Amended in Senate June 23, 2016

Amended in Senate June 15, 2016

Amended in Senate June 14, 2016

Amended in Senate June 13, 2016

Amended in Assembly April 14, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 1618


Introduced by Committee on Budget (Assembly Members Ting (Chair), Bloom, Bonta, Campos, Chiu, Cooper, Gordon, Holden, Irwin, McCarty, Mullin, Nazarian, O’Donnell, Rodriguez, Thurmond, and Williams)

January 7, 2016


An act to amend Sections 5830begin delete and 5847end deletebegin insert 5845, 5847, 5848, 5897, and 5899end insert of, and to add Part 3.9 (commencing with Section 5849.1) to Division 5 of, the Welfare and Institutions Code, relating tobegin delete housing,end deletebegin insert mental health services,end insert and making an appropriation therefor, to take effect immediately, bill related to the budget.

LEGISLATIVE COUNSEL’S DIGEST

AB 1618, as amended, Committee on Budget. begin deleteNo Place Like Home Program: establishment. end deletebegin insertMental health services.end insert

(1) The Mental Health Services Act (MHSA), an initiative measure enacted by the voters as Proposition 63 at the November 2, 2004, statewide general election, imposes a 1% tax on that portion of a taxpayer’s taxable income that exceeds $1,000,000 and requires that the revenue from that tax be deposited in the Mental Health Services Fund to fund various county mental health programs. The MHSA authorizes the Legislature to amend its provisions by a 23 vote, provided that the amendment is consistent with and furthers the intent of the act.

This bill would establish the No Place Like Home Program, to be administered by the Department of Housing and Community Development. The bill would require the department to award $2,000,000,000 through a competitive program among counties to finance capital costs, including, but not limited to, acquisition, design, construction, rehabilitation, or preservation, and to capitalize operating reserves, of permanent supportive housing for the target population, as specified. The bill would further require the department to allocate $1,800,000,000 to a competitive program, as specified, and would require that applicants meet specified requirements to be eligible to apply for funding and would require the department to evaluate applications using specified criteria. The bill would require the department to award moneys in four rounds, as provided. The bill would require the department to allocate $200,000,000 among all counties within this state in amounts based on a calculation of the number of homeless persons residing in each county or in $500,000 amounts, whichever is greater for each county. The bill would establish, and continuously appropriate, the No Place Like Home Fund for these purposes. The bill would also appropriate $6,200,000 from the Mental Health Services Fund to the department to provide technical and application preparation assistance to counties. The bill would require counties to annually report to the department on activities funded under these provisions, as provided.

This bill would establish the No Place Like Home Program Advisory Committee, as specified, and require the committee to assist and advise the department in the implementation of the program, review and make recommendations on the department’s guidelines, review the department’s progress in distributing moneys pursuant to the program, and provide advise and guidance on statewide homelessness issues. The bill would also require the department to submit a report on the program to the Legislature by December 31 of each year, as specified, and, upon an appropriation for that purpose, to contract with a public or private research university in this state to evaluate the program, as provided.

(2) The MHSA, among other things, requires county health programs to develop plans for innovative programs, to be funded as provided, and requires that the innovative program have specified purposes, including increasing access to services. Existing law requires that the projects included in the innovative program portion of a county health plan meet specified requirements, including increasing access to underserved groups and increasing access to services.

This bill would specify that the services required to be provided through these programs, among other things, may include the provision of permanent supportive housing.

begin insert

(3) The MHSA, among other things, establishes the Mental Health Services Oversight and Accountability Commission to oversee the administration of various parts of the act. Existing law requires the commission to consist of 16 voting members, including, among others, persons with mental illness, family members of persons with mental illness, a physician, a mental health professional, a county sheriff, a superintendent of a school district, a representative of a labor organization, a representative of an employer, as specified, and a representative of a health care services plan or insurer.

end insert
begin insert

This bill would require one of the persons described above to have a background in auditing.

end insert
begin insert

Existing law requires each county mental health program to prepare and submit a 3-year program and expenditure plan and annual updates to the commission, as specified. Existing law requires the plans to include reports on the achievement of performance outcomes for services, as specified.

end insert
begin insert

This bill would require the 3-year program and expenditure plan to also be submitted to the State Department of Health Care Services. The bill would require the department to post on its website the three-year program and expenditure plan submitted by every county and a summary of the performance outcomes submitted by counties, as specified.

end insert
begin insert

(4) The MHSA, among other things, requires the State Department of Health Care Services to implement various parts of the act through the annual county mental health services performance contract, as specified. Existing law, when a county mental health program is not in compliance with its performance contract, authorizes the department to request a plan of correction with a specific timeline to achieve improvements.

end insert
begin insert

This bill would require the department to conduct program reviews of performance contracts to determine compliance and would require each county performance contract to be reviewed at least once every 3 years. The bill would also require the department to post on its website any plans of correction requested and the related findings.

end insert
begin insert

(5) The MHSA, among other things, requires the State Department of Health Care Services, in consultation with the Mental Health Services Oversight and Accountability Commission and the County Behavioral Health Directors Association of California, to develop and administer instructions for the Annual Mental Health Services Act and Expenditure Report. Existing law requires the report to be submitted electronically to the department and the commission.

end insert
begin insert

This bill would require the instructions to include a requirement that the county certify the accuracy of the report described above. The bill would require the department and commission to post each county’s report on its website, as specified. The bill would also require the department, in consultation with the commission and the County Behavioral Health Directors Association of California, to revise the instructions described above, as specified. The bill, if a county does not submit the report described above by the required deadline, would authorize the department to withhold MHSA funds until the reports are submitted.

end insert
begin delete

(3)

end delete

begin insert(6)end insert This bill would declare that its provisions further the intent of the MHSA.

begin delete

(4)

end delete

begin insert(7)end insert This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

Vote: 23. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P4    1

SECTION 1.  

Section 5830 of the Welfare and Institutions Code
2 is amended to read:

3

5830.  

