AB 1628, as amended, Committee on Budget. No Place Like Home Program: financing.
(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
begin delete 2/3end delete vote, provided
that the amendment is consistent with and furthers the intent of the act.
Existing law, known as the No Place Like Home Program, requires the Department of Housing and Community Development to award $2,000,000,000 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. Existing law requires the department to distribute $1,800,000,000 through a competitive program and to allocate $200,000,000 among all counties within this state on an “over-the-counter” population basis.
The bill would authorize the California Health Facilities Financing Authority and the department to, among other things, enter into contracts to provide services pursuant to the No Place Like Home Program related to permanent supportive housing. The bill would also authorize the authority to issue taxable or tax-exempt revenue bonds in an amount not to exceed $2,000,000,000 for these purposes and to make secured or unsecured loans to the department in connection with financing permanent supportive housing pursuant to the No Place Like Home Program. The bill would require that the dollar limit on amounts distributed under the No Place Like Home Program be based on the principal amount of bonds issued by the authority and loaned to the department.
The bill would additionally authorize the use of moneys in the Mental Health Services Fund for the purposes of the No Place Like Home Program. The bill would also establish and continuously appropriate the Supportive Housing Program Subaccount in the Mental Health Services Fund. The bill would require the Controller, prior to any
begin delete transfer, deposit,end delete or expenditure from the fund for any other begin delete purpose,end delete to transfer from the Mental Health Services Fund to the Supportive Housing Program Subaccount an amount necessary to cover the costs the authority is required to pay to the department pursuant to an above-described service contract, as determined by the authority but not to exceed an aggregate amount of $140,000,000 per year. The bill would prohibit moneys in the Supportive Housing Subaccount from being loaned to the General Fund pursuant to specified statutes.
The bill would exempt service contracts between the department and the authority pursuant to these provisions from specified public contracting laws. The bill would also exempt loan agreements between the department and the authority and revenue bonds issued by the authority from any other law applicable to the execution of those agreements or issuance of those bonds, including the California Environmental Quality Act.
(2) Existing law establishes the No Place Like Home Fund and continuously appropriates the moneys in this fund to the Department of Housing and Community Development for the purposes of the No Place Like Home Program. Existing law requires the deposit into the fund of, among other moneys, any proceeds from the issuance of bonds by the Treasurer.
This bill would instead require the department to deposit into the fund the proceeds of loans derived from the issuance of bonds under this bill by the California Health Facilities Financing Authority. The bill would additionally continuously appropriate moneys in the fund to the Treasurer and the authority for purposes of the No Place Like Home Program.
(3) Existing law requires counties to annually report specified information to the Department of Housing and Community Development on activities funded under the No Place Like Home Program, including information on the funded supportive housing development. Existing law also requires the department to report specified information on the program to the Legislature by December 31 of each year, commencing with the year after the first full year in which the program is in effect.
This bill would require the
department to monitor compliance
begin delete by counties with the grant andend delete loan agreements and regulatory agreements begin delete pursuant to which funds are distributed pursuant to the competitive portion of the No Place Like Home Programend delete and enforce those agreements to the extent necessary and desirable in order to provide, to the greatest degree possible, the successful provision of permanent supportive
housing. The bill would require the department to submit a report to the California Health Facilities Financing Authority by December 31 of each year, commencing with the year after the first full year in which the program is in effect, that contains specified information about the counties participating in the program and the services that have been provided pursuant to any service contracts between the department and the authority, as described above.
(4) Existing law establishes a procedure by which a public agency may bring an action in the superior court to determine the validity of any matter authorized by other law. Existing law authorizes an action under this procedure to determine the legality of any action by the Department of Housing and Community Development related to the No Place Like Home Program. Existing law requires the department to issue its first request for proposal for the competitive program no later than 180 days, and to make its first allocation of “over-the-counter” funds within 60 days, after the deadline for appeals under the validation procedure.
This bill would recast this authorization to instead authorize an action to determine the validity of any service contract or loan agreement between the department and the California Health Facilities Financing Authority, as described above, in accordance with specified provisions governing actions to determine the validity of bonds, warrants, contracts, obligations, or evidences of indebtedness. The bill would instead require the department to issue its first request for proposal no later than 180 days, and to make its first allocation of “over-the-counter” funds as soon as reasonably practical, but no later than 150 days, after the effective date of a final judgment with no further opportunity for appeals, in any court proceeding affirming the validity of the service contracts between the department and the authority and any bonds issued by the authority.
(5) Existing law authorizes the Department of Finance to authorize a loan from the General Fund to the No Place Like Home Fund for cashflow purposes in an amount not to exceed $1,000,000. Existing law requires that a loan comply with certain requirements, including that the purpose of the loan is to allow the department to begin implementation activities related to the No Place Like Home Program, including drafting program guidelines and regulations.
This bill would instead authorize the Department of Finance to authorize one or more loans from the General Fund to the No Place Like Home Fund in an aggregate amount not to exceed $2,000,000. The bill would additionally authorize loans for the purpose of allowing the Department of Housing and Community Development, the California Health Facilities Financing Authority, and the Treasurer to implement the above-described provisions pertaining to service contracts and loan agreements between the department and the authority and revenue bonds issued by the authority.
(6) Existing law makes various findings and declarations regarding the No Place Like Home Program.
