as amended, Committee on Budget.
begin deleteBudget Act of 2016. end delete
This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2016.end delete
begin deletemajority end delete.
Appropriation: begin deleteno end delete.
Fiscal committee: begin deleteno end delete.
State-mandated local program: no.
The people of the State of California do enact as follows:
(a) The Legislature finds and declares that this part is
28consistent with and furthers the purposes of the Mental Health
29Services Act, enacted by Proposition 63 at the November 2, 2004,
30statewide general election, within the meaning of Section 18 of
32(b) The Legislature further finds and declares all of the
34(1) Housing is a key factor for stabilization and recovery to
35occur and results in improved outcomes for individuals living with
36a mental illness.
37(2) Untreated mental illness can increase the risk of
38homelessness, especially for single adults.
P7 1(3) California has the nation’s largest homeless population that
2is disproportionally comprised of women with children, veterans,
3and the chronically homeless.
4(4) California has the largest number of homeless veterans in
5the United States at 24 percent of the total population in our nation.
6Fifty percent of California’s veterans live with serious mental
7illness and 70 percent have a substance use disorder.
8(5) Fifty percent of mothers experiencing homelessness have
9experienced a major depressive episode since becoming homeless
10and 36 percent of these mothers live with post-traumatic stress
11disorder and 41 percent have a substance use disorder.
12(6) Ninety-three percent of supportive housing tenants who live
13with mental illness and substance use disorders voluntarily
14participated in the services offered.
15(7) Adults who receive 2 years of “whatever-it-takes,” or Full
16Service Partnership services, experience a 68 percent reduction in
18(8) For every dollar of bond funds invested in permanent
19supportive housing, the state and local governments can leverage
20a significant amount of additional dollars through tax credits,
21Medicaid health services funding, and other housing development
23(9) Tenants of permanent supportive housing reduced their visits
24to the emergency department by 56 percent, and their hospital
25admissions by 45 percent.
26(10) The cost in public services for a chronically homeless
27Californian ranges from $60,000 to $100,000 annually. When
28housed, these costs are cut in half and some reports show reductions
29in cost of more than 70 percent, including potentially less
30involvement with the health and criminal justice systems.
31(11) Californians have identified homelessness as their top tier
32priority; this measure seeks to address the needs of the most
33vulnerable people within this population.
34(12) Having counties provide mental health programming and
35services is a benefit to the state.
As used in this part, the following definitions shall
23(a) “At risk of chronic homelessness” includes, but is not limited
24to, persons who are at high risk of long-term or intermittent
25homelessness, including persons with mental illness exiting
26institutionalized settings, including, but not limited to, jail and
27mental health facilities, who were homeless prior to admission,
28transition age youth experiencing homelessness or with significant
29barriers to housing stability, and others, as defined in program
36 “Chronically homeless” has the same meaning as defined
37in Section 578.3 of Title 24 of the Code of Federal Regulations,
38as that section read on May 1, 2016.
P9 1(c)end delete
2 “Committee” means the No Place Like Home Program
3Advisory Committee established pursuant to Section 5849.3.
5 “County” includes, but is not limited to, a city and
begin delete county.end delete
8 “Department” means the Department of Housing and
11 “Development sponsor” has the same meaning as “sponsor”
12as defined in Section 50675.2 of the Health and Safety Code.
14 “Fund” means the No Place Like Home Fund established
15pursuant to Section 5849.4.
17 “Homeless” has the same meaning as defined in Section
18578.3 of Title 24 of the Code of Federal Regulations, as that section
19read on May 1, 2016.
21 “Permanent supportive housing” has the same meaning as
22“supportive housing,” as defined in Section 50675.14 of the Health
23and Safety Code, except that “permanent supportive housing” shall
24include associated facilities if used to provide services to housing
27 “Program” means the process for awarding funds and
28distributing moneys to applicants established in Sections 5849.7,
begin delete 5849.9.end delete
32(1) “Competitive program” means that portion of the program
33established by Section 5849.8.
34(2) “Distribution program” means that portion of the program
35described in Section 5849.9.
37 “Target population” means individuals or households as
38provided in Section 5600.3 who are homeless, chronically
39homeless, or at risk of chronic homelessness.
(a) There is hereby established the No Place Like
4Home Program Advisory Committee. Membership on the
5committee shall be as follows:
6(1) The Director of Housing and Community Development, or
7his or her designee, who shall serve as the chairperson of the
9(2) The Director of Health Care Services, or his or her designee,
10and an additional representative.
11(3) The Secretary of Veterans Affairs, or his or her designee.