County mental health programs shall develop plans for
4innovative programs to be funded pursuant to paragraph (6) of
5subdivision (a) of Section 5892.

6(a) The innovative programs shall have the following purposes:

7(1) To increase access to underserved groups.

8(2) To increase the quality of services, including better
9outcomes.

10(3) To promote interagency collaboration.

11(4) To increase access to services, including, but not limited to,
12services provided through permanent supportive housing.

P5    1(b) All projects included in the innovative program portion of
2the county plan shall meet the following requirements:

3(1) Address one of the following purposes as its primary
4purpose:

5(A) Increase access to underserved groups, which may include
6providing access through the provision of permanent supportive
7housing.

8(B) Increase the quality of services, including measurable
9outcomes.

10(C) Promote interagency and community collaboration.

11(D) Increase access to services, which may include providing
12access through the provision of permanent supportive housing.

13(2) Support innovative approaches by doing one of the
14following:

15(A) Introducing new mental health practices or approaches,
16including, but not limited to, prevention and early intervention.

17(B) Making a change to an existing mental health practice or
18approach, including, but not limited to, adaptation for a new setting
19or community.

20(C) Introducing a new application to the mental health system
21of a promising community-driven practice or an approach that has
22been successful in nonmental health contexts or settings.

23(D) Participating in a housing program designed to stabilize a
24person’s living situation while also providing supportive services
25on site.

26(c) An innovative project may affect virtually any aspect of
27mental health practices or assess a new or changed application of
28a promising approach to solving persistent, seemingly intractable
29mental health challenges, including, but not limited to, any of the
30following:

31(1) Administrative, governance, and organizational practices,
32processes, or procedures.

33(2) Advocacy.

34(3) Education and training for service providers, including
35nontraditional mental health practitioners.

36(4) Outreach, capacity building, and community development.

37(5) System development.

38(6) Public education efforts.

39(7) Research.

P6    1(8) Services and interventions, including prevention, early
2intervention, and treatment.

3(9) Permanent supportive housing development.

4(d) If an innovative project has proven to be successful and a
5county chooses to continue it, the project workplan shall transition
6to another category of funding as appropriate.

7(e) County mental health programs shall expend funds for their
8innovation programs upon approval by the Mental Health Services
9Oversight and Accountability Commission.

10begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 5845 of the end insertbegin insertWelfare and Institutions Codeend insertbegin insert is
11amended to read:end insert

12

5845.  

(a) The Mental Health Services Oversight and
13Accountability Commission is hereby established to oversee Part
143 (commencing with Section 5800), the Adult and Older Adult
15Mental Health System of Care Act; Part 3.1 (commencing with
16Section 5820), Human Resources, Education, and Training
17Programs; Part 3.2 (commencing with Section 5830), Innovative
18Programs; Part 3.6 (commencing with Section 5840), Prevention
19and Early Intervention Programs; and Part 4 (commencing with
20Section 5850), the Children’s Mental Health Services Act. The
21commission shall replace the advisory committee established
22pursuant to Section 5814. The commission shall consist of 16
23voting members as follows:

24(1) The Attorney General or his or her designee.

25(2) The Superintendent of Public Instruction or his or her
26designee.

27(3) The Chairperson of the Senate Health and Human Services
28Committee or another member of the Senate selected by the
29President pro Tempore of the Senate.

30(4) The Chairperson of the Assembly Health Committee or
31another member of the Assembly selected by the Speaker of the
32Assembly.

33(5) Two persons with a severe mental illness, a family member
34of an adult or senior with a severe mental illness, a family member
35of a child who has or has had a severe mental illness, a physician
36specializing in alcohol and drug treatment, a mental health
37professional, a county sheriff, a superintendent of a school district,
38a representative of a labor organization, a representative of an
39employer with less than 500 employees and a representative of an
40employer with more than 500 employees, and a representative of
P7    1a health care services plan or insurer, all appointed by the
2Governor. In making appointments, the Governor shall seek
3individuals who have had personal or family experience with
4mental illness.begin insert At least one of the persons appointed pursuant to
5this paragraph shall have a background in auditing.end insert

6(b) Members shall serve without compensation, but shall be
7reimbursed for all actual and necessary expenses incurred in the
8performance of their duties.

9(c) The term of each member shall be three years, to be
10staggered so that approximately one-third of the appointments
11expire in each year.

12(d) In carrying out its duties and responsibilities, the commission
13may do all of the following:

14(1) Meet at least once each quarter at any time and location
15convenient to the public as it may deem appropriate. All meetings
16of the commission shall be open to the public.

17(2) Within the limit of funds allocated for these purposes,
18pursuant to the laws and regulations governing state civil service,
19employ staff, including any clerical, legal, and technical assistance
20as may appear necessary. The commission shall administer its
21operations separate and apart from the State Department of Health
22Care Services and the California Health and Human Services
23Agency.

24(3) Establish technical advisory committees such as a committee
25of consumers and family members.

26(4) Employ all other appropriate strategies necessary or
27convenient to enable it to fully and adequately perform its duties
28and exercise the powers expressly granted, notwithstanding any
29authority expressly granted to any officer or employee of state
30government.

31(5) Enter into contracts.

32(6) Obtain data and information from the State Department of
33Health Care Services, the Office of Statewide Health Planning and
34Development, or other state or local entities that receive Mental
35Health Services Act funds, for the commission to utilize in its
36oversight, review, training and technical assistance, accountability,
37and evaluation capacity regarding projects and programs supported
38with Mental Health Services Act funds.

39(7) Participate in the joint state-county decisionmaking process,
40as contained in Section 4061, for training, technical assistance,
P8    1and regulatory resources to meet the mission and goals of the
2state’s mental health system.

3(8) Develop strategies to overcome stigma and discrimination,
4and accomplish all other objectives of Part 3.2 (commencing with
5Section 5830), 3.6 (commencing with Section 5840), and the other
6provisions of the act establishing this commission.

7(9) At any time, advise the Governor or the Legislature regarding
8actions the state may take to improve care and services for people
9with mental illness.