This bill would make additional findings and declarations pertaining to the financing and implementation of the No Place Like Home Program. The bill would also make various technical and conforming changes to the No Place Like Home Program.
(7) This bill would declare that its provisions further the intent of the MHSA.
(8) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.
Vote: 2⁄3. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 15463 is added to the Government Code,
(a) For purposes of this section, the following
4definitions shall apply:
5(1) “No Place Like Home Program” has the same meaning as
6“program” as defined in Section 5849.2 of the Welfare and
8(2) “No Place Like Home Fund” means the No Place Like Home
9Fund established pursuant to Section 5849.4 of the Welfare and
11(3) “Permanent supportive housing” has the same meaning as
12“supportive housing” as defined in Section 50675.14 of the Health
13and Safety Code, except that “permanent supportive housing” shall
14include associated facilities if used to provide services to housing
16(b) The authority may issue taxable or tax-exempt revenue bonds
17in an amount not to exceed two billion dollars ($2,000,000,000),
18exclusive of refunding bonds but including any net premium
19derived from the sale of the bonds, pursuant to Sections 15441 to
2015450, inclusive, for the purpose of financing permanent supportive
21housing pursuant to the No Place Like Home Program
begin delete or to refund The authority may also utilize bond proceeds
22bonds previously issued pursuant to this section.end delete
P6 1to fund necessary
begin delete reserves,end delete
2 capitalized interest, credit enhancement or liquidity costs,
begin delete orend delete costs
begin delete issuance.end delete
18 The authority may make secured or unsecured loans to the
19Department of Housing and Community Development in
20connection with financing permanent supportive housing pursuant
21to the No Place Like Home Program or to refund bonds previously
22issued pursuant to this section, in accordance with an agreement
23between the authority and the Department of Housing and
30(d) Theend delete
authority may enter into any agreement for credit
33enhancement or liquidity, execute any instruments, and do any
34other acts it deems necessary, convenient, or desirable in
35connection with revenue bonds issued pursuant to this section or
36carry out any power expressly granted pursuant to this section.
38 (1) This section provides a complete, additional, and
39alternative method for performing the acts authorized by this
40section and shall be construed as supplemental and additional to
P7 1powers conferred by other laws; provided, however, that the
2issuance of the bonds and refunding bonds and the execution of
3any agreements under this section are not subject to, and need not
4comply with, the requirements of any other law applicable to the
5issuance of those bonds or refunding bonds and the execution of
6those agreements, including, but not limited to, the California
7Environmental Quality Act (Division 13 (commencing with Section
821000) of the Public Resources Code).
9(2) Except as provided in paragraph (1),
begin delete theend delete financing
begin delete of permanent supportive housing pursuant to the No Place Like this section shall not exempt the
11Home Program pursuant toend delete
12permanent supportive housing from the requirements of any other
13law otherwise applicable to the
begin delete project.end delete
Section 5849.1 of the Welfare and Institutions Code
16 is amended to read:
(a) The Legislature finds and declares that this part is
18consistent with and furthers the purposes of the Mental Health
19Services Act, enacted by Proposition 63 at the November 2, 2004,
20statewide general election, within the meaning of Section 18 of
22(b) The Legislature further finds and declares all of the
24(1) Housing is a key factor for stabilization and recovery to
25occur and results in improved outcomes for individuals living with
26a mental illness.
27(2) Untreated mental illness can increase the risk of
28homelessness, especially for single adults.
29(3) California has the nation’s largest homeless population that
30is disproportionally comprised of women with children, veterans,
31and the chronically homeless.
32(4) California has the largest number of homeless veterans in
33the United States at 24 percent of the total population in our nation.
34Fifty percent of California’s veterans live with serious mental
35illness and 70 percent have a substance use disorder.
36(5) Fifty percent of mothers experiencing homelessness have
37experienced a major depressive episode since becoming homeless
38and 36 percent of these mothers live with post-traumatic stress
39disorder and 41 percent have a substance use disorder.
P8 1(6) Ninety-three percent of supportive housing tenants who live
2with mental illness and substance use disorders voluntarily
3participated in the services offered.
4(7) Adults who receive 2 years of “whatever-it-takes,” or Full
5Service Partnership services, experience a 68 percent reduction in
7(8) For every dollar of bond funds invested in permanent
8supportive housing, the state and local governments can leverage
9a significant amount of additional dollars through tax credits,
10Medicaid health services funding, and other housing development
12(9) Tenants of permanent supportive housing reduced their visits
13to the emergency department by 56 percent, and their hospital
14admissions by 45 percent.
15(10) The cost in public services for a chronically homeless
16Californian ranges from $60,000 to $100,000 annually. When
17housed, these costs are cut in half and some reports show reductions
18in cost of more than 70 percent, including potentially less
19involvement with the health and criminal justice systems.
20(11) Californians have identified homelessness as their top tier
21priority; this measure seeks to address the needs of the most
22vulnerable people within this population.
23(12) Having counties provide mental health programming and
24services is a benefit to the state.
