ability to finance permanent supportive
8housing with local and federal funds, and monitor requirements
9for the life of the loan.

10(2) Past history of delivering supportive services to the target
11population in housing.

12(3) Past history of committing project-based vouchers to
13supportive housing.

14(4) Ability to prioritize the most vulnerable within the target
15population through coordinated entry system.

16(c) The department shall set aside 8 percent of funds offered in
17Rounds 1 through 4, inclusive, for small counties as provided in
18subdivision (d) of Section 5849.6.

19(d) The department shall award funds in at least four rounds as
20follows:

21(1) The department shall issue its first request for proposal for
22the competitive program no later than 180 days after any deadline
23for appeals as set forth in Section 870 of the Code of Civil
24Procedure.

25(2) The second round shall be completed no later than one year
26after the completion of the first round.

27(3) The third round shall be completed no later than one year
28after the completion of the second round.

29(4) The fourth round shall be completed no later than one year
30after the completion of the third round.

31(5) Subsequent rounds shall occur annually thereafter in order
32to fully exhaust remaining funds and the department may
33discontinue the use of the competitive groupings in Section 5849.6,
34the alternative process in subdivision (b) for any funds not awarded
35by the county, and the rural set aside funds as set forth in
36subdivision (c).

37(e) (1) Any loans made by the department pursuant to this
38section shall be in the form of secured deferred payment loans to
39pay for the eligible costs of development. Principal and
40accumulated interest is due and payable upon completion of the
P15   1term of the loan, which shall be established through program
2guidelines adopted pursuant to Section 5849.5. The loan shall bear
3simple interest at a rate of three percent per annum on the unpaid
4principal balance. The department shall require annual loan
5payments in the minimum amount necessary to cover the costs of
6project monitoring. For the first 15 years of the loan term, the
7amount of the required loan payments shall not exceed forty-two
8hundredths of 1 percent per annum.

9(2) The department may establish maximum loan-to-value
10requirements for some or all of the types of projects that are eligible
11for funding under this part, which shall be established through
12program guidelines adopted pursuant to Section 5849.5.

13(3) The department shall establish per-unit and per-project loan
14limits for all project types.

15(f) (1) The department may designate an amount not to exceed
16four percent of funds allocated for the competitive program, not
17including funding allocated pursuant to subdivision (b), in order
18to cure or avert a default on the terms of any loan or other
19obligation by the recipient of financial assistance, or bidding at
20any foreclosure sale where the default or foreclosure sale would
21jeopardize the department’s security in the rental housing
22development assisted pursuant to this part. The funds so designated
23shall be known as the “default reserve.”

24(2) The department may use default reserve funds made
25available pursuant to this section to repair or maintain any rental
26housing development assistance pursuant to this part to protect the
27department’s security interest.

28(3) The payment or advance of funds by the department pursuant
29to this subdivision shall be exclusively within the department’s
30discretion, and no person shall be deemed to have any entitlement
31to the payment or advance of those funds. The amount of any funds
32expended by the department for the purposes of curing or averting
33a default shall be added to the loan amount secured by the rental
34housing development and shall be payable to the department upon
35demand.

36(g) (1) Prior to disbursement of any funds for loans made
37pursuant this section, the department shall enter into a regulatory
38agreement with thebegin delete developerend deletebegin insert development sponsorend insert that provides
39for all of the following:

P16   1(A) Sets standards for tenant selection to ensure occupancy of
2assisted units by eligible households of very low and low income
3for the term of the agreement.

4(B) Governs the terms of occupancy agreements.

5(C) Contains provisions to maintain affordable rent levels to
6serve eligible households.

7(D) Provides for periodic inspections and review of year-end
8fiscal audits and related reports by the department.

9(E) Permits a developer to distribute earnings in an amount
10established by the department and based on the number of units
11in the rental housing development.

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

13(G) Contains any other provisions necessary to carry out the
14purposes of this part.

15(2) The agreement shall be binding upon the developer and
16successors in interest upon sale or transfer of the rental housing
17development regardless of any prepayment of the loan.

18(3) The agreement shall be recorded in the office of the county
19recorder in the county in which the real property subject to the
20agreement is located.

21

5849.9.  

(a) In addition to the competitive program established
22by Section 5849.8, the department shall distribute two hundred
23million dollars ($200,000,000) from the fund on an
24“over-the-counter” basis to finance the construction, rehabilitation,
25or preservation, and to capitalize operating reserves, of permanent
26supportive housing for individuals in the target population with a
27priority for those with mental health supportive needs who are
28homeless or at risk of chronic homelessness. Funds to be awarded
29pursuant to this section shall be available to all counties within the
30state proportionate to the number of homeless persons residing
31within each county as calculated in Sectionbegin delete 5849.6.end deletebegin insert 5849.6 or in
32the amount of five hundred thousand dollars ($500,000), whichever
33is greater.end insert

34(b) Funds not awarded within 18 months following the first
35allocation of moneys in accordance with subdivision (d) shall be
36used for the purposes of the competitive program.