10(10) If the commission identifies a critical issue related to the
11performance of a county mental health program, it may refer the
12issue to the State Department of Health Care Services pursuant to
13Section 5655.

14(11) Assist in providing technical assistance to accomplish the
15purposes of the Mental Health Services Act, Part 3 (commencing
16with Section 5800), and Part 4 (commencing with Section 5850)
17in collaboration with the State Department of Health Care Services
18and in consultation with the California Mental Health Directors
19Association.

20(12) Work in collaboration with the State Department of Health
21Care Services and the California Mental Health Planning Council,
22and in consultation with the California Mental Health Directors
23Association, in designing a comprehensive joint plan for a
24coordinated evaluation of client outcomes in the community-based
25mental health system, including, but not limited to, parts listed in
26subdivision (a). The California Health and Human Services Agency
27shall lead this comprehensive joint plan effort.

28

begin deleteSEC. 2.end delete
29
begin insertSEC. 3.end insert  

Section 5847 of the Welfare and Institutions Code is
30amended to read:

31

5847.  

Integrated Plans for Prevention, Innovation, and System
32of Care Services.

33(a) Each county mental health program shall prepare and submit
34a three-year program and expenditure plan, and annual updates,
35adopted by the county board of supervisors, to the Mental Health
36Services Oversight and Accountability Commissionbegin insert and the State
37Department of Health Care Servicesend insert
within 30 days after adoption.

38(b) The three-year program and expenditure plan shall be based
39on available unspent funds and estimated revenue allocations
40provided by the state and in accordance with established
P9    1stakeholder engagement and planning requirements as required in
2Section 5848. The three-year program and expenditure plan and
3annual updates shall include all of the following:

4(1) A program for prevention and early intervention in
5accordance with Part 3.6 (commencing with Section 5840).

6(2) A program for services to children in accordance with Part
74 (commencing with Section 5850), to include a program pursuant
8to Chapter 4 (commencing with Section 18250) of Part 6 of
9Division 9 or provide substantial evidence that it is not feasible to
10establish a wraparound program in that county.

11(3) A program for services to adults and seniors in accordance
12with Part 3 (commencing with Section 5800).

13(4) A program for innovations in accordance with Part 3.2
14(commencing with Section 5830).

15(5) A program for technological needs and capital facilities
16needed to provide services pursuant to Part 3 (commencing with
17Section 5800), Part 3.6 (commencing with Section 5840), and Part
184 (commencing with Section 5850). All plans for proposed facilities
19with restrictive settings shall demonstrate that the needs of the
20people to be served cannot be met in a less restrictive or more
21integrated setting, such as permanent supportive housing.

22(6) Identification of shortages in personnel to provide services
23pursuant to the above programs and the additional assistance
24needed from the education and training programs established
25pursuant to Part 3.1 (commencing with Section 5820).

26(7) Establishment and maintenance of a prudent reserve to
27ensure the county program will continue to be able to serve
28children, adults, and seniors that it is currently serving pursuant
29to Part 3 (commencing with Section 5800), the Adult and Older
30Adult Mental Health System of Care Act, Part 3.6 (commencing
31with Section 5840), Prevention and Early Intervention Programs,
32and Part 4 (commencing with Section 5850), the Children’s Mental
33Health Services Act, during years in which revenues for the Mental
34Health Services Fund are below recent averages adjusted by
35changes in the state population and the California Consumer Price
36Index.

37(8) Certification by the county behavioral health director, which
38ensures that the county has complied with all pertinent regulations,
39laws, and statutes of the Mental Health Services Act, including
40stakeholder participation and nonsupplantation requirements.

P10   1(9) Certification by the county behavioral health director and
2by the county auditor-controller that the county has complied with
3any fiscal accountability requirements as directed by the State
4Department of Health Care Services, and that all expenditures are
5consistent with the requirements of the Mental Health Services
6Act.

7(c) The programs established pursuant to paragraphs (2) and
8(3) of subdivision (b) shall include services to address the needs
9of transition age youth 16 to 25 years of age. In implementing this
10subdivision, county mental health programs shall consider the
11needs of transition age foster youth.

12(d) Each year, the State Department of Health Care Services
13shall inform the County Behavioral Health Directors Association
14of California and the Mental Health Services Oversight and
15Accountability Commission of the methodology used for revenue
16allocation to the counties.

17(e) Each county mental health program shall prepare expenditure
18plans pursuant to Part 3 (commencing with Section 5800) for adults
19and seniors, Part 3.2 (commencing with Section 5830) for
20innovative programs, Part 3.6 (commencing with Section 5840)
21for prevention and early intervention programs, and Part 4
22(commencing with Section 5850) for services for children, and
23updates to the plans developed pursuant to this section. Each
24expenditure update shall indicate the number of children, adults,
25and seniors to be served pursuant to Part 3 (commencing with
26Section 5800), and Part 4 (commencing with Section 5850), and
27the cost per person. The expenditure update shall include utilization
28of unspent funds allocated in the previous year and the proposed
29expenditure for the same purpose.

30(f) A county mental health program shall include an allocation
31of funds from a reserve established pursuant to paragraph (7) of
32subdivision (b) for services pursuant to paragraphs (2) and (3) of
33subdivision (b) in years in which the allocation of funds for services
34pursuant to subdivision (e) are not adequate to continue to serve
35the same number of individuals as the county had been serving in
36the previous fiscal year.

begin insert

37
(g) The department shall post on its website the three-year
38program and expenditure plans submitted by every county pursuant
39to subdivision (a) in a timely manner.

end insert
P11   1begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 5848 of the end insertbegin insertWelfare and Institutions Codeend insertbegin insert is
2amended to read:end insert

3

5848.  