12(4) The Director of Social Services, or his or her designee.
13(5) The Treasurer, or his or her designee.
14(6) The chair of the Mental Health Services Oversight and
15Accountability Commission, or his or her designee.
16(7) A chief administrative officer of a small county or a member
17of a county board of supervisors of a small county, as provided by
18subdivision (d) of Section
begin delete 5489.6,end delete to be appointed by the
20(8) A chief administrative officer of a large county or a member
21of a county board of supervisors of a large county, as provided by
22subdivision (b) of Section
begin delete 5489.6,end delete to be appointed by the
24(9) A director of a county behavioral health department, to be
25appointed by the Governor.
26(10) An administrative officer of a city, to be appointed by the
28(11) A representative of an affordable housing organization, to
29be appointed by the Speaker of the Assembly.
30(12) A resident of supportive housing, to be appointed by the
32(13) A representative of a community mental health
33organization, to be appointed by the Senate Rules Committee.
34(14) A representative of a local or regional continuum of care
35organization that coordinates homelessness funding, to be
36appointed by the Governor.
37(b) The committee shall do all of the following:
38(1) Assist and advise the department in the implementation of
P11 1(2) Review and make recommendations on the department’s
3(3) Review the department’s progress in distributing moneys
4pursuant to this part.
5(4) Provide advice and guidance more broadly on statewide
(a) The No Place Like Home Fund is hereby created
2within the State Treasury and, notwithstanding Section 13340 of
3the Government Code, continuously appropriated to the
begin delete departmentend delete
4 for the purposes of
begin delete The department may use upend delete to five percent of the
6amount deposited in the fund for administrative
7expenses in implementing this part.
8(b) There shall be paid into the fund the following:
9(1) Any proceeds from the issuance of bonds by the
begin delete Treasurerend delete
11 for the purpose of implementing the program.
12(2) Any other federal or state grant, or from any private donation
13or grant, for the purposes of this part.
14(3) Any interest payment, loan repayments, or other return of
begin delete(a)end delete begin delete end deleteThe department may adopt guidelines or
19regulations, in consultation with the California
21State Association of Counties and other stakeholders, as necessary
22to exercise the powers and perform the duties conferred or imposed
23on it by this part. Any guideline or regulation adopted pursuant to
24this section shall not be subject to the requirements of the
25Administrative Procedure Act (Chapter 3.5 (commencing with
26Section 11340) of Part 1 of Division 3 of Title 2 of the Government
27 Code). The department shall consult with key stakeholders,
28including, but not limited to, counties.
29(b) The department may adopt emergency regulations in order
30to expedite the award of moneys pursuant to this part.
3(a) Theend delete
4department shall administer a
6competitive program, pursuant to Section 5849.8, and distribution
7program, pursuant to Section 5849.9, for awarding a total
begin delete ofend delete
8 two billion dollars ($2,000,000,000) among
9counties to finance capital costs including, but not limited to,
10acquisition, design, construction, rehabilitation, or preservation,
11and to capitalize operating reserves, of permanent supportive
12housing for the target population.
22 For the competitive program established by Section 5849.8,
23the following shall apply:
24(1) A county may apply as the sole applicant if it is the
25development sponsor or jointly with a separate entity as
27(2) Funded developments shall integrate the target population
28with the general public.
29(3) Funded developments shall utilize low barrier tenant
30selection practices that prioritize vulnerable populations and offer
31flexible, voluntary, and individualized supportive services.
32(4) The guidelines may provide for alternative housing models,
33such as shared housing models of fewer than five units. Integration
34requirements may be modified in shared housing.
35(5) Funds shall be offered as deferred payment loans to finance
36capital costs including acquisition, design, construction,
37rehabilitation, or preservation, and to capitalize operating reserves
38of, permanent supportive housing for the target population.
39(6) The department shall adopt guidelines establishing income
40and rent standards.
begin deleteOne end deletebillion eight hundred million dollars
begin delete shall be allocatedend delete from the fund for the purposes
8of the competitive
begin delete program.end delete
10department shall develop a competitive application process for the
11purpose of awarding moneys pursuant to this section. In
12considering applications, the department shall do all of the
14(1) Restrict eligibility to applicants that meet the following
16(A) The county commits to provide mental health supportive
17services and to coordinate the provision of or referral to other
18services, including, but not limited to, substance use treatment
19services, to the tenants of the supportive housing development for
20at least 20 years. Services shall be provided onsite at the supportive
21housing development or in a location otherwise easily accessible
22to tenants. The county may use, but is not restricted to using, any
23of the following available funding sources as allowed by state and
25(i) The Local Mental Health Services Fund established pursuant
26to subdivision (f) of Section 5892.