25(13) The Department of Housing and Community Development
26is the state entity with sufficient expertise to implement and oversee
27a grant or loan program for permanent supportive housing of the
29(14) The California Health Facilities Financing Authority is
30authorized by law to issue bonds and to consult with the Mental
31Health Services Oversight and Accountability Commission and
32the Department of Health Care Services concerning the
33implementation of a grant or loan program for California counties
34to support the development of programs that increase access to,
35and capacity for, crisis mental health services. It is therefore
36appropriate for the authority to issue bonds and contract for services
37with the Department of Housing and Community Development to
38provide grants or loans to California counties for permanent
39 supportive housing for the target population.
P9 1(15) Use of bond funding will accelerate the availability of
2funding for the grant or loan program to provide permanent
3supportive housing for the target population as compared to relying
4on annual allocations from the Mental Health Services Fund and
5better allow counties to provide permanent supportive housing for
6homeless individuals living with mental illness.
7(16) The findings and declarations set forth in subdivision (c)
8of Section 5849.35 are hereby incorporated herein.
Section 5849.2 of the Welfare and Institutions Code
10 is amended to read:
As used in this part, the following definitions shall
13(a) “At risk of chronic homelessness” includes, but is not limited
14to, persons who are at high risk of long-term or intermittent
15homelessness, including persons with mental illness exiting
16institutionalized settings, including, but not limited to, jail and
17mental health facilities, who were homeless prior to admission,
18transition age youth experiencing homelessness or with significant
19barriers to housing stability, and others, as defined in program
21(b) “Authority” means the California Health Facilities Financing
22Authority established pursuant to Part 7.2 (commencing with
23Section 15430) of Division 3 of Title 2 of the Government Code.
24(c) “Chronically homeless” has the same meaning as defined
25in Section 578.3 of Title 24 of the Code of Federal Regulations,
26as that section read on May 1, 2016.
27(d) “Commission” means the Mental Health Services Oversight
28and Accountability Commission established by Section 5845.
29(e) “Committee” means the No Place Like Home Program
30Advisory Committee established pursuant to Section 5849.3.
31(f) “County” includes, but is not limited to, a city and
32and a city receiving funds pursuant to Section 5701.5.
33(g) “Department” means the Department of Housing and
35(h) “Development sponsor” has the same meaning as “sponsor”
36as defined in Section 50675.2 of the Health and Safety Code.
37(i) “Fund” means the No Place Like Home Fund established
38pursuant to Section 5849.4.
P10 1(j) “Homeless” has the same meaning as defined in Section
2578.3 of Title 24 of the Code of Federal Regulations, as that section
3read on May 1, 2016.
4(k) “Permanent supportive housing” has the same meaning as
5“supportive housing,” as defined in Section 50675.14 of the Health
6and Safety Code, except that “permanent supportive housing” shall
7include associated facilities if used to provide services to housing
9(l) “Program” means the process for awarding funds and
10distributing moneys to applicants established in Sections 5849.7,
115849.8, and 5849.9 and the ongoing monitoring and enforcement
12of the applicants’ activities pursuant to
begin delete Sectionend delete 5849.8,
135849.9, and 5849.11.
14(1) “Competitive program” means that portion of the program
15established by Section 5849.8.
16(2) “Distribution program” means that portion of the program
17described in Section 5849.9.
18(m) “Target population” means individuals or households as
19provided in Section 5600.3 who are homeless, chronically
20homeless, or at risk of chronic homelessness.
Section 5849.3 of the Welfare and Institutions Code
22 is amended to read:
(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
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.
begin delete chairend delete of the Mental Health Services Oversight
35and Accountability 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 5849.6, to be appointed by the Governor.
P11 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 5849.6, 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
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
12(13) A representative of a community mental health
13organization, to be appointed by the Senate
begin delete Rules Committee.end delete
15(14) A representative of a local or regional continuum of care
16organization that coordinates homelessness funding, to be
17appointed by the Governor.
18(b) The committee shall do all of the following:
19(1) Assist and advise the department in the implementation of
21(2) Review and make recommendations on the department’s
23(3) Review the department’s progress in distributing moneys
24pursuant to this part.
25(4) Provide advice and guidance more broadly on statewide
Section 5849.35 is added to the Welfare and
28Institutions Code, to read:
(a) The authority may do all of the following:
30(1) Consult with the commission and the Department of
31Health Care Services concerning the implementation of the No
32Place Like Home Program, including the review of annual reports
33provided to the authority by the department pursuant to Section
35(2) Enter into one or more contracts with the department for the
36department to provide, and the authority to pay the department for
37providing, services described in Sections
begin delete 5849,7,end delete 5849.8,
38and 5849.9, related to permanent supportive housing for the target
39population. Prior to entering into any contract pursuant to this
40 paragraph, the executive director of the authority shall transmit a copy of the contract
begin delete approved by the authority The contract shall
2to the commission.end delete
3be deemed approved by the commission unless it acts within 10
4days to disapprove the contract.
5(3) On or before June 15 and December 15 of each year, the
begin delete notifyend delete the Controller begin delete ofend delete the amounts the
7authority is required to pay as provided in Section 5890 for the
8following six month period to the department pursuant to any
9service contract entered into pursuant to paragraph (2).
10(b) The department may do all of the following:
11(1) Enter into one or more contracts with the authority to provide
12services described in
begin delete Sectionend delete 5849.7, 5849.8, and 5849.9,
13related to permanent supportive housing for the target population.
