BILL NUMBER: AB 34	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY   MARCH 4, 1999
	AMENDED IN ASSEMBLY   FEBRUARY 4, 1999

INTRODUCED BY   Assembly Member Steinberg
    (Coauthor:  Assembly Member Thomson) 
    (Coauthors:  Assembly Members Cedillo, Gallegos, Hertzberg,
Keeley, Mazzoni, Romero, Thomson, and Washington) 
    (Coauthors:  Senators Baca and Solis) 

                        DECEMBER 7, 1998

   An act to amend Sections 5802, 5806, and 5814 of the Welfare and
Institutions Code, relating to mental health, and making an
appropriation therefor.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 34, as amended, Steinberg.  Mental health funding:  local
grants.
   Existing law provides for the allocation of state funds to
counties for mental health programs.
   This bill would make various statements of legislative findings
and intent regarding the need to provide sufficient funds to counties
for adult mental health and related services.
   Existing law requires the State Department of Mental Health to
establish service standards relating to mental health services.
These standards are required to include, among other things, plans
for services and evaluation strategies.
   This bill would also require these standards to include
coordination and access to related medications, substance abuse
services, housing assistance, and vocational rehabilitation services.

   The bill would also provide for planning grants and service
expansion grants to counties for adult mental health programs.

   The bill would appropriate $10,000,000 from the General Fund to
the department for provision of planning grants during the 1999-2000
fiscal year, and would express legislative intent that at least
$50,000,000 be appropriated each fiscal year thereafter pursuant to
the annual Budget Act for these planning and service expansion
grants.  
   The bill would appropriate funds to provide planning grants and
expansion grants for counties with significant populations of
homeless mentally ill persons through the 2006-07 fiscal year. 
   Vote:  2/3.  Appropriation:  yes.  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) Presently there are no financial incentives for counties to
increase the number of people they serve with severe mental illness.

