BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 2017 (McCarty) - College Mental Health Services Program
          
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          |Version: May 27, 2016           |Policy Vote: HEALTH 8 - 0, ED.  |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 8, 2016    |Consultant: Brendan McCarthy    |
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          This bill meets the criteria for referral to the Suspense File.

          Bill  
          Summary:  AB 2017 would appropriate $40 million per year from  
          the Mental Health Services Act Fund to provide grant funds to  
          public postsecondary schools for mental health services.


          Fiscal  
          Impact:  
           Ongoing costs of $40 million per year to provide grant funds  
            to public college campuses (Mental Health Services Act Fund). 

           One-time costs of $240,000 and ongoing costs of $365,000 per  
            year for the Department of Health Care Services to provide  
            technical assistance to grantees and to oversee the operation  
            of the program (Mental Health Services Act Fund).

           Ongoing costs likely between $1 million and $2 million per  
            year for the California Mental Health Services Authority to  
            develop grant guidelines, review grant applications, and  
            provide technical assistance to college campuses (Mental  
            Health Service Act Fund).







          AB 2017 (McCarty)                                      Page 1 of  
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           Unknown costs to public college campuses to put up matching  
            funds to receive grants under the bill (General Fund or  
            special funds). The bill would require public college campuses  
            that apply for funding to agree to provide a dollar-for-dollar  
            match or another match determined by the California Mental  
            Health Services Authority. Depending on the match requirement  
            required by the Authority, and the extent to which colleges  
            could count existing program funds for the match requirement,  
            the bill could impose additional costs on public college  
            campuses.


          Background:  The Mental Health Services Act (Proposition 63 of 2004)  
          imposes an additional 1% personal income tax on incomes over $1  
          million. Most of the funding from the Mental Health Services Act  
          is transferred to counties to provide support for mental health  
          services. The Mental Health Services Act limits state  
          administrative spending to 5% of revenues. Counties are required  
          to prepare three-year program and expenditure plans (with annual  
          updates) and to submit those plans to the state. In addition,  
          under direction from the Department of Health Care Services,  
          counties are required to develop annual revenue and expenditure  
          reports. In 2015-16, projected Mental Health Services Act  
          revenues are $1.8 billion. 
          In 2007, the Mental Health Services Act Oversight and  
          Accountability Commission approved $60 million in statewide  
          initiative funds for the Student Mental Health Initiative for  
          prevention and early invention programs at K-12 schools and  
          colleges.


          The California Mental Health Services Authority is a  
          county-created joint powers authority created to fund mental  
          health programs, including implementation the Student Mental  
          Health Initiative.




          Proposed Law:  
            AB 2017 would appropriate $40 million per year from the Mental  
          Health Services Act Fund in order to provide grant funds to  
          public postsecondary schools for mental health services.








          AB 2017 (McCarty)                                      Page 2 of  
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          Specific provisions of the bill would:
           Make a legislative finding that the bill is consistent with  
            the Mental Health Services Act, amongst other findings;
           Establish the College Mental Health Services Trust Account and  
            continuously appropriate funds in that account for the  
            purposes of the bill;
           Beginning on July 1, 2017, require that $40 million be  
            transferred from the Mental Health Services Act fund to the  
            new special fund each year;
           Require the Department of Health Care Services and the  
            California Mental Health Services Authority to create a grant  
            program for public colleges and universities to improve mental  
            health programs;
           Require the California Mental Health Services Authority to  
            create grant guidelines for the program, with specified  
            requirements;
           Require applying colleges to submit grant applications to the  
            California Mental Health Services Authority;
           Give the California Mental Health Services Authority the  
            authority to approve grant applications and require the  
            Department to provide grant funding in accordance with the  
            Authority's determinations;
           Require grant funding to be proportional to student  
            populations in each segment and limit total grant amounts for  
            any campus to $5 million;
           Require campuses to provide dollar-for-dollar matching funds  
            or a matching requirement approved by the California Mental  
            Health Services Authority;
           Limit administrative costs to 5% of a grant amount and limit  
            Department of Health Care Services administrative costs to 5%  
            of total program funds;
           Prohibit grant funds from being used to supplant existing  
            funds for mental health services;
           Require grantees to provide specified reports;
           Require the Department to develop an evaluation plan and  
            submit a report to the Legislature by February 1, 2021;
           Sunset the bill on January 1, 2022.


          Related  
          Legislation:  
           AB (Cooley) 2279 would require the Department of Health Care  
            Services to collect and publicly report specified information  
            regarding Mental Health Services Act revenues and expenditures  








          AB 2017 (McCarty)                                      Page 3 of  
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            made by counties. That bill will be heard in this committee.
           AB 1618 (Committee on Budget, Statutes of 2016) establishes a  
            program for the Department of Housing and Community  
            Development to distribute $2 billion in funding for permanent  
            supportive housing for individuals eligible for services under  
            the Mental Health Services Act (Proposition 63). Funding for  
            this program will come from a securitization of future Mental  
            Health Services Act tax revenues.


          Staff  
          Comments:  Under current law, almost all Mental Health Services  
          Act funding is distributed directly to counties for expenditure  
          on mental health programs. Although there is a level of  
          oversight performed by the Mental Health Services Oversight and  
          Accountability Commission and the Department of Health Care  
          Services, primary responsibility for determining how Mental  
          Health Services Act funds are spent is a county responsibility.  
          This bill would take $40 million per year away from those county  
          operated programs and instead require a county-created joint  
          powers authority to determine how to allocate those funds  
          amongst public colleges. There does not seem to be anything in  
          current law that would prevent counties from allocating Mental  
          Health Services Act funds to college campuses for mental health  
          services.
          The bill appears to limit administrative expenses of grantees to  
          5% of grant awards and administrative expenses of the Department  
          of Health Care Services to 5% of total program funds. It is not  
          clear whether either of those limitations apply to the  
          administrative expenses incurred by the California Mental Health  
          Services Authority.




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