(a) Each three-year program and expenditure plan and
4update shall be developed with local stakeholders, including adults
5 and seniors with severe mental illness, families of children, adults,
6and seniors with severe mental illness, providers of services, law
7enforcement agencies, education, social services agencies, veterans,
8representatives from veterans organizations, providers of alcohol
9and drug services, health care organizations, and other important
10interests. Counties shall demonstrate a partnership with constituents
11and stakeholders throughout the process that includes meaningful
12stakeholder involvement on mental health policy, program
13planning, and implementation, monitoring, quality improvement,
14evaluation, and budget allocations. A draft plan and update shall
15be prepared and circulated for review and comment for at least 30
16days to representatives of stakeholder interests and any interested
17party who has requested a copy of the draft plans.

18(b) The mental health board established pursuant to Section
195604 shall conduct a public hearing on the draft three-year program
20and expenditure plan and annual updates at the close of the 30-day
21comment period required by subdivision (a). Each adopted
22three-year program and expenditure plan and update shall include
23any substantive written recommendations for revisions. The
24adopted three-year program and expenditure plan or update shall
25summarize and analyze the recommended revisions. The mental
26health board shall review the adopted plan or update and make
27recommendations to the county mental health department for
28revisions.

29(c) The plans shall include reports on the achievement of
30performance outcomes for services pursuant to Part 3 (commencing
31with Section 5800), Part 3.6 (commencing with Section 5840),
32and Part 4 (commencing with Section 5850) funded by the Mental
33Health Services Fund and established jointly by the State
34Department of Health Care Services and the Mental Health Services
35Oversight and Accountability Commission, in collaboration with
36the County Behavioral Health Directors Association of California.

37(d) Mental health services provided pursuant to Part 3
38(commencing with Section 5800) and Part 4 (commencing with
39Section 5850) shall be included in the review of program
40performance by the California Mental Health Planning Council
P12   1required by paragraph (2) of subdivision (c) of Section 5772 and
2in the local mental health board’s review and comment on the
3performance outcome data required by paragraph (7) of subdivision
4(a) of Section 5604.2.

begin insert

5
(e) The department shall annually post on its website a summary
6of the performance outcomes reports submitted by counties if
7clearly and separately identified by counties as the achievement
8of performance outcomes pursuant to subdivision (c).

end insert
9

begin deleteSEC. 3.end delete
10
begin insertSEC. 5.end insert  

Part 3.9 (commencing with Section 5849.1) is added
11to Division 5 of the Welfare and Institutions Code, to read:

12 

13PART 3.9.  The No Place Like Home Program

14

 

15

5849.1.  

(a) The Legislature finds and declares that this part is
16consistent with and furthers the purposes of the Mental Health
17Services Act, enacted by Proposition 63 at the November 2, 2004,
18statewide general election, within the meaning of Section 18 of
19that measure.

20(b) The Legislature further finds and declares all of the
21following:

22(1) Housing is a key factor for stabilization and recovery to
23occur and results in improved outcomes for individuals living with
24a mental illness.

25(2) Untreated mental illness can increase the risk of
26homelessness, especially for single adults.

27(3) California has the nation’s largest homeless population that
28is disproportionally comprised of women with children, veterans,
29and the chronically homeless.

30(4) California has the largest number of homeless veterans in
31the United States at 24 percent of the total population in our nation.
32Fifty percent of California’s veterans live with serious mental
33illness and 70 percent have a substance use disorder.

34(5) Fifty percent of mothers experiencing homelessness have
35experienced a major depressive episode since becoming homeless
36and 36 percent of these mothers live with post-traumatic stress
37disorder and 41 percent have a substance use disorder.

38(6) Ninety-three percent of supportive housing tenants who live
39with mental illness and substance use disorders voluntarily
40participated in the services offered.

P13   1(7) Adults who receive 2 years of “whatever-it-takes,” or Full
2Service Partnership services, experience a 68 percent reduction in
3homelessness.

4(8) For every dollar of bond funds invested in permanent
5supportive housing, the state and local governments can leverage
6a significant amount of additional dollars through tax credits,
7Medicaid health services funding, and other housing development
8funds.

9(9) Tenants of permanent supportive housing reduced their visits
10to the emergency department by 56 percent, and their hospital
11admissions by 45 percent.

12(10) The cost in public services for a chronically homeless
13Californian ranges from $60,000 to $100,000 annually. When
14housed, these costs are cut in half and some reports show reductions
15in cost of more than 70 percent, including potentially less
16involvement with the health and criminal justice systems.

17(11) Californians have identified homelessness as their top tier
18priority; this measure seeks to address the needs of the most
19vulnerable people within this population.

20(12) Having counties provide mental health programming and
21services is a benefit to the state.

22

5849.2.  

As used in this part, the following definitions shall
23apply:

24(a) “At risk of chronic homelessness” includes, but is not limited
25to, persons who are at high risk of long-term or intermittent
26homelessness, including persons with mental illness exiting
27institutionalized settings, including, but not limited to, jail and
28mental health facilities, who were homeless prior to admission,
29transition age youth experiencing homelessness or with significant
30barriers to housing stability, and others, as defined in program
31guidelines.

32(b) “Chronically homeless” has the same meaning as defined
33in Section 578.3 of Title 24 of the Code of Federal Regulations,
34as that section read on May 1, 2016.

35(c) “Committee” means the No Place Like Home Program
36Advisory Committee established pursuant to Section 5849.3.

37(d) “County” includes, but is not limited to, a city and county.

38(e) “Department” means the Department of Housing and
39Community Development.

P14   1(f) “Development sponsor” has the same meaning as “sponsor”
2as defined in Section 50675.2 of the Health and Safety Code.

3(g) “Fund” means the No Place Like Home Fund established
4pursuant to Section 5849.4.

5(h) “Homeless” has the same meaning as defined in Section
6578.3 of Title 24 of the Code of Federal Regulations, as that section
7read on May 1, 2016.

8(i) “Permanent supportive housing” has the same meaning as
9“supportive housing,” as defined in Section 50675.14 of the Health
10and Safety Code, except that “permanent supportive housing” shall
11include associated facilities if used to provide services to housing
12residents.

13(j) “Program” means the process for awarding funds and
14distributing moneys to applicants established in Sections 5849.7,
155849.8, and 5849.9.