   (b) County dollars are generally fixed, so that treatment of a
higher than expected number of Medi-Cal recipients, who are entitled
to treatment by the county, reduces the amount of funds available to
serve other individuals.
   (c) Counties should be provided an amount of funds to establish
systems of care for severely mentally ill adults, and provide mental
health services and related medications , substance abuse services,
housing assistance, vocational rehabilitation, and other nonmedical
programs necessary to stabilize homeless mentally ill persons
 and   ,  get them into regular treatment
 ,  and off the streets.  
   (d) When people who suffer from severe mental illness do not have
access to the services they require they frequently wind up in the
criminal justice system.  The Department of Corrections is expending
$400 million annually for the incarceration and treatment of people
suffering from severe mental illness.  In addition, the Department of
Corrections and the criminal justice system are responsible for the
placement of persons more than 3,000 of the total of approximately
4,500 beds in the state mental hospitals, for an additional annual
state cost of over $300 million.
   (e) While most people suffering from severe mental illness who do
not receive treatment have come into contact with the criminal
justice system and have been incarcerated at one time or another in
their life, those who receive extensive community treatment are
hardly ever incarcerated.  Moreover, people suffering from severe
mental illness who are able to receive adequate treatment do not
commit crimes at any higher rate than those of the general
population.
   (f) People suffering from severe mental illness receive sentences
that are six times longer than those received by others convicted of
the same crimes.
   (g) There are no funds or programs that ensure that people
suffering from severe mental illness can receive the treatment they
need, unless they have committed a serious or violent felony and are
returned to the community under the conditional release program which
includes state funding for comprehensive mental health services.
   (h) Increasing funding for an adult mental health system of care
will pay for itself many times over in reduced Department of
Corrections, criminal justice system, and local law enforcement
expenditures for people with severe mental illness. 
  SEC. 2.  Section 5802 of the Welfare and Institutions Code is
amended to read:
   5802.  (a) The Legislature finds that a mental health system of
care for adults and older adults with severe and persistent mental
illness is vital for the success of mental health managed care in
California.  Specifically:
   (1) A comprehensive and coordinated system of care includes
community-based treatment, case management, and interagency system
components required by adults and older adults with severe and
persistent mental illness.
   (2) Mentally ill adults and older adults receive service from many
different state and county agencies, particularly criminal justice,
employment, housing, public welfare, health, and mental health.  In a
system of care these agencies collaborate in order to deliver
integrated and cost-effective programs.
   (3) The management of the risk for persons with severe mental
illness and related financial risks is important for all levels of
government, business, and the community.
   (4) System of care services which ensure culturally competent care
for persons with severe mental illness in the most appropriate,
least restrictive level of care are necessary to achieve the desired
performance outcomes.
   (5) Mental health service providers need to increase
accountability and further develop methods to measure progress
towards client outcome goals and cost effectiveness as required by a
system of care.
   (b) The Legislature further finds that the integrated service
agency model developed in Los Angeles and Stanislaus Counties and the
countywide systems model developed in Ventura County, beginning in
the 1989-90 fiscal year through the implementation of Chapter 982 of
the Statutes of 1988, provides models for managing care for adults
and older adults with severe mental illness that are vital to the
implementation and success of the mental health managed care plan in
California, and have successfully met the performance outcomes
required by the Legislature.
   (c) The Legislature also finds that the system components
established in these three programs can be replicated and expanded to
additional clients in order to provide greater benefit to adults and
older adults with severe and persistent mental illness at a lower
cost in California.
   (d) Therefore, using the guidelines developed under the
demonstration projects implemented under the adult system of care
legislation in 1989, it is the intent of the Legislature to
accomplish the following:
   (1) Encourage each county to implement a system of care as
described in this legislation for the delivery of mental health
services to seriously mentally disordered adults and older adults.
   (2) To promote system of care accountability for performance
outcomes which enable adults with severe mental illness to reduce
symptoms which impair their ability to live independently, work,
maintain community supports, care for their children, stay in good
health, not abuse drugs or alcohol, and not commit crimes.
   (3) Maintain funding for the existing programs developed in Los
Angeles, Stanislaus, and Ventura Counties as models and technical
assistance resources for future expansion of system of care programs
to other counties as funding becomes available.
   (4) Provide sufficient funds for counties to establish outreach
programs and to provide mental health services and related
medications, substance abuse services, housing assistance, vocational
rehabilitation, and other nonmedical programs necessary to stabilize
homeless mentally ill persons, get them off the street, and into
treatment and recovery.
  SEC. 3.  Section 5806 of the Welfare and Institutions Code is
amended to read:
   5806.  The State Department of Mental Health shall establish
service standards that ensure that members of the target population
are identified, and services provided to assist them to live
independently, work, and reach their potential as productive
citizens.  These standards include but are not limited to:
   (a) A service planning process that is target population based and
includes the following:
   (1) Determination of the numbers of clients to be served and the
programs and services that will be provided to meet their needs.  The
local director of mental health shall consult with the mental health
board, contract agencies, family, client, ethnic and citizen
constituency groups as determined by the director.
   (2) Plans for services including outreach, design of mental health
services, coordination and access to medications, substance abuse
services, housing assistance, and vocational rehabilitation services.
Plans shall also contain evaluation strategies, which shall consider
cultural, linguistic, gender, age, and special needs of minorities
in the target populations.  Provision shall be made for staff with
the cultural background and linguistic skills necessary to remove
barriers to mental health services due to limited English speaking
ability and cultural differences.
   (3) Provisions for services to meet the needs of target population
clients who are physically disabled.
   (4) Provision for services to meet the special needs of older
adults.
   (5) Provision for family support and consultation services,
parenting support and consultation services, and peer support or
self-help group support, where appropriate.
   (b) Each client shall have either a clearly designated mental
health case manager or a multidisciplinary treatment team who is
responsible for providing or assuring needed services.
Responsibilities include complete assessment of the client's needs,
development of the client's personal services plan, linkage with all
appropriate community services, monitoring of the quality and
followthrough of services, and necessary advocacy to ensure each
client receives those services which are agreed to in the personal
services plan.  Each client shall participate in the development of
his or her personal services plan, and responsible staff shall
consult with the designated conservator and, with the consent of the
client, consult with the family and other significant persons as
appropriate.
   (c) The individual personal services plan shall  assure
  ensure  that members of the target population
involved in the system of care receive  services which are
designed   age, gender, and culturally appropriate
services, to the extent feasible, that are designed to enable
recipients  to:  
   (1) Reduce the disabling symptoms of mental illness.
   (2) Live in the most normal housing feasible in the local
community.
   (3) Have an adequate income and an appropriate level of work or
vocational training.
   (4) Are in good health.
   (5) Have a support system, with friendships and participation in
community activities.
   (6) Have freedom from dangerous, addictive substances.
   (7) Maintain socially responsible behavior.
   (8) Obtain an appropriate level of education and learning.
   (9) Receive culturally appropriate services.
   (10) Receive gender and age appropriate services.  
   (1) Live in the most independent, least restrictive housing
feasible in the local community.
   (2) Engage in the highest level of work or productive activity
appropriate to their abilities and experience.
   (3) Create and maintain a support system consisting of friends,
family, and participation in community activities.
   (4) Access an appropriate level of academic education or
vocational training.
   (5) Obtain an adequate income.
   (6) Self-manage their illness and exert as much control as
possible over both the day-to-day and long-term decisions which
affect their lives.
   (7) Maintain the best possible physical health.
   (8) Reduce or eliminate antisocial or criminal behavior and
thereby reduce or eliminate their contact with the criminal justice
system.
   (9) Reduce or eliminate the distress caused by the symptoms of
mental illness.
   (10) Reduce or eliminate the harmful effects of alcohol and
substance abuse. 
  SEC. 4.  Section 5814 of the Welfare and Institutions Code is
amended to read:
   5814.  (a) This part shall be implemented only to the extent that
funds are appropriated for purposes of this part in the Budget Act.
To the extent that funds are made available, the first priority shall
go to maintain funding for the existing programs developed in Los
Angeles, Stanislaus, and Ventura Counties.
   (b) As funds become available, this program shall be expanded to
provide  training and  funding for counties with significant
populations of homeless mentally ill persons consisting of both of
the following types of grants:
   (1) Planning grants for new counties to create, and for existing
system of care counties to expand, an adult system of care that meets
the requirements of this part.
   (2) (A) Four-year service expansion grants in accordance with a
contract between the state and approved counties that provides a
formula for annual increased funding reflecting net increases in the
total annual number of severely mentally ill adults who receive
extensive community mental health services in at least four
consecutive months.
   (B) The formula incentive funding provided pursuant to
subparagraph (A) shall be sufficient to provide mental health
services, medically necessary medications to treat severe mental
illnesses, alcohol and drug services, housing assistance, and
vocational rehabilitation  , including stipends to attract and
retain sufficient numbers of qualified professionals as necessary to
provide the necessary levels of these services  .  These grants
shall, however, pay for only the portion of the costs of those
services not likely to be provided by federal funds or other state
funds.  
   (C) Grants provided pursuant to subparagraph (A) shall include
provisions measuring the base level of the number of people suffering
from severe mental illness who are arrested and serve in jail,
prison, or a state hospital as a result of their arrest in the
applicable county, and measuring how the grant and increased mental
health services provided by the grant reduces the portion of criminal
justice system resources required to be expended on people with
severe mental illness.
   (D) Four-year program expansion grants provided pursuant to
subparagraph (A) may be renewed upon their expiration, provided that
the applicant county demonstrates to the satisfaction of the
department that the services provided are successfully reducing the
unmet mental health need and providing for reduction in the amount of
law enforcement, criminal justice system, and state corrections
expenditures that would otherwise be expended upon persons with
severe mental illness from the applicable county in accordance with a
process included in the grant for measuring these reductions and
setting forth benchmarks for reducing the expenditures as mental
health expenditures increase.
   (E) In any county in which the director determines the program has
not resulted in a reduction of criminal justice expenditures in
accordance with the previous four-year grant, the director may limit
the funds available for a continuation of the grant, or an expansion
of the grant, or impose other conditions upon the grant in order to
improve the performance of the county in reducing the incarceration
of people suffering from severe mental illness.
   (F) Commencing in the 2004-05 fiscal year, and annually
thereafter, the director shall report to the Legislature regarding
the impact of grants funded pursuant to this section in reducing the
incarceration of people suffering from severe mental illness.
   (G) The appropriations required pursuant to Section 5 of the act
adding this subparagraph for the 2004-05 fiscal year and all future
years shall be reduced by the amount that the director has determined
is not required to fully fund the grants based upon a restriction in
grant expansion due to the failure of one or more county grants in
adequately reducing the incarceration of people with severe mental
illness.
   (H) During the 2006-07 fiscal year, and annually thereafter, the
director, in consultation with county mental health directors, shall
determine whether or not the funding levels currently provided for
grants pursuant to subparagraph (A) during the 2006-07 fiscal year
are likely to be adequate to meet the needs of all counties within
the state to ensure that all persons suffering from severe mental
illness have access to necessary treatment.
   (I) If the director determines pursuant to subparagraph (H) that
the funding levels set forth in Section 5 of the act adding this
subparagraph are not adequate to meet the need, the director shall
indicate the anticipated additional funding required and the funding
in the 2007-08 fiscal year and subsequent fiscal years may be
increased by amounts not to exceed fifty million dollars
($50,000,000) in any one future year, provided that the total
appropriations in any one fiscal year shall not exceed five hundred
million dollars ($500,000,000).
   (J) If the director determines pursuant to subparagraph (H) that
the amount of funding is adequate and that in fact a surplus of
available funds is not claimed by the counties, the director shall
determine the amount of future funding likely to be required.  It is
the intent of the Legislature that, in the event such a determination
is made, appropriations for the 2007-08 fiscal year and subsequent
fiscal years shall be reduced to the level that is found to be
necessary. 
  SEC. 5.  (a) The sum of  ten million dollars ($10,000,000)
  three million dollars ($3,000,000)  is hereby
appropriated from the General Fund to the State Department of Mental
Health  for training, by or through the programs established
pursuant to subdivision (a), and for grants to counties  for
implementation of paragraph (1) of subdivision (b) of Section 5814 of
the Welfare and Institutions Code during the 1999-2000 fiscal year.

