Amended in Assembly May 1, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1929

Introduced by Assembly Member Chau

February 19, 2014

An act to add Section 51312.5 to the begin delete health end delete begin insert Health end insert and Safety Code, relating to mental health.

LEGISLATIVE COUNSEL’S DIGEST

AB 1929, as amended, Chau. California Housing Finance Agency: MHSA funding: special needs housing for person with mental illness.

Existing law, the Mental Health Services Act (hereafter, the MHSA), an initiative measure, was approved by the voters in November 2004 as Proposition 63. The MHSA establishes the Mental Health Oversight and Accountability Commission, and imposes a tax of 1% on incomes above $1,000,000 for the purpose of financing new or expanded mental health services. Under the MHSA, the State Department of Mental Health is required, among other things, to distribute funds for local assistance for designated mental health programs according to a local plan. begin insert Existing law requires the State Department of Health Care Services to implement the mental health services provided under the Adult and Older Adult Mental Health System of Care Act, which provides, among other things, funds for counties to provide mental health services and related supportive housing or housing assistance necessary to stabilize homeless, mentally ill persons or mentally ill persons at risk of being homeless. end insert The MHSA permits amendment by the Legislature by a2⁄3 vote of each house if the amendment is consistent with and furthers the intent of the MHSA, and also permits the Legislature to clarify procedures and terms of the MHSA by a majority vote.

Existing law establishes the California Housing Finance Fund in the State Treasury, and authorizes the transfer of construction loan funds to the construction lender or to the contractor as necessary to meet draws for progress payments pursuant to rules and regulations of the California Housing Finance Agency. Existing law authorizes the agency to make loans to finance affordable housing, including residential structures, housing developments, multifamily rental housing, special needs housing, as defined, and other forms of housing permitted by provisions regulating housing and community development.

Existing law authorizes the agency to issue revenue bonds, in accordance with specified requirements, for the purpose of financing the acquisition, construction, rehabilitation, refinancing, or development of special needs housing, including, but not limited to, supportive housing intended to benefit persons identified as having special mental health needs, including housing intended to meet the housing needs of persons eligible for mental health services funded in whole or in part under the MHSA. begin insert Existing law requires the agency, in consultation with the State Department of Mental Health and the State Department of Housing and Community Development, and other agencies and interested parties, to prepare and present to the Legislature a plan for the development, acquisition, construction, and rehabilitation of supportive housing projects using up to $75,000,000 annually in funding from the Mental Health Services Act, as provided under the Governor’s Executive Order S-07-06. Under existing law, by executive order, the State Department of Mental Health, in consultation with the California Mental Health Directors Association, is directed to allocate up to $75,000,000 in Mental Health Services Act funds each year to finance the capital costs associated with the development, acquisition, construction, and rehabilitation of permanent supportive housing for individuals with mental illness. end insert

This bill would authorize a county mental health department to deposit with the agency funding received by the county under the MHSA for the development of housing to meet the special housing needs of persons with mental illness. The bill would authorize the agency to receive MHSA funding from a county to finance the acquisition, construction, rehabilitation, refinancing, or development of special needs housing for persons with mental illness. begin insert The bill would require the agency to coordinate with the State Department of Health Care Services to administer the use of these funds. end insert

This bill would declare that it clarifies procedures and terms of the Mental Health Services Act.

This bill would authorize the agency to enter into financial and other agreements with the county, and other agencies as necessary, to commit sufficient county funds derived from the MHSA, including future begin delete allocations, for the purpose of securing revenue bonds issued by the agency for the purposes of meeting the special housing needs of persons with mental illness. end delete begin insert allocations. end insert

This bill would require the agency to provide technical assistance to a county mental health department as necessary to assist the county in selecting the special needs housing that would best meet the needs of the county’s special needs residents.

The bill would authorize the agency to charge the county a fee, begin delete not to exceed the actual costs, end delete begin insert of up to 1% of future allocations, unless the county has committed less than $1,000,000 in which case the agency may charge a fee of up to 1.5% of future allocations, end insert begin insert to cover the reasonable costs incurred by the agency end insert for providing assistance under these provisions and would authorize payment of these fees from county MHSA funds.

begin insert

The bill would require the agency to release unexpended MHSA housing funding from the initial $400,000,000 allocation upon the request of the respective county and would require these counties to dedicate these funds, within one year of receipt of the funds from the agency, to providing housing assistance, as defined, to persons with serious mental illness who are homeless, or mentally ill persons who are at risk of being homeless.

end insert begin insert

The bill would makes findings and declarations regarding the need to establish a statutory structure to promote and facilitate a process by which county mental health departments are able to more fully utilize the MHSA funds for supportive housing and other housing assistance purposes.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

SECTION 1.  

The Legislature finds and declares all of the
following:

(a) The Mental Health Services Act (hereafter, the MHSA), an
initiative measure approved by the voters in November 2004 as
Proposition 63, provides funding for local assistance for designated
mental health programs.