16(1) “Competitive program” means that portion of the program
17established by Section 5849.8.

18(2) “Distribution program” means that portion of the program
19described in Section 5849.9.

20(k) “Target population” means individuals or households as
21provided in Section 5600.3 who are homeless, chronically
22homeless, or at risk of chronic homelessness.

23

5849.3.  

(a) There is hereby established the No Place Like
24Home Program Advisory Committee. Membership on the
25committee shall be as follows:

26(1) The Director of Housing and Community Development, or
27his or her designee, who shall serve as the chairperson of the
28committee.

29(2) The Director of Health Care Services, or his or her designee,
30and an additional representative.

31(3) The Secretary of Veterans Affairs, or his or her designee.

32(4) The Director of Social Services, or his or her designee.

33(5) The Treasurer, or his or her designee.

34(6) The chair of the Mental Health Services Oversight and
35Accountability Commission, or his or her designee.

36(7) A chief administrative officer of a small county or a member
37of a county board of supervisors of a small county, as provided by
38subdivision (d) of Section 5489.6, to be appointed by the Governor.

P15   1(8) A chief administrative officer of a large county or a member
2of a county board of supervisors of a large county, as provided by
3subdivision (b) of Section 5489.6, to be appointed by the Governor.

4(9) A director of a county behavioral health department, to be
5appointed by the Governor.

6(10) An administrative officer of a city, to be appointed by the
7Governor.

8(11) A representative of an affordable housing organization, to
9be appointed by the Speaker of the Assembly.

10(12) A resident of supportive housing, to be appointed by the
11Governor.

12(13) A representative of a community mental health
13organization, to be appointed by the Senate Rules Committee.

14(14) A representative of a local or regional continuum of care
15organization that coordinates homelessness funding, to be
16appointed by the Governor.

17(b) The committee shall do all of the following:

18(1) Assist and advise the department in the implementation of
19the program.

20(2) Review and make recommendations on the department’s
21guidelines.

22(3) Review the department’s progress in distributing moneys
23pursuant to this part.

24(4) Provide advice and guidance more broadly on statewide
25homelessness issues.

26

5849.4.  

(a) The No Place Like Home Fund is hereby created
27within the State Treasury and, notwithstanding Section 13340 of
28the Government Code, continuously appropriated to the department
29for the purposes of this part. The department may use up to five
30percent of the amount deposited in the fund for administrative
31expenses in implementing this part.

32(b) There shall be paid into the fund the following:

33(1) Any proceeds from the issuance of bonds by the Treasurer
34for the purpose of implementing the program.

35(2) Any other federal or state grant, or from any private donation
36or grant, for the purposes of this part.

37(3) Any interest payment, loan repayments, or other return of
38funds.

39

5849.5.  

(a) The department may adopt guidelines or
40regulations, in consultation with the California State Association
P16   1of Counties and other stakeholders, as necessary to exercise the
2powers and perform the duties conferred or imposed on it by this
3part. Any guideline or regulation adopted pursuant to this section
4shall not be subject to the requirements of the Administrative
5Procedure Act (Chapter 3.5 (commencing with Section 11340) of
6Part 1 of Division 3 of Title 2 of the Government Code). The
7department shall consult with key stakeholders, including, but not
8limited to, counties.

9(b) The department may adopt emergency regulations in order
10to expedite the award of moneys pursuant to this part.

11

5849.6.  

For the purpose of administering Sections 5849.7 and
125849.8, the department shall organize counties into the following
13competitive groupings based on population:

14(a) The County of Los Angeles.

15(b) Large counties with a population greater than 750,000.

16(c) Medium counties with a population between 200,000 to
17750,000.

18(d) Small counties with a population less than 200,000.

19The competitive program shall distribute funding among the
20groupings based on a calculation made by the department that shall
21include the number of homeless persons residing within each
22county, as determined by the department, and considers minimum
23funding levels necessary for a permanent supportive housing
24development. The department, at its discretion, may consider other
25factors in the calculation if it supports the objectives of this part.

26

5849.7.  

(a) The department shall administer a competitive
27program, pursuant to Section 5849.8, and distribution program,
28pursuant to Section 5849.9, for awarding a total of two billion
29dollars ($2,000,000,000) among counties to finance capital costs
30including, but not limited to, acquisition, design, construction,
31rehabilitation, or preservation, and to capitalize operating reserves,
32of permanent supportive housing for the target population.

33(b) For the competitive program established by Section 5849.8,
34the following shall apply:

35(1) A county may apply as the sole applicant if it is the
36development sponsor or jointly with a separate entity as
37development sponsor.

38(2) Funded developments shall integrate the target population
39with the general public.

P17   1(3) Funded developments shall utilize low barrier tenant
2selection practices that prioritize vulnerable populations and offer
3flexible, voluntary, and individualized supportive services.

4(4) The guidelines may provide for alternative housing models,
5such as shared housing models of fewer than five units. Integration
6requirements may be modified in shared housing.

7(5) Funds shall be offered as deferred payment loans to finance
8capital costs including acquisition, design, construction,
9rehabilitation, or preservation, and to capitalize operating reserves
10of, permanent supportive housing for the target population.

11(6) The department shall adopt guidelines establishing income
12and rent standards.

13

5849.8.  

(a) One billion eight hundred million dollars
14($1,800,000,000) shall be allocated from the fund for the purposes
15of the competitive program. The department shall develop a
16competitive application process for the purpose of awarding
17moneys pursuant to this section. In considering applications, the
18department shall do all of the following:

19(1) Restrict eligibility to applicants that meet the following
20minimum criteria:

21(A) The county commits to provide mental health supportive
22services and to coordinate the provision of or referral to other
23services, including, but not limited to, substance use treatment
24services, to the tenants of the supportive housing development for
25at least 20 years. Services shall be provided onsite at the supportive
26housing development or in a location otherwise easily accessible
27to tenants. The county may use, but is not restricted to using, any
28of the following available funding sources as allowed by state and
29federal law:

30(i) The Local Mental Health Services Fund established pursuant
31to subdivision (f) of Section 5892.

