BILL NUMBER: AB 34	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY   APRIL 26, 1999
	AMENDED IN ASSEMBLY   APRIL 5, 1999
	AMENDED IN ASSEMBLY   MARCH 4, 1999
	AMENDED IN ASSEMBLY   FEBRUARY 4, 1999

INTRODUCED BY   Assembly  Member Steinberg  
Members Steinberg and Baugh 
    (Principal coauthor:  Assembly Member Baugh) 
   (Coauthors:  Assembly Members Alquist, Calderon, Cedillo,
Gallegos, Hertzberg,  Honda,  Jackson, Keeley, Kuehl, 
Lowenthal,  Mazzoni, Romero, Strom-Martin, Thomson, and
Washington)
   (Coauthors:  Senators Alpert, Baca, Chesbro, Johnston, Perata, 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 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, 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.  However, those who receive extensive
community treatment are hardly ever incarcerated.  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 more than 3,000 of the
total of approximately 4,500 persons in the state mental hospitals,
for an additional annual state cost of over $300 million.
   (e) People suffering from severe mental illness receive sentences
that are six times longer than those received by others convicted of
the same crimes.
   (f) There are no funds or programs that ensure that people
suffering from severe mental illness can receive the treatment they
need.
   (g) 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, outreach services and other early
intervention strategies, 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 ensure that
members of the target population involved in the system of care
receive age, gender, and culturally appropriate services, to the
extent feasible, that are designed to enable recipients to:
   (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)  Access necessary physical health care and 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 .  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, as described in
Section 5600.3, 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, vocational
rehabilitation, money management assistance for accessing other
health care and obtaining federal income and housing support, and
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.   Grants shall also include a projection
of the number of persons to be served annually.  Beginning in the
2002-03 fiscal year, funding shall be based upon each county's
successful demonstration that the county has served the number of
adults projected for the prior fiscal year. 
   (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.  The benchmarks for reduction in
incarceration rates shall require each county to reduce incarceration
rates by 20 percent or more over the four-year period.  
However, an individual county contract may specify a different
measure if there are known circumstances making it difficult for that
county to obtain a 20 percent reduction even if all of the best
practices are utilized.   In reviewing a county program for
renewal of a grant, the department may approve the renewal even if
the performance benchmark is unmet if the department finds that the
county program is successfully stabilizing more people with severe
mental illness, improving the community by reducing homelessness, and
achieving the maximum feasible reduction in incarceration of people
with severe mental illness.
   (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  
On or before November 1, 2001  , 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 , and make
recommendations to the Legislature regarding how counties can improve
their performance and whether state policies regarding severe mental
illness should be changed.  The director may establish standards and
a reporting format for county reports to the director on annual
progress toward attaining expansion grant goals  .
   (G) If the director determines pursuant to subparagraph (E) 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 subsequent fiscal year, provided that the
total appropriations in any one fiscal year shall not exceed five
hundred million dollars ($500,000,000).
  SEC. 5.  (a) The sum of three million dollars ($3,000,000) is
hereby appropriated from the General Fund to the State Department of
Mental Health.  Five hundred thousand dollars ($500,000) shall be
allocated for training, by or through the programs established
pursuant to subdivision  (a) of, five   (a).
Five  hundred thousand dollars ($500,000) shall be allocated for
training to counties in homeless outreach to be offered through an
organization with significant success with homeless outreach
programs, and two million dollars ($2,000,000) shall be allocated 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) The sum of fifty million dollars ($50,000,000) is hereby
appropriated from the General Fund for the 2000-01 fiscal year 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)  A sum not to exceed one hundred million dollars
($100,000,000) is hereby appropriated for the 2001-02 fiscal year
from the General Fund 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)  A sum not to exceed one hundred fifty million dollars
($150,000,000) is hereby appropriated for the 2002-03 fiscal year
from the General Fund 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) A sum not to exceed two hundred million dollars ($200,000,000)
is hereby appropriated for the 2003-04 fiscal year from the General
Fund 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)  A sum not to exceed two hundred fifty million dollars
($250,000,000) is hereby appropriated for the 2004-05 fiscal year
from the General Fund to the State Department of Mental Health for
implementation of paragraph (2) of subdivision (b) of Section 5814 of
the Welfare and Institutions Code.
   (g)  A sum not to exceed three hundred million dollars
($300,000,000) is hereby appropriated for the 2005-06 fiscal year
from the General Fund to the State Department of Mental Health for
implementation of paragraph (2) of subdivision (b) of Section 5814 of
the Welfare and Institutions Code.
   (h)  A sum not to exceed 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 to the State Department of
Mental Health for implementation of paragraph (2) of subdivision (b)
of Section 5814 of the Welfare and Institutions Code.
   (i) The State Department of Mental Health shall allocate to
counties, from the amount appropriated pursuant to subdivision (a),
for the first year of initial grants to counties, the amount
projected by each county that would be required to fund first-year
costs pursuant to paragraph (2) of subdivision (b) of Section 5814 of
the Welfare and Institutions Code.  If the total of the projected
first-year costs of all counties exceeds the maximum appropriation,
each county shall receive a percentage of the maximum appropriation
equal to that county's percentage of the total projected costs for
all counties.
   (j) The amounts appropriated to the State Department of Mental
Health, in subdivisions (b) to (h), inclusive, for the second and all
subsequent fiscal years of funding for expansion of the county
mental health programs pursuant to Section 5814 of the Welfare and
Institutions Code, shall be allocated to counties based on the actual
amounts due under the contract with the applicable county for the
actual net increases in the number of persons served during the prior
fiscal year, adjusted by the amount that the allocation to the
county in the prior fiscal year was greater or less than the amount
required to fund the county for the actual increase in number of
persons served.  If the total amount of the allocations to all
counties would exceed the maximum allowable appropriation for that
year, each county shall receive a percentage of the maximum
appropriation equal to that county's percentage of the total costs
for all counties for that year.  If the allocations to counties are
reduced, the balance of each county's costs may be paid to that
county in the following fiscal year to the extent funds are
available.