14Payments received by the department under any service contract
15authorized by this paragraph shall be used, prior to any other
16allocation or distribution, to repay loans from the authority pursuant
17to Section 15463 of the Government Code.
18(2) Enter into one or more loan agreements with the authority
19as security for the repayment of the revenue bonds issued by the
20authority pursuant to Section 15463 of the Government Code. The
21department shall deposit the proceeds of these loans, excluding
begin delete relating to refundingend delete bonds, into the fund. The department’s begin delete obligation to repayend delete
begin delete loansend delete
25 shall be limited
begin delete toend delete amounts
26received pursuant to its service contracts with the authority.
27(3) The department may assign its right to receive
28 payments under the service contracts entered
29into pursuant to paragraph (1) directly to the authority or its bond
begin delete trustee, which may be the Treasurer.end delete
33(c) The Legislature hereby finds and declares both of the
35(1) The consideration to be paid by the authority to the
36department for the services provided pursuant to the contracts
37authorized by paragraph (2) of subdivision (a) and paragraph (1)
38of subdivision (b) is fair and reasonable and in the public interest.
39(2) The service contracts and payments made by the authority
40to the department pursuant to a service contract authorized by
P13 1paragraph (2) of subdivision (a) and paragraph (1) of subdivision
2(b) and the loan agreements and loan repayments made by the
3department to the authority pursuant to a loan agreement authorized
4by paragraph (2) of subdivision (b) shall not constitute a debt or
5liability, or a pledge of the faith and credit, of the state or any
7(d) The state hereby covenants with the holders from time to
8time of any bonds issued by the authority pursuant to Section 15463
9of the Government Code that it will not alter, amend, or restrict
10the provisions of this section, subdivision (f) of Section 5890, or
11subdivision (b) of Section 5891 in any manner adverse to the
12interests of those bondholders so long as any of those bonds remain
13outstanding. The authority may include this covenant in the
14resolution, indenture, or other documents governing the bonds.
15(e) Agreements under this section are not subject to, and need
16not comply with, the requirements of any other law applicable to
17the execution of those agreements, including, but not limited to,
18the California Environmental Quality Act (Division 13
19(commencing with Section 21000) of the Public Resources Code).
20(f) Part 2 (commencing with Section 10290) of Division 2 of
21the Public Contract Code shall not apply to any contract entered
22into between the authority and the department under this section.
Section 5849.4 of the Welfare and Institutions Code
24 is amended to read:
(a) The No Place Like Home Fund is hereby created
26within the State Treasury and, notwithstanding Section 13340 of
27the Government Code, continuously appropriated to the
28department, the authority, and the Treasurer for the purposes of
29this part. Up to
begin delete fiveend delete percent of the amount deposited in
31the fund may be used for administrative expenses in implementing
33(b) There shall be paid into the fund the following:
34(1) Any moneys from the receipt of loan proceeds by the
35department derived from the issuance of bonds by the authority
begin delete for the purpose of implementing the program.end delete
38(2) Any other federal or state grant, or from any private donation
39or grant, for the purposes of this part.
P14 1(3) Any interest payment, loan repayments, or other return of
Section 5849.5 of the Welfare and Institutions Code
4 is amended to read:
The department may adopt guidelines or regulations,
6including emergency regulations to expedite the award of moneys
7pursuant to this part, in consultation with the California State
8Association of Counties and other stakeholders, as necessary to
9exercise the powers and perform the duties conferred or imposed
10on it by this part. Any guideline or regulation adopted pursuant to
11this section shall not be subject to the requirements of the
12Administrative Procedure Act (Chapter 3.5 (commencing with
13Section 11340) of Part 1 of Division 3 of Title 2 of the Government
14 Code). The department shall consult with key stakeholders,
15including, but not limited to, counties.
Section 5849.7 of the Welfare and Institutions Code
17 is amended to read:
(a) In order to finance permanent supportive housing
19for the target population, the department may enter into one or
20more contracts with the authority as authorized pursuant to Section
215849.35 to provide services for the benefit of the people of the
22state as described in this section and Sections 5849.8 and 5849.9.
23The department shall use its best efforts to provide or cause to be
24provided permanent supportive housing for the target population
25in consideration for service contract payments to be received from
begin deleteIn furtherance of its service obligations under end deleteany
28service contract with the authority, the department shall administer
29a competitive program, pursuant to Section 5849.8, and distribution
30program, pursuant to Section 5849.9, for awarding a total amount
31not to exceed two billion dollars ($2,000,000,000) among counties
32to finance capital costs including, but not limited to, acquisition,
33design, construction, rehabilitation, or preservation, and to
34capitalize operating reserves, of permanent supportive housing for
35the target population. For purposes of this section and
begin delete Sectionend delete
36 5849.8 and 5849.9, measurement of the dollar limit on
37amounts to be distributed by the department shall be based on the
38principal amount of bonds issued by the authority and loaned to
39the department, exclusive of any refunding bonds but including
40any net premium derived from the sale of the bonds, for deposit
P15 1in the fund. There shall be no dollar limit on the distribution of
2moneys in the fund derived from the sources described in
3paragraphs (2) and (3) of subdivision (b) of Section 5849.4.