32(ii) The Mental Health Account within the Local Health Welfare
33Trust Fund established pursuant to Section 17600.10.

34(iii) The Behavioral Health Subaccount within the County Local
35Revenue Fund 2011 established pursuant to paragraph (4) of
36subdivision (f) of Section 30025 of the Government Code.

37(iv) Funds received from other private or public entities.

38(v) Other county funds.

39(B) The county has developed a county plan to combat
40homelessness, which includes a description of homelessness
P18   1countywide, any special challenges or barriers to serving the target
2population, county resources applied to address the issue, available
3community-based resources, an outline of partners and
4collaborations, and proposed solutions.

5(C) Meet other threshold requirements including, but not limited
6to, developer capacity to develop, own, and operate a permanent
7supportive housing development for the target population,
8application proposes a financially feasible development with
9reasonable development costs.

10(2) The department shall evaluate applications using, at
11minimum, the following criteria:

12(A) The extent to which units assisted by the program are
13restricted to persons who are chronically homeless or at risk of
14chronic homelessness within the target population.

15(B) The extent to which funds are leveraged for capital costs.

16(C) The extent to which projects achieve deeper affordability
17through the use of non-state project-based rental assistance,
18operating subsidies, or other funding.

19(D) Project readiness.

20(E) The extent to which applicants offer a range of on and
21off-site supportive services to tenants, including mental health
22services, behavioral health services, primary health, employment,
23and other tenancy support services.

begin insert

24
(F) Past history of implementing programs that use
25evidence-based best practices that have led to the reduction of the
26number of chronic homeless or at risk of chronic homelessness
27individuals within the target population.

end insert

28(b) The department may establish an alternative process for
29allocating funds directly to counties, as calculated in Section
305849.6, with at least five percent of the state’s homeless population
31and that demonstrate the capacity to directly administer loan funds
32for permanent supportive housing serving the target population
33and the ability to prioritize individuals with mental health
34supportive needs who are homeless or at risk of chronic
35homelessness, consistent with this part and as determined by the
36department. The department shall adopt guidelines establishing
37the parameters of an alternative process, if any, and requirements
38for local administration of funds, including, but not limited to,
39project selection process, eligible use of funds, loan terms, rent
40and occupancy restrictions, provision of services, and reporting
P19   1and monitoring requirements. Counties participating in the
2alternative process shall not be eligible for the competitive process
3and shall be limited tofunds in proportion to their share of the
4percentage of the statewide homeless population, as calculated by
5the department in Section 5849.6. Funds not committed to
6supportive housing developments within two years following award
7of funds to counties shall be returned to the state for the purposes
8of the competitive program. The department shall consider the
9following when selecting participating counties:

10(1) Demonstrated ability to finance permanent supportive
11housing with local and federal funds, and monitor requirements
12for the life of the loan.

13(2) Past history of delivering supportive services to the target
14population in housing.

15(3) Past history of committing project-based vouchers to
16supportive housing.

17(4) Ability to prioritize the most vulnerable within the target
18population through coordinated entry system.

19(c) The department shall set aside 8 percent of funds offered in
20Rounds 1 through 4, inclusive, for small counties as provided in
21subdivision (d) of Section 5849.6.

22(d) The department shall award funds in at least four rounds as
23follows:

24(1) The department shall issue its first request for proposal for
25the competitive program no later than 180 days after any deadline
26for appeals as set forth in Section 870 of the Code of Civil
27Procedure.

28(2) The second round shall be completed no later than one year
29after the completion of the first round.

30(3) The third round shall be completed no later than one year
31after the completion of the second round.

32(4) The fourth round shall be completed no later than one year
33after the completion of the third round.

34(5) Subsequent rounds shall occur annually thereafter in order
35to fully exhaust remaining funds and the department may
36discontinue the use of the competitive groupings in Section 5849.6,
37the alternative process in subdivision (b) for any funds not awarded
38by the county, and the rural set aside funds as set forth in
39subdivision (c).

P20   1(e) (1) Any loans made by the department pursuant to this
2section shall be in the form of secured deferred payment loans to
3pay for the eligible costs of development. Principal and
4accumulated interest is due and payable upon completion of the
5term of the loan, which shall be established through program
6guidelines adopted pursuant to Section 5849.5. The loan shall bear
7simple interest at a rate of three percent per annum on the unpaid
8principal balance. The department shall require annual loan
9payments in the minimum amount necessary to cover the costs of
10project monitoring. For the first 15 years of the loan term, the
11amount of the required loan payments shall not exceed forty-two
12hundredths of 1 percent per annum.

13(2) The department may establish maximum loan-to-value
14requirements for some or all of the types of projects that are eligible
15for funding under this part, which shall be established through
16program guidelines adopted pursuant to Section 5849.5.

17(3) The department shall establish per-unit and per-project loan
18limits for all project types.

19(f) (1) The department may designate an amount not to exceed
20four percent of funds allocated for the competitive program, not
21including funding allocated pursuant to subdivision (b), in order
22to cure or avert a default on the terms of any loan or other
23obligation by the recipient of financial assistance, or bidding at
24any foreclosure sale where the default or foreclosure sale would
25jeopardize the department’s security in the rental housing
26development assisted pursuant to this part. The funds so designated
27shall be known as the “default reserve.”

28(2) The department may use default reserve funds made
29available pursuant to this section to repair or maintain any rental
30housing development assistance pursuant to this part to protect the
31department’s security interest.

32(3) The payment or advance of funds by the department pursuant
33to this subdivision shall be exclusively within the department’s
34discretion, and no person shall be deemed to have any entitlement
35to the payment or advance of those funds. The amount of any funds
36expended by the department for the purposes of curing or averting
37a default shall be added to the loan amount secured by the rental
38housing development and shall be payable to the department upon
39demand.

P21   1(g) (1) Prior to disbursement of any funds for loans made
2pursuant this section, the department shall enter into a regulatory
3agreement with the development sponsor that provides for all of
4the following:

5(A) Sets standards for tenant selection to ensure occupancy of
6assisted units by eligible households of very low and low income
7for the term of the agreement.