27(ii) The Mental Health Account within the Local Health Welfare
28Trust Fund established pursuant to Section 17600.10.
29(iii) The Behavioral Health Subaccount within the County Local
30Revenue Fund 2011 established pursuant to paragraph (4) of
31subdivision (f) of Section 30025 of the Government Code.
32(iv) Funds received from other private or public entities.
33(v) Other county funds.
34(B) The county has developed a county plan to combat
35homelessness, which includes a description of homelessness
36countywide, any special challenges or barriers to serving the target
37population, county resources applied to address the issue, available
38community-based resources, an outline of partners and
39collaborations, and proposed solutions.
P16 1(C) Meet other threshold requirements including, but not limited
2to, developer capacity to develop, own, and operate a permanent
3supportive housing development for the target population,
4application proposes a financially feasible development with
5reasonable development costs.
6(2) The department shall evaluate applications using, at
7minimum, the following criteria:
8(A) The extent to which units assisted by the program are
9restricted to persons who are chronically homeless or at risk of
10chronic homelessness within the target population.
11(B) The extent to which funds are leveraged for capital costs.
12(C) The extent to which projects achieve deeper affordability
13through the use of non-state project-based rental assistance,
14operating subsidies, or other funding.
15(D) Project readiness.
16(E) The extent to which applicants offer a range of on and
17off-site supportive services to tenants, including mental health
18services, behavioral health services, primary health, employment,
19and other tenancy support services.
20(F) Past history of implementing programs that use
21evidence-based best practices that have led to the reduction of the
22number of chronic homeless or at risk of chronic homelessness
23individuals within the target population.
24(b) The department may establish an alternative process for
25 allocating 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 to funds in proportion to their share of the
40percentage of the statewide homeless population, as calculated by
P17 1the department in Section 5849.6. Funds not committed to
2supportive housing developments within two years following award
3of funds to counties shall be returned to the state for the purposes
4of the competitive program. The department shall consider the
5following when selecting participating counties:
6(1) Demonstrated ability to finance permanent supportive
7housing with local and federal funds, and monitor requirements
8for the life of the loan.
9(2) Past history of delivering supportive services to the target
10population in housing.
11(3) Past history of committing project-based vouchers to
13(4) Ability to prioritize the most vulnerable within the target
14population through coordinated entry system.
15(c) The department shall set aside 8 percent of funds offered in
16Rounds 1 through 4, inclusive, for
17small counties as provided in subdivision (d) of Section 5849.6.
18(d) The department shall award funds in at least four rounds as follows:
20(1) The department shall issue its first request for proposal for
21the competitive program no later than 180 days after
begin delete any deadline
22for appeals as set forth in Section 870 of the Code of Civil
29(2) The second round shall be completed no later than one year
30after the completion of the first round.
31(3) The third round shall be completed no later than one year
32after the completion of the second round.
33(4) The fourth round shall be completed no later than one year
34after the completion of the third round.
35(5) Subsequent rounds shall occur annually
thereafter in order
36to fully exhaust remaining funds and the department may
37discontinue the use of the competitive groupings in Section 5849.6,
38the alternative process in subdivision (b) for any funds not awarded
39by the county, and the rural set aside funds as set forth in
P18 1(e) (1) Any loans made by the department pursuant to this
2section shall be in the form of secured deferred payment loans to
3pay for the eligible costs of development. Principal and
4accumulated interest is due and payable upon completion of the
5term of the loan, which shall be established through program
6guidelines adopted pursuant to Section 5849.5. The loan shall bear
7simple interest at a rate of three percent per annum on the unpaid
8principal balance. The department shall require annual loan
9payments in the minimum amount necessary to cover the costs of
10project monitoring. For the first 15 years of the loan term, the
11amount of the required loan payments shall not exceed forty-two
12hundredths of 1 percent per annum.
13(2) The department may establish maximum loan-to-value
14requirements for some or all of the types of projects that are eligible
15for funding under this part, which shall be established through
16program guidelines adopted pursuant to Section 5849.5.
17(3) The department shall establish per-unit and per-project loan
18limits for all project types.
19(f) (1) The department may designate an amount not to exceed
20four percent of funds allocated for the competitive program, not
21including funding allocated pursuant to subdivision (b), in order
22 to cure or avert a default on the terms of any loan or other
23obligation by the recipient of financial assistance, or bidding at
24any foreclosure sale where the default or foreclosure sale would
25jeopardize the department’s security in the rental housing
26development assisted pursuant to this part. The funds so designated
27shall be known as the “default reserve.”