   (b) It is the intent of the Legislature that, commencing with the
2000-01 fiscal year, at least fifty million dollars ($50,000,000) be
provided each fiscal year, pursuant to the annual Budget Act, for
implementation of subdivision (b) of Section 5814 of the Welfare and
Institutions Code.  
   (b) The sum of fifty million dollars ($50,000,000) is hereby
appropriated from the General Fund for the 2000-01 fiscal year and
from any fund into which funds for the implementation of the Master
Settlement Agreement entered into by the states' attorneys general
and the tobacco industry on November 13, 1998, as specified in
subdivision (i), to the State Department of Mental Health for
implementation of paragraph (2) of subdivision (b) of Section 5814 of
the Welfare and Institutions Code.
   (c) The sum of one hundred million dollars ($100,000,000) is
hereby appropriated for the 2001-02 fiscal year from the General Fund
and from any fund into which funds for the implementation of the
Master Settlement Agreement entered into by the states' attorneys
general and the tobacco industry on November 13, 1998, as specified
in subdivision (i), to the State Department of Mental Health for
implementation of paragraph (2) of subdivision (b) of Section 5814 of
the Welfare and Institutions Code.
   (d) The sum of one hundred fifty million dollars ($150,000,000) is
hereby appropriated for the 2002-03 fiscal year from the General
Fund and from any fund into which funds for the implementation of the
Master Settlement Agreement entered into by the states' attorneys
general and the tobacco industry on November 13, 1998, as specified
in subdivision (i), to the State Department of Mental Health for
implementation of paragraph (2) of subdivision (b) of Section 5814 of
the Welfare and Institutions Code.
   (E) The sum of two hundred million dollars ($200,000,000) is
hereby appropriated for the 2003-04 fiscal year from the General Fund
and from any fund into which funds for the implementation of the
Master Settlement Agreement entered into by the states' attorneys
general and the tobacco industry on November 13, 1998, as specified
in subdivision (i), to the State Department of Mental Health for
implementation of paragraph (2) of subdivision (b) of Section 5814 of
the Welfare and Institutions Code.
   (f) (1) The sum of two hundred fifty million dollars
($250,000,000) is hereby appropriated for the 2004-05 fiscal year
from the General Fund and from any fund into which funds for the
implementation of the Master Settlement Agreement entered into by the
states' attorneys general and the tobacco industry on November 13,
1998, as specified in subdivision (i), to the State Department of
Mental Health for implementation of paragraph (2) of subdivision (b)
of Section 5814 of the Welfare and Institutions Code.
   (2) The appropriation in paragraph (1) may be reduced based on
findings made pursuant to subparagraph (G) of paragraph (2) of
subdivision (b) of Section 5814 of the Welfare and Institutions Code.