8(B) Governs the terms of occupancy agreements.

9(C) Contains provisions to maintain affordable rent levels to
10serve eligible households.

11(D) Provides for periodic inspections and review of year-end
12fiscal audits and related reports by the department.

13(E) Permits a developer to distribute earnings in an amount
14established by the department and based on the number of units
15in the rental housing development.

16(F) Has a term for not less than the original term of the loan.

17(G) Contains any other provisions necessary to carry out the
18purposes of this part.

19(2) The agreement shall be binding upon the developer and
20successors in interest upon sale or transfer of the rental housing
21development regardless of any prepayment of the loan.

22(3) The agreement shall be recorded in the office of the county
23recorder in the county in which the real property subject to the
24agreement is located.

25

5849.9.  

(a) In addition to the competitive program established
26by Section 5849.8, the department shall distribute two hundred
27million dollars ($200,000,000) from the fund on an
28“over-the-counter” basis to finance the construction, rehabilitation,
29or preservation, and to capitalize operating reserves, of permanent
30supportive housing for individuals in the target population with a
31priority for those with mental health supportive needs who are
32homeless or at risk of chronic homelessness. Funds to be awarded
33pursuant to this section shall be available to all counties within the
34state proportionate to the number of homeless persons residing
35within each county as calculated in Section 5849.6 or in the amount
36of five hundred thousand dollars ($500,000), whichever is greater.

37(b) Funds not awarded within 18 months following the first
38allocation of moneys in accordance with subdivision (d) shall be
39used for the purposes of the competitive program.

P22   1(c) The moneys described in subdivision (a) shall be
2administered either in accordance with the procedures for awarding
3funds to local agencies established by the existing Mental Health
4Services Act housing program administered by the Department of
5Health Care Services and the California Housing Finance Agency
6or alternative procedures developed by the department for
7distributing these moneys that enhance the efficiency and goals of
8the distribution program.

9(d) The department shall make the first allocation of moneys
10pursuant to this section no later than 60 days after any deadline
11for appeals as set forth in Section 870 of the Code of Civil
12 Procedure.

13

5849.10.  

(a) The sum of six million two hundred thousand
14dollars ($6,200,000) is hereby appropriated from the Mental Health
15Services Fund to the department to provide technical and
16application preparation assistance to counties.

17(b) Eligible use of technical and application preparation
18assistance shall include, but is not limited to, assistance in
19performing one or more of the following activities:

20(1) Applying for program funds.

21(2) Implementing activities funded by moneys distributed
22pursuant to this part, including the development of supportive
23housing for the target population.

24(3) Coordinating funded activities with local homelessness
25systems, including coordinated access systems developed pursuant
26to Section 578.7(a)(8) of Title 24 of the Code of Federal
27Regulations, as that section read on May 1, 2016.

28(4) Delivering a range of supportive services to tenants.

29(5) Collecting data, evaluating program activities, and sharing
30data among multiple systems, such as the Mental Health Services
31Act, enacted by Proposition 63 at the November 2, 2004, statewide
32general election, the Medi-Cal Act (Chapter 7 (commencing with
33Section 14000) of Part 3 of Division 9) and implementing
34regulations, and homelessness systems.

35(c) The department shall provide funds to a county upon
36application as follows:

37(1) To a large county and to the County of Los Angeles, the
38department shall provide one hundred fifty thousand dollars
39($150,000).

P23   1(2) To a medium county, the department shall provide one
2hundred thousand dollars ($100,000).

3(3) To a small county, the department shall provide seventy-five
4thousand dollars ($75,000).

5(d) If a county does not expend the moneys allocated pursuant
6to subdivision (c) by June 30, 2020, those moneys shall be used
7to augment the funding pursuant to subdivision (e).

8(e) The department may contract for expert technical assistance
9and application preparation assistance. The department shall deploy
10such assistance to counties based upon a process to be defined in
11 guidelines.

12(f) The department may establish a unit for the purpose of
13providing technical assistance to counties.

14

5849.11.  

(a) The counties shall annually report to the
15department on activities funded under this part, including
16information on the funded supportive housing development.
17Reported information shall include location of projects, number
18of units assisted, occupancy restrictions, number of individuals
19and households served, related income levels, and homeless,
20veteran, and mental health status

21(b) The department shall submit a report on the program to the
22Legislature by December 31 of each year, commencing with the
23year after the first full year in which the program is in effect. The
24report shall contain the following:

25(1) The processes established for distributing funds.

26(2) The distribution of funds among counties.

27(3) Any recommendations as to modifications to the program
28for the purpose of improving efficiency or furthering the goals of
29the program.

30(c) The report required to be submitted by subdivision (b) shall
31be submitted in compliance with Section 9795 of the Government
32Code.

33

5849.12.  

(a) Upon an appropriation of funds for the purpose
34of this section, the department shall contract with a public or private
35research university in this state to evaluate the program. The
36department shall develop the research design and issue a request
37for proposal for a contract for the evaluation, with the assistance
38of the Legislative Analyst’s Office and the Department of Finance.

39(b) The department shall submit the final research design and
40request for proposal required by subdivision (a) to the Chairperson
P24   1of the Joint Legislative Budget Committee no more than 30 days
2prior to executing a contract for the evaluation.

3

5849.13.  

An action to determine the legality of any action by
4the department pursuant to this part may be brought pursuant to
5Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of
6the Code of Civil Procedure.

7

5849.14.  

The Department of Finance may authorize a loan
8from the General Fund to the No Place Like Home Fund for
9cashflow purposes in an amount not to exceed one million dollars
10($1,000,000) subject to the following conditions:

11(a) The loan is to allow the department to begin program
12implementation activities, including, but not limited to, drafting
13program guidelines and regulations.

14(b) The loan is short term, and shall be repaid within 30 days
15after the deposit of bond proceeds into the fund pursuant to
16paragraph (1) of subdivision (b) of Section 5849.4.

