BILL ANALYSIS �
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: ab 1929
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: chau
VERSION: 5/1/14
Analysis by: Mark Stivers FISCAL: yes
Hearing date: June 24, 2014
SUBJECT:
Mental Health Services Act Housing Program
DESCRIPTION:
This bill, upon the request of a county, requires the California
Housing Finance Agency (CalHFA) to release unexpended Mental
Health Services Act (MHSA) housing funding back to the county
for housing purposes and clarifies CalHFA's authority to
continue the MHSA Housing Program.
ANALYSIS:
In 2004, California voters approved Proposition 63, the Mental
Health Services Act. The MHSA imposes a 1% tax on personal
earnings over $1 million to fund county-run mental health
programs. Through Executive Order S-07-06 in 2006, Governor
Schwarzenegger directed the creation of the MHSA Housing Program
to provide, on behalf of counties, both capital and operating
subsidy funding for the development of permanent supportive
housing for individuals with serious mental illness and who are
homeless or at risk of homelessness. The Executive Order stated
a goal of providing 10,000 permanent supportive housing units
for individuals with mental illness and their families.
To administer the MHSA Housing Program, CalHFA and the
Department of Mental Health -subsequently folded into the
Department of Health Care Services (DHCS) - created a
partnership. 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
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assistance.
In 2007, 50 county mental health departments agreed to a
one-time set-aside of $400 million of MHSA revenue for the MHSA
Housing Program to build an estimated 2,500 units of permanent
supportive housing for people with mental illness who are
homeless or at risk of homelessness. While most counties have
already used their share of the $400 million allocation, others
have not because they received small allocations that do not
make construction of housing units feasible.
This bill requires CalHFA to release unexpended MHSA housing
funding from the initial $400 million allocation upon the
request of the respective county. The county must then dedicate
released funds to providing housing assistance to persons with
serious mental illness who are homeless or to mentally ill
persons at risk of being homeless. The bill also:
Allows CalHFA to receive MHSA funding from a county to finance
the development of special needs housing for persons with
mental illness
Requires CalHFA 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 residents with mental illness
Allows CalHFA to charge a county a fee of up to 1% of future
allocations, or 1.5% of allocations of less than $1 million,
to cover the agency's reasonable costs for providing
assistance
COMMENTS:
1.Purpose of the bill . According to the author, at any given
moment more than 133,000 Californians are homeless, and
roughly 33,800 of these persons - or 25% - are considered
chronically homeless. According to researchers, at least
one-third of chronically homeless people are mentally ill.
Supportive housing has proven to be an effective strategy for
reducing homelessness among those with mental illness.
Although CalHFA has awarded most of the initial $400 million
directed to the MHSA Housing Program, county mental health
departments have discretion to dedicate additional MHSA
funding toward housing. Some larger counties have indicated
that they would like to deposit additional funds into the MHSA
Housing Program and continue using CalHFA's expertise to
finance supportive housing developments. At the same time,
AB 1929 (CHAU) Page 3
some smaller counties still have funds available in the MHSA
Housing Program, which are insufficient to fund a full
project. These counties will benefit from retaking control of
their funds and, as this bill allows, being able to fund a
wider array of housing strategies.
2.Status of the program . As of March 31, 2013, the MHSA Housing
Program had received 172 applications from 37 counties and two
cities. The program approved 149 applications, creating 2,325
units of supportive housing for the homeless mentally ill.
Thirty-six of the 50 counties have exhausted their funds
committed to the program. Fourteen counties have a total of
$21.5 million remaining on account that this bill would allow
be requested back.
3.Solidifying the foundation . Aside from requiring the release
of remaining funds, most of the provisions of this bill codify
authorities that CalHFA already enjoys and practices already
in place. Given the convoluted genesis of this program
through very general statutory authority, an executive order,
and memoranda of understanding, the author believes that
placing these authorities and practices into statute will
solidify the MHSA Housing Program foundation for the future.
4.Released funds only for housing . While the MHSA allows
counties to spend their revenues on a wide variety of mental
health services, this bill requires counties to expend
released MHSA Housing Program funds for housing assistance to
persons with mental illness. This provision provides counties
less than total control over their resources, but gives
counties more flexibility over housing expenditures than they
currently have.
5.Technical amendments . The author proposes to take the
following technical amendments in committee:
On page 4, line 31, after the first "of" insert "the"
On page 6, line 8, strike "of future allocations" and
insert "of the MHSA loan amount per project"
On page 6, line 13, strike "of future allocations" and
insert "of the MHSA loan amount per project"
On page 6, line 15, strike "unexpended" and insert
"unencumbered"
On page 6 after line 33, insert "(g) This section does
not preclude a county from depositing funding from sources
AB 1929 (CHAU) Page 4
other than the funds derived from the MHSA with the agency
for the purpose of developing supportive housing for
persons with mental illness."
Previous Votes:
Senate Health: 8-0
Floor: 77-0
Appr: 17-0
H&CD: 7-0
POSITIONS: (Communicated to the committee before noon on
Wednesday, June 18,
2014.)
SUPPORT: California Chapter of the 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 of Law and Poverty
OPPOSED: None received.