BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 1929
AUTHOR: Chau
AMENDED: May 1, 2014
HEARING DATE: June 18, 2014
CONSULTANT: Diaz
SUBJECT : California Housing Finance Agency: MHSA funding:
special needs housing for person with mental illness.
SUMMARY : Allows county mental health departments to deposit
Proposition 63 (Mental Health Services Act) funding with the
California Housing Finance Agency (CalHFA), as specified. Allows
CalHFA to use those funds, as specified, for special housing
needs for those with mental illness. Requires CalHFA to provide
technical assistance to counties, as specified, and allows
CalHFA to charge a fee to counties of up to 1.5 percent of
future allocations, as specified. Requires counties to dedicate
funds, as specified, to provide housing assistance to those with
serious mental illness who are homeless or to the mentally ill
at risk of being homeless.
Existing law:
1.Authorizes CalHFA to finance permanent special needs housing,
including for those with mental health illness.
2.Establishes the Mental Health Services Act (MHSA) housing
program, which provides permanent supportive housing for
people with mental illness and allocates up to $75 million per
year for this purpose.
3.Imposes a tax of one percent on personal earnings of over one
million dollars for the purpose of financing new or expanded
mental health services, pursuant to the MHSA. Allows the
Legislature to add provisions to clarify procedures and terms
of the MHSA by a majority vote.
This bill:
1.Allows a county mental health department to deposit MHSA
funding with CalHFA to develop housing to meet the special
housing needs of those with mental illness.
2.Allows CalHFA to receive MHSA funding from counties to finance
the acquisition, construction, rehabilitation, refinancing, or
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AB 1929 | Page 2
development of special needs housing for those with mental
illness. Requires CalHFA to coordinate with the Department of
Health Care Services (DHCS) to administer the use of the MHSA
funds.
3.Allows CalHFA to enter into financial and other agreements
with county and other agencies to commit sufficient county
MHSA funds, including future allocations.
4.Requires CalHFA to provide technical assistance to county
mental health departments as necessary to assist the county in
selecting special needs housing that best meets the needs of
county residents with mental illness.
5.Allows CalHFA to charge a county a fee of up to one percent of
future allocations to cover the reasonable costs incurred by
CalHFA for providing technical assistance. Allows CalHFA to
charge a county a fee of up to 1.5 percent of future
allocations if the county has committed less than one million
dollars. Allows the fees to be paid from the county's MHSA
funds.
6.Requires CalHFA to release unexpended MHSA funding from the
initial $400 million allocation upon request of the respective
county. Requires the county to dedicate the funds, within one
year of receipt, to providing housing assistance to those with
serious mental illness who are homeless or to the mentally ill
at risk of being homeless. Requires the county to track
expenditure of the funds and report to CalHFA. Defines
"housing assistance" to include, but is not limited to:
a. Rental assistance or capitalized operating
subsidies;
b. Housing relocation services;
c. Security deposits, utility deposits, or other
move-in cost assistance;
d. Utility payments;
e. Moving cost assistance;
f. Capital funding to build or rehabilitate
affordable housing for homeless; or, mentally ill
people or for the mentally ill at risk of being
homeless.
7.Specifies that it is the Legislature's intent that CalHFA
continue the MHSA housing program.
AB 1929 | Page
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FISCAL EFFECT : According to the Assembly Appropriations
Committee, this bill has ongoing costs to CalHFA to administer
the use of funds, likely fully offset by authorized
administrative fees.
PRIOR VOTES :
Assembly Housing and Community Development: 7 - 0
Assembly Appropriations: 17 - 0
Assembly Floor: 77 - 0
COMMENTS :
1.Author's statement. According to the author, supportive
housing has proven to be an effective strategy for reducing
homelessness among those with mental illness. At any given
moment more than 133,000 Californians are homeless. Of these
Californians, roughly 33,800, or 25 percent, are considered
chronically homeless. According to researchers, at least
one-third of chronically homeless people are mentally ill.