   (g) (1) The sum of three hundred million dollars ($300,000,000) is
hereby appropriated for the 2005-06 fiscal year from the General
Fund and from any fund into which funds for the implementation of the
Master Settlement Agreement entered into by the states' attorneys
general and the tobacco industry on November 13, 1998, as specified
in subdivision (i), to the State Department of Mental Health for
implementation of paragraph (2) of subdivision (b) of Section 5814 of
the Welfare and Institutions Code.
   (2) The appropriation in paragraph (1) may be reduced based on
findings made pursuant to subparagraph (G) of paragraph (2) of
subdivision (b) of Section 5814 of the Welfare and Institutions Code.

   (h) (1) The sum of three hundred fifty million dollars
($350,000,000) is hereby appropriated for the 2006-07 fiscal year and
an equal amount is hereby continuously appropriated for each fiscal
year thereafter from the General Fund and from any fund into which
funds for the implementation of the Master Settlement Agreement
entered into by the states' attorneys general and the tobacco
industry on November 13, 1998, as specified in subdivision (i), to
the State Department of Mental Health for implementation of paragraph
(2) of subdivision (b) of Section 5814 of the Welfare and
Institutions Code.
   (2) The appropriation in paragraph (1) may be modified pursuant to
subparagraph (G) of paragraph (2) of subdivision (b) of Section 5814
of the Welfare and Institutions Code and the amount of any
appropriation for subsequent fiscal years shall be modified pursuant
to subparagraphs (G), (H), (I), and (J) of paragraph (2) of
subdivision (b) of Section 5814 of the Welfare and Institutions Code.

   (i) If the Legislature establishes a special fund for the
administration of tobacco litigation settlement proceeds for which
mental health services are an eligible expenditure, the
appropriations made in this section shall be made from that fund.  An
amount necessary to meet the annual funding levels appropriated in
this section shall have priority over other eligible expenditures
from that fund.  If such a fund is not established or the fund, as
established, does not have funds adequate to meet the funding levels
appropriated in this section, the appropriations contained in this
section shall be allocated from the General Fund.