37(c) The moneys described in subdivision (a) shall be
38administered either in accordance with the procedures for awarding
39funds to local agencies established by the existing Mental Health
40Services Act housing program administered by the Department of
P17   1Health Care Services and the California Housing Finance Agency
2or alternative procedures developed by the department for
3distributing these moneys that enhance the efficiency and goals of
4the distribution program.

5(d) The department shall make the first allocation of moneys
6pursuant to this section no later than 60 days after any deadline
7for appeals as set forth in Section 870 of the Code of Civil
8Procedure.

9

5849.10.  

(a) The sum of six million two hundred thousand
10dollars ($6,200,000) is hereby appropriated from the Mental Health
11Services Fund to the department to provide technical and
12application preparation assistance to counties.

13(b) Eligible use of technical and application preparation
14assistance shall include, but is not limited to, assistance in
15performing one or more of the following activities:

16(1) Applying for program funds.

17(2) Implementing activities funded by moneys distributed
18pursuant to this part, including the development of supportive
19housing for the target population.

20(3) Coordinating funded activities with local homelessness
21systems, including coordinated access systems developed pursuant
22to Section 578.7(a)(8) of Title 24 of the Code of Federal
23Regulations, as that section read on May 1, 2016.

24(4) Delivering a range of supportive services to tenants.

25(5) Collecting data, evaluating program activities, and sharing
26data among multiple systems, such as the Mental Health Services
27Act, enacted by Proposition 63 at the November 2, 2004, statewide
28general election, the Medi-Cal Act (Chapter 7 (commencing with
29Section 14000) of Part 3 of Division 9) and implementing
30regulations, and homelessness systems.

31(c) The department shall provide funds to a county upon
32application as follows:

33(1) To a large county and to the County of Los Angeles, the
34department shall provide one hundred fifty thousand dollars
35($150,000).

36(2) To a medium county, the department shall provide one
37hundred thousand dollars ($100,000).

38(3) To a small county, the department shall provide seventy-five
39thousand dollars ($75,000).

P18   1(d) If a county does not expend the moneys allocated pursuant
2to subdivision (c) by June 30, 2020, those moneys shall be used
3to augment the funding pursuant to subdivision (e).

4(e) The department may contract for expert technical assistance
5and application preparation assistance. The department shall deploy
6such assistance to counties based upon a process to be defined in
7 guidelines.

8(f) The department may establish a unit for the purpose of
9providing technical assistance to counties.

10

5849.11.  

(a) The counties shall annually report to the
11department on activities funded under this part, including
12information on the funded supportive housing development.
13Reported information shall include location of projects, number
14of units assisted, occupancy restrictions, number of individuals
15and households served, related income levels, and homeless,
16veteran, and mental health status

17(b) The department shall submit a report on the program to the
18Legislature by December 31 of each year, commencing with the
19year after the first full year in which the program is in effect. The
20report shall contain the following:

21(1) The processes established for distributing funds.

22(2) The distribution of funds among counties.

23(3) Any recommendations as to modifications to the program
24for the purpose of improving efficiency or furthering the goals of
25the program.

26(c) The report required to be submitted by subdivision (b) shall
27be submitted in compliance with Section 9795 of the Government
28Code.

29

5849.12.  

(a) Upon an appropriation of funds for the purpose
30of this section, the department shall contract with a public or private
31research university in this state to evaluate the program. The
32department shall develop the research design and issue a request
33for proposal for a contract for the evaluation, with the assistance
34of the Legislative Analyst’s Office and the Department of Finance.

35(b) The department shall submit the final research design and
36request for proposal required by subdivision (a) to the Chairperson
37of the Joint Legislative Budget Committee no more than 30 days
38prior to executing a contract for the evaluation.

39

5849.13.  

An action to determine the legality of any action by
40the department pursuant to this part may be brought pursuant to
P19   1Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of
2the Code of Civil Procedure.

3

5849.14.  

The Department of Finance may authorize a loan
4from the General Fund to the No Place Like Home Fund for
5cashflow purposes in an amount not to exceed one million dollars
6($1,000,000) subject to the following conditions:

7(a) The loan is to allow the department to begin program
8implementation activities, including, but not limited to, drafting
9program guidelines and regulations.

10(b) The loan is short term, and shall be repaid within 30 days
11after the deposit of bond proceeds into the fund pursuant to
12paragraph (1) of subdivision (b) of Section 5849.4.

13(c) Interest charges may be waived pursuant to subdivision (e)
14of Section 16314 of the Government Code.

15

SEC. 4.  

The Legislature finds and declares that this act furthers
16the intent of the Mental Health Services Act, enacted by
17Proposition 63 at the November 2, 2004, statewide general election.

18It is intent of the Legislature that the costs to service the debt
19for the bond authorized by this act shall not impede in any way
20the direct mental health services provided by counties, and that
21the counties shall maximize the use of all available state, federal,
22and local funding sources, including those listed in Section 5849.7
23of the Welfare and Institutions Code, to support direct local mental
24health services.

25

SEC. 5.  

This act is a bill providing for appropriations related
26to the Budget Bill within the meaning of subdivision (e) of Section
2712 of Article IV of the California Constitution, has been identified
28as related to the budget in the Budget Bill, and shall take effect
29immediately.



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