BILL ANALYSIS �
AB 1929
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CONCURRENCE IN SENATE AMENDMENTS
AB 1929 (Chau)
As Amended August 18, 2014
Majority vote
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|ASSEMBLY: |77-0 |(May 27, 2014) |SENATE: |32-0 |(August 21, |
| | | | | |2014) |
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Original Committee Reference: H. & C.D.
SUMMARY : Requires the California Housing Finance Agency
(CalHFA), with the concurrence of the Department of Health Care
Services (DHCS), to release unencumbered Mental Health Services
Act (MHSA) funding upon request of the respective county, and
for counties to utilize these released funds to provide housing
assistance to people with mental illness. Specifically, this
bill :
1)Releases MHSA housing program funds currently held by CalHFA
to their respective counties, upon request of those counties,
to be used for the purpose of providing housing assistance for
people with mental illness.
2)Defines "housing assistance" as meaning:
a) Rental assistance or capitalized operating subsidies.
b) Security deposits, utility deposits, or other move-in
cost assistance.
c) Utility payments.
d) Moving cost assistance.
e) Capital funding to build or rehabilitate affordable
housing for mentally ill persons who are homeless or at
risk of being homeless.
3)Provides that all requirements of the MHSA shall apply to all
moneys released to a county pursuant to this bill.
The Senate amendments :
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1)Delete the portion of the bill that codified the MHSA housing
program.
2)Clarify that a county can request a refund of any unencumbered
MHSA funds held by CalHFA.
3)Narrow the definition of "housing assistance" as meaning:
a) Rental assistance or capitalized operating subsidies.
b) Security deposits, utility deposits, or other move-in
cost assistance.
c) Utility payments.
d) Moving cost assistance.
e) Capital funding to build or rehabilitate affordable
housing for mentally ill persons who are homeless or at
risk of being homeless.
4)Clarify that all requirements of the MHSA shall apply to all
moneys released to a county pursuant to this bill.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS :
Background: In 2004, California voters approved Proposition 63:
the MHSA. 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, with a stated
goal of providing 10,000 permanent supportive housing units for
individuals with mental illness and their families and an
allocation of up to $75 million per year in MHSA funds 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 DMH and the Department of Housing and Community
Development (HCD) to present a plan to the Legislature for the
use of Proposition 63 funds for the development of supportive
housing projects.
In 2007, county mental health departments agreed to a one-time
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set aside of $400 million of Proposition 63 revenue with CalHFA.
These funds were allocated these funds 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.
To administer the $400 million allocated for the MHSA housing
program, a partnership was created between CalHFA and the
Department of Mental Health (DMH). DMH was subsequently folded
into DHCS during reorganization in 2013. 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. As a result
of partnering with CalHFA, many counties have created permanent
supportive housing units for homeless people with mental
illness.
Purpose of the bill: While most counties have already expended
their share of the $400 million allocation, others have not
because they received small allocations that do not make
construction of housing units feasible. These funds reside with
the State, and releasing them to their respective counties will
give these counties additional flexibility in providing housing
assistance to residents with mental illness. Counties currently
receive their MHSA allocations directly, and county mental
health departments have discretion to dedicate additional MHSA
funding toward housing. This bill would also authorize CalHFA
to release any unencumbered MHSA funds that are deposited with
CalHFA for future projects.
As these released MHSA funds were intended for housing purposes,
counties must use them to provide housing assistance for people
with mental illness, as defined by the MHSA. This bill defines
"housing assistance" for purposes of these released funds as
meaning rental assistance or capitalized operating subsidies,
security deposits, utility deposits, or other move-in cost
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assistance, utility payments, moving cost assistance, and
capital funding to build or rehabilitate housing affordable to
people experiencing homelessness or at risk of homelessness.
Releasing these funds directly to the counties will better
enable them to utilize these funds for housing assistance.
Analysis Prepared by : Rebecca Rabovsky / H. & C.D. / (916)
319-2085
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