28(2) The department may use default reserve funds made
29available pursuant to this section to repair or maintain any rental
30housing development assistance pursuant to this part to protect the
31department’s security interest.
32(3) The payment or advance of funds by the department pursuant
33to this subdivision shall be exclusively within the department’s
34discretion, and no person shall be deemed to have any entitlement
35to the payment or advance of those funds. The amount of any funds
36expended by the department for the purposes of curing or averting
37a default shall be added to the loan amount secured by the rental
38housing development and shall be payable to the department upon
P19 1(g) (1) Prior to disbursement of any funds for loans made
2pursuant this section, the department shall enter into a regulatory
3agreement with the development sponsor that provides for all of
5(A) Sets standards for tenant selection to ensure occupancy of
6assisted units by eligible households of very low and low income
7for the term of the agreement.
8(B) Governs the terms of occupancy agreements.
9(C) Contains provisions to maintain affordable rent levels to
10serve eligible households.
11(D) Provides for periodic inspections and review of year-end
12fiscal audits and related reports by the department.
13(E) Permits a developer to distribute earnings in an amount
14established by the department and based on the number of units
15in the rental housing development.
16(F) Has a term for not less than the original term of the loan.
17(G) Contains any other provisions necessary to carry out the
18purposes of this part.
19(2) The agreement shall be binding upon the developer and
20successors in interest upon sale or transfer of the rental housing
21development regardless of any prepayment of the loan.
22(3) The agreement shall be recorded in the office of the county
23recorder in the county in which the real property subject to the
24agreement is located.
(a) In addition to the competitive program established by
4Section 5849.8, the department
begin delete shallend delete distribute two hundred million dollars ($200,000,000) from the
6fund on an “over-the-counter” basis to finance the construction,
7rehabilitation, or preservation, and to capitalize operating reserves,
8of permanent supportive housing for individuals in the target
9population with a priority for those with mental health supportive
10needs who are homeless or at risk of chronic homelessness. Funds
11to be awarded pursuant to this section shall be available to all
12counties within the state proportionate to the number of homeless
13persons residing within each county as calculated in Section 5849.6
14or in the amount of five hundred thousand dollars ($500,000),
15whichever is greater.
22(b) Funds not awarded within 18 months following the first
23allocation of moneys in accordance with subdivision (d) shall be
24used for the purposes of the competitive program.
25(c) The moneys described in subdivision (a) shall be
26administered either in accordance with the procedures for awarding
27funds to local agencies established by the existing Mental Health
28Services Act housing program administered by the Department of
29Health Care Services and the California Housing Finance Agency
30or alternative procedures developed by the department for
31distributing these moneys that enhance the efficiency and goals of
32the distribution program.
33(d) The department shall make the first allocation of moneys
34pursuant to this section no later than
begin delete 60 days after any deadline for appeals as set
36forth in Section 870 of the Code of Civil Procedure.end delete
(a) The counties shall annually report to the
6department on activities funded under this part, including
7information on the funded supportive housing development.
8Reported information shall include location of projects, number
9of units assisted, occupancy restrictions, number of individuals
10and households served, related income levels, and homeless,
11veteran, and mental health status
12(b) The department shall submit a report on the program to the
13Legislature by December 31 of each year, commencing with the
14year after the first full year in which the program is in effect. The
15report shall contain the following:
16(1) The processes established for distributing funds.
17(2) The distribution of funds among counties.
18(3) Any recommendations as to modifications to the program
19for the purpose of improving efficiency or furthering the goals of
21(c) The report required to be submitted by subdivision (b) shall
22be submitted in compliance with Section 9795 of the Government
An action to determine the legality of any action by
34the department pursuant to this part may be brought pursuant to
35Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of
36the Code of Civil Procedure.
The Department of Finance may authorize
begin delete a loanend delete from the General Fund to the No Place Like Home
9Fund for cashflow purposes in an amount not to exceed
begin delete oneend delete million dollars begin delete ($1,000,000)end delete
subject to the
begin delete loan is toend delete
13 allow the department to begin program implementation
14activities, including, but not limited to, drafting program guidelines
begin delete loan isend delete short term, and shall be repaid within
2430 days after the deposit of bond proceeds into the fund pursuant
25to paragraph (1) of subdivision (b) of Section 5849.4.
26(c) Interest charges may be waived pursuant to subdivision (e)
27of Section 16314 of the Government Code.