17(c) Interest charges may be waived pursuant to subdivision (e)
18of Section 16314 of the Government Code.

19begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 5897 of the end insertbegin insertWelfare and Institutions Codeend insertbegin insert is
20amended to read:end insert

21

5897.  

(a) Notwithstanding any other provision of state law,
22the State Department of Health Care Services shall implement the
23mental health services provided by Part 3 (commencing with
24Section 5800), Part 3.6 (commencing with Section 5840), and Part
254 (commencing with Section 5850) through contracts with county
26mental health programs or counties acting jointly. A contract may
27be exclusive and may be awarded on a geographic basis. For
28purposes of this section, a county mental health program includes
29a city receiving funds pursuant to Section 5701.5.

30(b) Two or more counties acting jointly may agree to deliver or
31subcontract for the delivery of those mental health services. The
32agreement may encompass all or any part of the mental health
33services provided pursuant to these parts. Any agreement between
34counties shall delineate each county’s responsibilities and fiscal
35liability.

36(c) The department shall implement the provisions of Part 3
37(commencing with Section 5800), Part 3.2 (commencing with
38Section 5830), Part 3.6 (commencing with Section 5840), and Part
394 (commencing with Section 5850) through the annual county
P25   1mental health services performance contract, as specified in Chapter
22 (commencing with Section 5650) of Part 2.

begin insert

3
(d) The department shall conduct program reviews of
4performance contracts to determine compliance. Each county
5performance contract shall be reviewed at least once every three
6years, subject to available funding for this purpose.

end insert
begin delete

7(d)

end delete

8begin insert(e)end insert When a county mental health program is not in compliance
9with its performance contract, the department may request a plan
10of correction with a specific timeline to achieve improvements.
11
begin insert The department shall post on its website any plans of correction
12requested and the related findings.end insert

begin delete

13(e)

end delete

14begin insert(f)end insert Contracts awarded by the State Department of Health Care
15Services, the State Department of Public Health, the California
16Mental Health Planning Council, the Office of Statewide Health
17Planning and Development, and the Mental Health Services
18Oversight and Accountability Commission pursuant to Part 3
19(commencing with Section 5800), Part 3.1 (commencing with
20Section 5820), Part 3.2 (commencing with Section 5830), Part 3.6
21(commencing with Section 5840), Part 3.7 (commencing with
22Section 5845), Part 4 (commencing with Section 5850), and Part
234.5 (commencing with Section 5890), may be awarded in the same
24manner in which contracts are awarded pursuant to Section 5814
25and the provisions of subdivisions (g) and (h) of Section 5814 shall
26apply to those contracts.

begin delete

27(f)

end delete

28begin insert(g)end insert For purposes of Section 14712, the allocation of funds
29pursuant to Section 5892 which are used to provide services to
30Medi-Cal beneficiaries shall be included in calculating anticipated
31county matching funds and the transfer to the State Department
32of Health Care Services of the anticipated county matching funds
33needed for community mental health programs.

34begin insert

begin insertSEC. 7.end insert  

end insert

begin insertSection 5899 of the end insertbegin insertWelfare and Institutions Codeend insertbegin insert is
35amended to read:end insert

36

5899.  

(a) The State Department of Health Care Services, in
37consultation with the Mental Health Services Oversight and
38Accountability Commission and the County Behavioral Health
39Directors Association of California, shall develop and administer
40instructions for the Annual Mental Health Services Act Revenue
P26   1and Expenditure Report.begin insert The instructions shall include a
2requirement that the county certify the accuracy of this report.end insert

3 This report shall be submitted electronically to the department and
4to the Mental Health Services Oversight and Accountability
5Commission.begin insert The department and the commission shall annually
6post each county’s report on its website in a timely manner.end insert

begin insert

7
(b) The department, in consultation with the commission and
8the County Behavioral Health Directors Association of California,
9shall revise the instructions described in subdivision (a) by July
101, 2017, and as needed thereafter, to improve the timely and
11accurate submission of county revenue and expenditure data.

end insert
begin delete

12(b)

end delete

13begin insert(c)end insert The purpose of the Annual Mental Health Services Act
14Revenue and Expenditure Report is as follows:

15(1) Identify the expenditures of Mental Health Services Act
16(MHSA) funds that were distributed to each county.

17(2) Quantify the amount of additional funds generated for the
18mental health system as a result of the MHSA.

19(3) Identify unexpended funds, and interest earned on MHSA
20funds.

21(4) Determine reversion amounts, if applicable, from prior fiscal
22year distributions.

begin delete

23(c)

end delete

24begin insert(d)end insert This report is intended to provide information that allows
25for the evaluation of all of the following:

26(1) Children’s systems of care.

27(2) Prevention and early intervention strategies.

28(3) Innovative projects.

29(4) Workforce education and training.

30(5) Adults and older adults systems of care.

31(6) Capital facilities and technology needs.

begin insert

32
(e) If a county does not submit the annual revenue and
33expenditure report described in subdivision (a) by the required
34deadline, the department may withhold MHSA funds until the
35reports are submitted.

end insert
36

begin deleteSEC. 4.end delete
37
begin insertSEC. 8.end insert  

The Legislature finds and declares that this act furthers
38the intent of the Mental Health Services Act, enacted by
39Proposition 63 at the November 2, 2004, statewide general election.

P27   1It is intent of the Legislature that the costs to service the debt
2for the bond authorized by this act shall not impede in any way
3the direct mental health services provided by counties, and that
4the counties shall maximize the use of all available state, federal,
5and local funding sources, including those listed in Section 5849.7
6of the Welfare and Institutions Code, to support direct local mental
7health services.

8

begin deleteSEC. 5.end delete
9
begin insertSEC. 9.end insert  

This act is a bill providing for appropriations related
10to the Budget Bill within the meaning of subdivision (e) of Section
1112 of Article IV of the California Constitution, has been identified
12as related to the budget in the Budget Bill, and shall take effect
13immediately.



O

    94