AB 1929 expressly authorizes county mental health departments,
CalHFA, and DHCS to partner in the development of permanent
supportive housing for people with mental illness. County
mental health departments may continue to deposit MHSA funding
with CalHFA. In return, counties may receive technical
assistance from CalHFA, as well as assistance with financing
the acquisition, construction, rehabilitation, refinancing, or
development of supportive housing units for people with mental
illness. CalHFA is authorized to charge counties a fee, paid
from MHSA funds, for providing this assistance.
Additionally, this bill releases unexpended funds from the
original $400 million allocation to their respective counties,
upon request of those counties. As these funds were originally
set aside for housing purposes, counties must use them to
provide housing assistance for people with mental illness who
are homeless or at risk of homelessness. Releasing these funds
directly to the counties will better enable them to utilize
these funds for housing assistance.
2.Background. After the passage of Proposition 63, Governor
Schwarzenegger, through Executive Order S-07-06 in 2006,
directed the creation of the MHSA housing program with a
stated goal of providing 10,000 permanent supportive housing
units for individuals with mental illness and their families,
with an allocation of up to $75 million per year in MHSA funds
AB 1929 | Page 4
for this purpose. SB 257 (Chesbro), Chapter 748, Statutes of
2006, codified CalHFA's authority to finance permanent
supportive housing for people with mental illness and directed
CalHFA, in conjunction with the Department of Mental Health
(DMH) and the Department of Housing and Community Development
(HCD) to present a plan to the Legislature for the use of MHSA
funds for the development of supportive housing projects. In
2007, county mental health departments agreed to a one-time
set aside of $400 million of MHSA revenue with CalHFA. These
funds were allocated to all but the eight least populated
counties for the purpose of building permanent supportive
housing for people with mental illness who are homeless or at
risk of homelessness. Of this $400 million, counties were
authorized to use $75 million per year for capital costs and
$40 million per year for operating and maintenance costs. A
partnership was created between CalHFA and DMH (now DHCS,
after the Governor's 2011 Reorganization Plan).
To administer the $400 million allocated for the MHSA housing
program, CalHFA underwrites the requests for capital funds and
capitalizes operating expenses. DHCS evaluates each
applicant's proposed target population and supportive services
plan. Once funds are awarded, CalHFA oversees all development
and financial aspects of the project and DHCS oversees the
provision of services. CalHFA also provides technical
assistance to county mental health departments to select
special needs housing that would best meet the needs of a
county's residents with mental illness and charges an
administrative fee for this assistance.
In the "Current Statistics on the Prevalence and
Characteristics of People Experiencing Homelessness in the
United States," last updated in July 2011 by the federal
Substance Abuse and Mental Health Services Administration,
data from 2010 shows that on a given night 407,966 individuals
were homeless in shelters, transitional housing programs, or
on the streets (not including those who were sleeping at the
homes of family or friends), and 109,812 individuals were
chronically homeless (a one percent decrease from the previous
year). Of these individuals, 26.2 percent had a severe mental
illness, and 34.7 percent of adults had chronic substance use
issues. Over the course of that year, data shows that a total
of 1,593,150 individuals experienced homelessness.
3.Double referral. This bill has been double referred. Should it
pass out of this committee, it will be referred to the Senate
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Transportation and Housing Committee.
4.Prior legislation. SB 257, of 2006, codified CalHFA's
authority to finance permanent supportive housing for people
with mental illness and directed CalHFA, in conjunction with
DMH and HCD to present a plan to the Legislature for the use
of MHSA funds for the development of supportive housing
projects.
5.Support. Supporters argue that this bill is needed to codify
practices and procedures from the Executive Order that put
into place the MHSA housing program, which since its inception
has helped to build more than 2,500 affordable places for
people with severe mental illnesses. Supporters argue that
this approach has demonstrated very good results for people
with mental disorders and could continue to be very valuable
in meeting the housing needs of this vulnerable population.
SUPPORT AND OPPOSITION :
Support: California American College of Emergency Physicians
California Council of Community Mental Health Agencies
California Mental Health Directors Association
California Psychiatric Association
California Rural Legal Assistance Foundation
Housing California
Mental Health America of California
National Alliance on Mental Illness, California
National Association of Social Workers, California
Chapter
Western Center on Law & Poverty
Oppose: None received.
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