4(c) For the competitive program established by Section 5849.8,
5the following shall apply:
6(1) A county may apply as the sole applicant if it is the
7development sponsor or jointly with a separate entity as
9(2) Funded developments shall integrate the target population
10with the general public.
11(3) Funded developments
shall utilize low barrier tenant
12selection practices that prioritize vulnerable populations and offer
13flexible, voluntary, and individualized supportive services.
14(4) The guidelines may provide for alternative housing models,
15such as shared housing models of fewer than five units. Integration
16requirements may be modified in shared housing.
17(5) Funds shall be offered as deferred payment loans to finance
18capital costs including acquisition, design, construction,
19rehabilitation, or preservation, and to capitalize operating reserves
20of, permanent supportive housing for the target population.
21(6) The department shall adopt guidelines establishing income
22and rent standards.
Section 5849.8 of the Welfare and Institutions Code
24 is amended to read:
begin deleteIn furtherance of the department’s obligations to any service contract entered into
26the authority under end delete
27pursuant to Section 5849.35, the department may allocate an
28amount not to exceed one billion eight hundred million dollars
29($1,800,000,000) from the fund for the purposes of the competitive
30program described in this subdivision and the alternative process
31described in subdivision (b). The department shall develop a
32competitive application process for the purpose of awarding
33moneys pursuant to this section. In considering applications, the
34department shall do all of the following:
35(1) Restrict eligibility to applicants that meet the following
37(A) The county commits to provide mental health supportive
38services and to coordinate the provision of or referral to other
39services, including, but not limited to, substance use treatment
40services, to the tenants of the supportive housing development for
P16 1at least 20 years. Services shall be provided onsite at the supportive
2housing development or in a location otherwise easily accessible
3to tenants. The county may use, but is not restricted to using, any
4of the following available funding sources as allowed by state and
6(i) The Local Mental Health Services Fund established pursuant
7to subdivision (f) of Section 5892.
8(ii) The Mental Health Account within the Local Health Welfare
9Trust Fund established pursuant to Section 17600.10.
10(iii) The Behavioral Health Subaccount within the County Local
11Revenue Fund 2011 established pursuant to paragraph (4) of
12subdivision (f) of Section 30025 of the Government Code.
13(iv) Funds received from other private or public entities.
14(v) Other county funds.
15(B) The county has developed a county plan to combat
16homelessness, which includes a description of homelessness
17countywide, any special challenges or barriers to serving the target
18population, county resources applied to address the issue, available
19community-based resources, an outline of partners and
20collaborations, and proposed solutions.
21(C) Meet other threshold requirements including, but not limited
22to, developer capacity to develop, own, and operate a permanent
23supportive housing development for the target population,
24application proposes a financially feasible development with
25reasonable development costs.
26(2) The department shall evaluate applications using, at
27minimum, the following criteria:
28(A) The extent to which units assisted by the program are
29restricted to persons who are chronically homeless or at risk of
30chronic homelessness within the target population.
31(B) The extent to which funds are leveraged for capital costs.
32(C) The extent to which projects achieve deeper affordability
33through the use of non-state project-based rental assistance,
34operating subsidies, or other funding.
35(D) Project readiness.
36(E) The extent to which applicants offer a range of
begin delete onend delete
37 and off-site supportive services to tenants, including mental health
38services, behavioral health services, primary health, employment,
39and other tenancy support services.
P17 1(F) Past history of implementing programs that use
2evidence-based best practices that have led to the reduction of the
3number of chronic homeless or at risk of chronic homelessness
4individuals within the target population.
5(b) The department may establish an alternative process for
6 allocating funds directly to counties, as calculated in Section
75849.6, with at least
begin delete fiveend delete percent of the state’s homeless
8population and that demonstrate the capacity to directly administer
9loan funds for permanent supportive housing serving the target
10population and the ability to prioritize individuals with mental
11health supportive needs who are homeless or at risk of chronic
12homelessness, consistent with this part and as determined by the
13department. The department shall adopt guidelines establishing
14the parameters of an alternative process, if any, and requirements
15for local administration of funds, including, but not limited to,
16project selection process, eligible use of funds, loan terms, rent
17and occupancy restrictions, provision of services, and reporting
18and monitoring requirements. Counties participating in the
19alternative process shall not be eligible for the competitive process
20and shall be limited to funds in proportion to their share of the
21percentage of the statewide homeless population, as calculated by
22the department in Section 5849.6. Funds not committed to
23supportive housing developments within two years following award
24of funds to counties shall be returned to the state for the purposes
25of the competitive program. The department shall consider the
26following when selecting participating counties:
27(1) Demonstrated ability to finance permanent supportive
28housing with local and federal funds, and monitor requirements
29for the life of the loan.
30(2) Past history of
delivering supportive services to the target
31population in housing.
32(3) Past history of committing project-based vouchers to
34(4) Ability to prioritize the most vulnerable within the target
35population through coordinated entry system.
36(c) The department shall set aside 8 percent of funds offered in
37Rounds 1 through 4, inclusive, for the competitive program for
38small counties as provided in subdivision (d) of Section 5849.6.
39(d) The department shall award funds for the competitive
40program in at least four rounds as follows:
P18 1(1) The department shall issue its first request for proposal
2the competitive program no later than 180 days after the effective
3date of a final judgment, with no further opportunity for appeals,
4in any court proceeding affirming the validity of the contracts
5authorized by the authority and the department pursuant to Section
65849.35 and any bonds authorized to be issued by the authority
7pursuant to Section 15463 of the Government Code and any
8contracts related to those bonds.