(b) A critical component of the success of community services
for persons with mental illness is the availability of supportive
housing.

begin delete

(c) Funding under the MHSA has is available to local agencies
for development of supportive housing. However, the complexity
of the process surrounding the financing and development of capital
projects presents obstacles to the development of this housing in
sufficient quantities.

end delete begin insert

(c) It is the intent of the Legislature that the California Housing
Finance Agency (CalHFA) continue the MHSA housing program.
The State Department of Mental Health, CalHFA, and the County
Mental Health Directors Association partnered together to
administer a housing program under which $400,000,000 in MHSA
funds were initially made available to finance the capital costs
associated with the development, acquisition, construction, or
rehabilitation, or all, of permanent supportive housing for
individuals with mental illness and their families, including
homeless individuals with mental illness and their families.

end insert begin insert

(d) Through Executive Order S-07-06 in 2006, Governor
Schwarzenegger directed the creation of the MHSA housing
program. The State Department of Mental Health, in consultation
with the California Mental Health Directors Association, were
directed to allocate up to $75,000,000 annually in MHSA funding
to finance the development, acquisition, construction, or
rehabilitation, or all, of 10,000 permanent supportive housing
units for individuals with mental illness and their families,
especially homeless individuals with mental illness and their
families.

end insert begin insert

(e) Senate Bill 257 (Chesbro), Chapter 748 of Statutes of 2006,
authorized CalHFA to finance permanent supportive housing for
individuals with mental illness. Senate Bill 257 also directed
CalHFA, in consultation with the State Department of Mental
Health and the State Department of Housing and Community
Development, and other agencies and parties, to present to the
Legislature a plan for the use of MHSA funds for the development
of permanent supportive housing.

end insert begin insert

(f) In 2007, county mental health departments agreed to set
aside $400,000,000 of MHSA funds with CalHFA, and allocate
these funds to all but the eight least populated counties for the
purpose of building permanent supportive housing. Counties were
authorized to use $75,000,000 annually for capital costs and
$40,000,000 annually for operating and maintenance costs. While
most counties have already expended their share of these funds,
others have not because these counties received small allocations
that do not make the construction of housing units feasible.
Releasing these funds to their respective counties will enable these
counties to better utilize these funds for supportive housing and
housing assistance for individuals with serious mental illness, and
those homeless individuals with mental illness or mentally ill
individuals at risk of being homeless.

end insert begin insert

(g) Counties currently receive a direct allocation of MHSA
funds and have the discretion to dedicate additional funds for
supportive housing purposes. Some counties have found it
beneficial to continue utilizing CalHFA’s assistance, given the
complexity of developing supportive housing.

end insert begin delete

(d)

end delete

begin insert (h) end insert  The purpose of this act is to provide a statutory structure to
begin insert promote and end insert facilitate this process by authorizing county mental
health departments to more fully utilize begin insert MHSA funds for housing
purposes, including end insert the assistance of begin delete the California Housing
Finance Agency end delete begin insert CalHFA end insert .

SEC. 2.  

Section 51312.5 is added to the Health and Safety
Code, to read:

51312.5.  

(a) A county mental health department may deposit
with the agency funding received by the county under the Mental
begin delete health end delete begin insert Health end insert Services Act for the development of housing to meet
the special housing needs of persons with mental illness.

(b) The agency may receive MHSA funding from a county to
finance the acquisition, construction, rehabilitation, refinancing,
or development of special needs housing for persons with mental
illness. begin insert The agency shall coordinate with the State Department of
Health Care Services to administer the use of these funds. end insert

(c) The agency may enter into financial and other agreements
with the county, and other agencies as necessary, to commit
sufficient county funds derived from the MHSA, including, but
not limited to, funds from future begin delete allocations, for the purpose of
securing revenue bonds issued by the agency under this chapter
for the purposes of meeting the special housing needs of persons
with mental illness. end delete begin insert allocations. end insert

(d) The agency shall provide technical assistance to a county
mental health department as necessary to assist the county in
selecting the special needs housing that would best meet the needs
of the county’s residents with mental illness.

(e) The agency may charge the county a fee begin insert , of up to 1 percent
of future allocations, to cover the reasonable costs incurred by
the agency end insert for providing assistance under this begin delete chapter, not to
exceed the actual costs of those services. end delete begin insert chapter, unless the county
has committed fewer than one million dollars ($1,000,000), in
which case the agency may charge the county a fee of up to 1.5
percent of future allocations. end insert These fees may be paid from county
MHSA funds.

begin insert

(f) The agency shall release unexpended MHSA housing funding
from the initial four-hundred-million-dollars ($400,000,000)
allocation upon the request of the respective county. The county
shall dedicate these funds, within one year of receipt of the funds
from the agency, to providing housing assistance to persons with
serious mental illness who are homeless, or mentally ill persons
at risk of being homeless. The county shall track the expenditure
of these funds and report these expenditures to the agency. For
purposes of this subdivision, “housing assistance” includes, but
is not limited to, each of the following:

end insert begin insert

(1) Rental assistance or capitalized operating subsidies.

end insert begin insert

(2) Housing relocation services.

end insert begin insert

(3) Security deposits, utility deposits, or other move-in cost
assistance.

end insert begin insert

(4) Utility payments.

end insert begin insert

(5) Moving cost assistance.

end insert begin insert

(6) Capital funding to build or rehabilitate affordable housing
for homeless, mentally ill persons or mentally ill persons at risk
of being homeless.

end insert

SEC. 3.  

The Legislature finds and declares that this act clarifies
procedures and terms of the Mental Health Services Act within
the meaning of Section 18 of the Mental Health Services Act.