(a) The Mental Health Services Fund is hereby created
31in the State Treasury. The fund shall be administered by the state.
32Notwithstanding Section 13340 of the Government Code, all
33moneys in the fund are, except as provided in subdivision (d) of
34Section 5892, continuously appropriated, without regard to fiscal
35years, for the purpose of funding the following programs and other
36related activities as designated by other provisions of this division:
37(1) Part 3 (commencing with Section 5800), the Adult and Older
38Adult System of Care Act.
39(2) Part 3.2 (commencing with Section 5830), Innovative
P23 1(3) Part 3.6 (commencing with Section
5840), Prevention and
2Early Intervention Programs.
6 Part 4 (commencing with Section 5850), the Children’s
7Mental Health Services Act.
8(b) Nothing in the establishment of this fund, nor any other
9provisions of the act establishing it or the programs funded shall
10be construed to modify the obligation of health care service plans
11and disability insurance policies to provide coverage for mental
12health services, including those services required under Section
131374.72 of the Health and Safety Code and Section 10144.5 of the
14Insurance Code, related to mental health parity. Nothing in this
15act shall be construed to modify the oversight duties of the
16Department of Managed Health Care or the duties of the
17Department of Insurance with respect to enforcing these obligations
18of plans and insurance policies.
19(c) Nothing in this act shall be construed to modify or reduce
20the existing authority or responsibility of the State Department of
21Health Care Services.
22(d) The State Department of Health Care Services shall seek
23approval of all applicable federal Medicaid approvals to maximize
24the availability of federal funds and eligibility of participating
25children, adults, and seniors for medically necessary care.
26(e) Share of costs for services pursuant to Part 3 (commencing
27with Section 5800), and Part 4 (commencing with Section 5850)
28of this division, shall be determined in accordance with the
29Uniform Method for Determining Ability to Pay applicable to
30other publicly funded mental health services, unless this Uniform
31Method is replaced by another method of determining co-payments,
32in which case the new method applicable to other mental health
33services shall be applicable to services pursuant to Part 3
34(commencing with Section 5800), and Part 4 (commencing with
35Section 5850) of this division.
(a) The funding established pursuant to this act shall be
21utilized to expand mental health services. Except as provided in
22subdivision (j) of Section 5892 due to the state’s fiscal crisis, these
23funds shall not be used to supplant existing state or county funds
24utilized to provide mental health services. The state shall continue
25to provide financial support for mental health programs with not
26less than the same entitlements, amounts of allocations from the
27General Fund or from the Local Revenue Fund 2011 in the State
28Treasury, and formula distributions of dedicated funds as provided
29in the last fiscal year which ended prior to the effective date of
30this act. The state shall not make any change to the structure of
31financing mental health services, which increases a county’s share
32of costs or financial risk for mental health services unless the state
33includes adequate funding to fully compensate for such increased
34costs or financial risk. These funds shall only be used to pay for
35the programs authorized in
begin delete Sectionend delete 5892. These
36funds may not be used to pay for any other program. These funds
37may not be loaned to the state General Fund or any other fund of
38the state, or a county general fund or any other county fund for
39any purpose other than those authorized by
begin delete Section 5892.end delete
P25 1(b) Notwithstanding subdivision (a), the Controller may use the funds created pursuant
3to this part for loans to the General Fund as provided in Sections
416310 and 16381 of the Government Code. Any such loan shall
5be repaid from the General Fund with interest computed at 110
6percent of the Pooled Money Investment Account rate, with interest
7commencing to accrue on the date the loan is made from the fund.
8This subdivision does not authorize any transfer that would
9interfere with the carrying out of the object for which these funds
17(c) Commencing July 1, 2012, on or before the 15th day of each
18month, pursuant to a methodology provided by the State
19Department of Health Care Services, the Controller shall distribute
20to each Local Mental Health Service Fund established by counties
21pursuant to subdivision (f) of Section 5892, all unexpended and
22unreserved funds on deposit as of the last day of the prior month
23in the Mental Health Services Fund, established pursuant to Section
245890, for the provision of programs and other related activities set
25forth in Part 3 (commencing with Section 5800), Part 3.2
26(commencing with Section 5830), Part 3.6 (commencing with
27Section 5840), and Part 4 (commencing with Section 5850).
28(d) Counties shall base their expenditures on the county mental
29health program’s three-year program and expenditure plan or
30annual update, as required by Section 5847. Nothing in this
31subdivision shall affect subdivision (a) or (b).
It is the intent of the Legislature to enact statutory
2changes relating to the 2016 Budget Act.