9(2) The second round shall be completed no later than one year
10after the completion of the first round.
11(3) The third round shall be completed no later than one year
12after the completion of the second round.
13(4) The fourth round shall be completed no later than one year
14after the completion of the third round.
15(5) Subsequent rounds shall occur annually thereafter in order
16to fully exhaust remaining funds and the department may
17discontinue the use of the competitive groupings in Section 5849.6,
18the alternative process in subdivision (b) for any funds not awarded
19by the county, and the rural set aside funds as set forth in
21(e) (1) Any loans made by the department pursuant to this
22section shall be in the form of secured deferred payment loans to
23pay for the eligible costs of development.
begin delete Principalend delete and accumulated interest is due and payable begin delete uponend delete completion of the term of the loan, which shall be
26established through program guidelines adopted pursuant to Section
275849.5. The loan shall bear simple interest at a rate of
begin delete threeend delete
28 percent per annum on the unpaid principal balance. The department
29shall require annual loan payments in the minimum amount
30necessary to cover the costs of project monitoring. For the first 15
31years of the loan term, the amount of the required loan payments
32shall not exceed forty-two hundredths of 1 percent per annum.
33(2) The department may establish maximum loan-to-value
34requirements for some or all of the types of projects that are eligible
35for funding under this part, which shall be established through
36program guidelines adopted pursuant to Section 5849.5.
37(3) The department shall establish per-unit and per-project loan
38limits for all project types.
39(f) (1) The department may designate an amount not to exceed
begin delete fourend delete percent of funds allocated for the competitive program, not
P19 1including funding allocated pursuant to subdivision (b), in order
2to cure or avert a default on the terms of any loan or other
3obligation by the recipient of financial assistance, or bidding at
4any foreclosure sale where the default or foreclosure sale would
5jeopardize the department’s security in the rental housing
6development assisted pursuant to this part. The funds so designated
7shall be known as the “default reserve.”
8(2) The department may use default reserve funds made
9available pursuant to this section to repair or maintain any rental
10housing development assistance pursuant to this part to protect the
11department’s security interest.
12(3) The payment or advance of funds by the department pursuant
13to this subdivision shall be exclusively within the department’s
14discretion, and no person shall be deemed to have any entitlement
15to the payment or advance of those funds. The amount of any funds
16expended by the department for the purposes of curing or averting
17a default shall be added to the loan amount secured by the rental
18housing development and shall be payable to the department upon
20(g) (1) Prior to disbursement of any funds for loans made
21pursuant this section, the department shall enter into a regulatory
22agreement with the development sponsor that provides for all of
24(A) Sets standards for tenant selection to ensure occupancy of
25assisted units by eligible households of very low and low income
26for the term of the agreement.
27(B) Governs the terms of occupancy agreements.
28(C) Contains provisions to maintain affordable rent levels to
29serve eligible households.
30(D) Provides for periodic inspections and review of year-end
31fiscal audits and related reports by the department.
32(E) Permits a developer to distribute earnings in an amount
33established by the department and based on the number of units
34in the rental housing development.
35(F) Has a term for not less than the original term of the loan.
36(G) Contains any other provisions necessary to carry out the
37purposes of this part.
38(2) The agreement shall be binding upon the developer and
39successors in interest upon sale or transfer of the rental housing
40development regardless of any prepayment of the loan.
P20 1(3) The agreement shall be recorded in the office of the county
2recorder in the county in which the real property subject to the
3agreement is located.
4(h) (1) The department shall monitor compliance
begin delete by
5counties of the grant andend delete
6 loan agreements and regulatory agreements
begin delete pursuant to which the
7funds are distributed pursuant to this section, and to whichend delete
begin delete may beend delete a begin delete third partyend delete beneficiary, and
10enforce those agreements to the extent necessary
11and desirable in order to provide, to the greatest degree possible,
12the successful provision of permanent supportive housing.
13(2) The department shall annually report to the authority the
14status of its efforts pursuant to this section and Section 5849.9, as
15set forth in Section 5849.11.
16(i) The department may provide technical assistance to counties
17or developers of supportive housing to facilitate the construction
18of permanent supportive housing for target
begin delete populations.end delete
Section 5849.9 of the Welfare and Institutions Code
21 is amended to read:
begin deleteIn furtherance of the department’s obligations to any service contract entered into under
23the authority under end delete
24Section 5849.35, in addition to the competitive program established
25by Section 5849.8, the department may distribute an amount not
26to exceed two hundred million dollars ($200,000,000) from the
27fund on an “over-the-counter” basis to finance the construction,
28rehabilitation, or preservation, and to capitalize operating reserves,
29of permanent supportive housing for individuals in the target
30population with a priority for those with mental health supportive
31needs who are homeless or at risk of chronic homelessness. Funds
32to be awarded pursuant to this section shall be available to all
33counties within the state proportionate to the number of homeless
34persons residing within each county as calculated in Section 5849.6
35or in the amount of five hundred thousand dollars ($500,000),
36whichever is greater. A county receiving these funds shall commit
37to provide mental health supportive services and coordinate the
38provision of, or referral to, other services, including, but not limited
39to, substance abuse treatment services, to the tenants of the
40supportive housing development for at least 20 years. Services
P21 1shall be provided onsite at the supportive housing development or
2at a location otherwise easily accessible to the tenants.
3(b) Funds not awarded within 18 months following the first
4allocation of moneys in accordance with subdivision (d) shall be
5used for the purposes of the competitive program.
6(c) The moneys described in subdivision (a) shall be
7administered either in accordance with the procedures for awarding
8funds to local agencies established by the existing Mental Health
9Services Act housing program administered by the
10 Department of Health Care Services and the California Housing
11Finance Agency or alternative procedures developed by the
12department for distributing these moneys that enhance the
13efficiency and goals of the distribution program.
14(d) The department shall make the first allocation of moneys
15pursuant to this section as soon as reasonably practical and in any
16event no later than 150 days after the effective date of a final
17judgment, with no further opportunity for appeals, in any court
18proceeding affirming the validity of the contracts authorized by
19the authority and the department pursuant to Section 5849.35 and
20 any bonds authorized to be issued by the authority pursuant to
21Section 15463 of the Government Code and any contracts related
22to those bonds.
Section 5849.11 of the Welfare and Institutions Code
24 is amended to read:
(a) The counties shall annually report to the
26department on activities funded under this part, including
27information on the funded supportive housing development.
28Reported information shall include location of projects, number
29of units assisted, occupancy restrictions, number of individuals
30and households served, related income levels, and homeless,
31veteran, and mental health
begin delete statusend delete
32(b) The department shall submit a report on the program to the
33Legislature by December 31 of each year, commencing with the
34year after the first full year in which the program is in effect. The
35report shall contain the following:
36(1) The processes established for distributing funds.
37(2) The distribution of funds among counties.
38(3) Any recommendations as to modifications to the program
39for the purpose of improving efficiency or furthering the goals of
P22 1(c) The report required to be submitted by subdivision (b) shall
2be submitted in compliance with Section 9795 of the Government
4(d) The department shall submit a report to the authority by
5December 31 of each year, commencing with the year after the
6first full year in which the program is in effect, that contains the
7information described in subdivision (a) and paragraphs (1) and
8(2) of subdivision (b) for all counties participating in the program
9and the services that have been provided pursuant to any service
10contracts entered into pursuant to Section 5849.35.
Section 5849.13 of the Welfare and Institutions Code
12 is repealed.
Section 5849.13 is added to the Welfare and
14Institutions Code, to read:
An action to determine the validity of any contract
16or loan authorized pursuant to Section 5849.35 or of any bond
17authorized to be issued pursuant to Section 15463 of the
18Government Code, and any contracts related to those bonds, may
19be brought in accordance with Section 17700 of the Government
Section 5849.14 of the Welfare and Institutions Code
22 is amended to read:
The Department of Finance may authorize one or
24more loans from the General Fund to the No Place Like Home
25Fund for cashflow purposes in an aggregate amount not to exceed
26two million dollars ($2,000,000) subject to the following
28(a) The loans are for either of the following purposes:
29(1) To allow the department to begin program implementation
30activities, including, but not limited to, drafting program guidelines
32(2) To allow the department, the authority, and the Treasurer
33to implement Section 5849.35 of this Code and Section 15463 of
34the Government Code, including, but not limited to, payment for
35financial advisory and legal services to prepare for, and in
36connection with, any validation action pursuant to Section 5849.13
37or any other court action regarding this part or Section 15463 of
38the Government Code.
P23 1(b) The loans are short term, and shall be repaid within 30 days
2after the deposit of bond proceeds into the fund pursuant to
3paragraph (1) of subdivision (b) of Section 5849.4.
4(c) Interest charges may be waived pursuant to subdivision (e)
5of Section 16314 of the Government Code.
Section 5890 of the Welfare and Institutions Code is
7amended to read:
(a) The Mental Health Services Fund is hereby created
9in the State Treasury. The fund shall be administered by the state.
10Notwithstanding Section 13340 of the Government Code, all
11moneys in the fund are, except as provided in subdivision (d) of
12Section 5892, continuously appropriated, without regard to fiscal
13years, for the purpose of funding the following programs and other
14related activities as designated by other provisions of this division:
15(1) Part 3 (commencing with Section 5800), the Adult and Older
16Adult System of Care Act.
17(2) Part 3.2 (commencing with Section 5830), Innovative
19(3) Part 3.6 (commencing with Section 5840), Prevention and
20Early Intervention Programs.
21(4) Part 3.9 (commencing with Section 5849.1), No Place Like
23(5) Part 4 (commencing with Section 5850), the Children’s
24Mental Health Services Act.
25(b) Nothing in the establishment of this fund, nor any other
26provisions of the act establishing it or the programs funded shall
27be construed to modify the obligation of health care service plans
28and disability insurance policies to provide coverage for mental
29health services, including those services required under Section
301374.72 of the Health and Safety Code and Section 10144.5 of the
31Insurance Code, related to mental health parity. Nothing in this
32act shall be construed to modify the oversight duties of the
33Department of Managed Health Care or the duties of the
34Department of Insurance with respect to enforcing these obligations
35of plans and insurance policies.
36(c) Nothing in this act shall be construed to modify or reduce
37the existing authority or responsibility of the State Department of
38Health Care Services.
39(d) The State Department of Health Care Services shall seek
40approval of all applicable federal Medicaid approvals to maximize
P24 1the availability of federal funds and eligibility of participating
2children, adults, and seniors for medically necessary care.
3(e) Share of costs for services pursuant to Part 3
begin delete 5800),end delete and Part 4 (commencing with Section
55850) of this division, shall be determined in accordance with the
begin delete forend delete Determining Ability to Pay applicable to
7other publicly funded mental health services, unless this Uniform
8Method is replaced by another method of determining co-payments,
9in which case the new method applicable to other mental health
10services shall be applicable to services pursuant to Part 3
11(commencing with Section
begin delete 5800),end delete and Part 4 (commencing
12with Section 5850) of this division.
13(f) The Supportive Housing Program Subaccount is hereby
14created in the Mental Health Services Fund. Notwithstanding
15Section 13340 of the Government Code, all moneys in the
16subaccount are continuously appropriated, without
17regard to fiscal years, to the California Health Facilities Financing
18Authority to provide funds to meet its financial obligations pursuant
19to any service contracts entered into pursuant to Section 5849.35.
20Notwithstanding any other law, including any other provision of
begin delete starting on the firstend delete day of each
22month, the Controller shall, prior to any
begin delete transfer, deposit,end delete
23 or expenditure from the fund for any other
begin delete purpose,end delete transfer from the Mental Health Services
25Fund to the Supportive Housing Program Subaccount an amount
26which has been certified by the California Health Facilities
27Financing Authority pursuant to paragraph (3) of subdivision (a)
28of Section 5849.35, but not to exceed an aggregate amount of one
29hundred forty million ($140,000,000) per year. If in any month
30the amounts in the subaccount
32are insufficient to fully pay the amount certified by the California
33Health Facilities Financing Authority, the shortfall shall be carried
34over to the next month. Moneys in the Supportive Housing
35 Subaccount shall not be loaned the General Fund
begin delete Sectionsend delete 16310 or 16381 of the Government
Section 5891 of the Welfare and Institutions Code is
39amended to read:
(a) The funding established pursuant to this act shall be
2utilized to expand mental health services. Except as provided in
3subdivision (j) of Section 5892 due to the state’s fiscal crisis, these
4funds shall not be used to supplant existing state or county funds
5utilized to provide mental health services. The state shall continue
6to provide financial support for mental health programs with not
7less than the same entitlements, amounts of allocations from the
8General Fund or from the Local Revenue Fund 2011 in the State
9Treasury, and formula distributions of dedicated funds as provided
10in the last fiscal year which ended prior to the effective date of
11this act. The state shall not make any change to the structure of
12financing mental health services, which increases a county’s share
13of costs or financial risk for mental health services unless the state
14includes adequate funding to fully compensate for such increased
15costs or financial risk. These funds shall only be used to pay for
16the programs authorized in Sections 5890 and 5892. These funds
17may not be used to pay for any other program. These funds may
18not be loaned to the
begin delete stateend delete General Fund or any other fund of the
19state, or a county general fund or any other county fund for any
20purpose other than those authorized by
begin delete Sectionend delete 5890 and
22(b) (1) Notwithstanding
subdivision (a), and except as provided
23in paragraph (2), the Controller may use the funds created pursuant
24to this part for loans to the General Fund as provided in Sections
2516310 and 16381 of the Government Code. Any such loan shall
26be repaid from the General Fund with interest computed at 110
27percent of the Pooled Money Investment Account rate, with interest
28commencing to accrue on the date the loan is made from the fund.
29This subdivision does not authorize any transfer that would
30interfere with the carrying out of the object for which these funds
32(2) This subdivision does not apply to the Supportive Housing
33Program Subaccount created by subdivision (f) of Section 5890
34or any moneys paid by the California Health Facilities Financing
35Authority to the Department of Housing and Community
36Development as a service fee pursuant to a service contract
37authorized by Section 5849.35.
38(c) Commencing July 1, 2012, on or before the 15th day of each
39month, pursuant to a methodology provided by the State
40Department of Health Care Services, the Controller shall distribute
P26 1to each Local Mental Health Service Fund established by counties
2pursuant to subdivision (f) of Section 5892, all unexpended and
3unreserved funds on deposit as of the last day of the prior month
4in the Mental Health Services Fund, established pursuant to Section
55890, for the provision of programs and other related activities set
6forth in Part 3 (commencing with Section 5800), Part 3.2
7(commencing with Section 5830), Part 3.6 (commencing with
8Section 5840), and
9Part 4 (commencing with Section 5850).
10(d) Counties shall base their expenditures on the county mental
11health program’s three-year program and expenditure plan or
12annual update, as required by Section 5847. Nothing in this
13subdivision shall affect subdivision (a) or (b).
The Legislature finds and declares that this act
15furthers the intent of the Mental Health Services Act, enacted by
16Proposition 63 at the November 2, 2004, statewide general election.
This act is a bill providing for appropriations related
18to the Budget Bill within the meaning of subdivision (e) of Section
1912 of Article IV of the California Constitution, has been identified
20as related to the budget in the Budget Bill, and shall take effect