Bill Text: CA SB858 | 2015-2016 | Regular Session | Amended
Bill Title: No Place Like Home Program: financing.
Spectrum: Unknown
Status: (Failed) 2016-11-30 - From Assembly without further action. [SB858 Detail]
Download: California-2015-SB858-Amended.html
BILL NUMBER: SB 858 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 18, 2016
AMENDED IN ASSEMBLY AUGUST 8, 2016
AMENDED IN ASSEMBLY MAY 25, 2016
INTRODUCED BY Committee on Budget and Fiscal Review
JANUARY 7, 2016
An act to add Section 15463 to the Government Code, and to amend
Sections 5849.1, 5849.2, 5849.3, 5849.4, 5849.5, 5849.7, 5849.8,
5849.9, 5849.11, 5849.14, 5890, and 5891 of, to add Section 5849.35
to, and to repeal and add Section 5849.13 of, the Welfare and
Institutions Code, relating to mental health services, and making an
appropriation therefor, to take effect immediately, bill related to
the budget.
LEGISLATIVE COUNSEL'S DIGEST
SB 858, as amended, Committee on Budget and Fiscal Review. No
Place Like Home Program: financing.
(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 2/3
2/3 vote, provided that the amendment
is consistent with and furthers the intent of the act.
Existing law, known as the No Place Like Home Program, requires
the Department of Housing and Community Development to award
$2,000,000,000 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. Existing law requires the department to distribute
$1,800,000,000 through a competitive program and to allocate
$200,000,000 among all counties within this state on an
"over-the-counter" population basis.
The bill would authorize the California Health Facilities
Financing Authority and the department to, among other things, enter
into contracts to provide services pursuant to the No Place Like Home
Program related to permanent supportive housing. The bill would also
authorize the authority to issue taxable or tax-exempt revenue bonds
in an amount not to exceed $2,000,000,000 for these purposes and to
make secured or unsecured loans to the department in connection with
financing permanent supportive housing pursuant to the No Place Like
Home Program. The bill would require that the dollar limit on amounts
distributed under the No Place Like Home Program be based on the
principal amount of bonds issued by the authority and loaned to the
department.
The bill would additionally authorize the use of moneys in the
Mental Health Services Fund for the purposes of the No Place Like
Home Program. The bill would also establish and continuously
appropriate the Supportive Housing Program Subaccount in the Mental
Health Services Fund. The bill would require the Controller, no
later than the last day of each month and prior to
any transfer, deposit, transfer or
expenditure from the fund for any other purpose,
purpose for the following month, to transfer from the
Mental Health Services Fund to the Supportive Housing Program
Subaccount an amount necessary to cover the costs the authority is
required to pay to the department pursuant to an above-described
service contract, as determined by the authority but not to exceed an
aggregate amount of one hundred forty million
($140,000,000) $140,000,000 per year. The bill
would prohibit moneys in the Supportive Housing Program
Subaccount from being loaned to the General Fund pursuant to
specified statutes.
The bill would exempt service contracts between the department and
the authority pursuant to these provisions from specified public
contracting laws. The bill would also exempt loan agreements between
the department and the authority and revenue bonds issued by the
authority from any other law applicable to the execution of those
agreements or issuance of those bonds, including the California
Environmental Quality Act.
(2) Existing law establishes the No Place Like Home Fund and
continuously appropriates the moneys in this fund to the Department
of Housing and Community Development for the purposes of the No Place
Like Home Program. Existing law requires the deposit into the
fund of, among other moneys, any proceeds from the issuance of
bonds by the Treasurer.
This bill would instead require the department to deposit into the
fund the proceeds of loans derived from the issuance of bonds under
this bill by the California Health Facilities Financing Authority.
The bill would additionally continuously appropriate moneys in the
fund to the Treasurer and the authority for purposes of the No Place
Like Home Program.
(3) Existing law requires counties to annually report specified
information to the Department of Housing and Community Development on
activities funded under the No Place Like Home Program, including
information on the funded supportive housing development. Existing
law also requires the department to report specified information on
the program to the Legislature by December 31 of each year,
commencing with the year after the first full year in which the
program is in effect.
This bill would require the department to monitor county
compliance by counties with the grant and
with applicable program regulations, loan agreements and
regulatory agreements pursuant to which funds are
distributed pursuant to the competitive portion of the No Place Like
Home Program and any agreements related to the program
that designate the department as a 3rd party beneficiary, and
enforce those agreements to the extent necessary and desirable in
order to provide, to the greatest degree possible, the successful
provision of permanent supportive housing. The bill would require the
department to submit a report to the California Health Facilities
Financing Authority by December 31 of each year, commencing with the
year after the first full year in which the program is in effect,
that contains specified information about the counties participating
in the program and the services that have been provided pursuant to
any service contracts between the department and the authority, as
described above.
(4) Existing law establishes a procedure by which a public agency
may bring an action in the superior court to determine the validity
of any matter authorized by other law. Existing law authorizes an
action under this procedure to determine the legality of any action
by the Department of Housing and Community Development related to the
No Place Like Home Program. Existing law requires the department to
issue its first request for proposal for the competitive program no
later than 180 days, and to make its first allocation of
"over-the-counter" funds within 60 days, after the deadline for
appeals under the validation procedure.
This bill would recast this authorization to instead authorize an
action to determine the validity of any service contract or loan
agreement between the department and the California Health Facilities
Financing Authority, as described above, in accordance with
specified provisions governing actions to determine the validity of
bonds, warrants, contracts, obligations, or evidences of
indebtedness. The bill would instead require the department to issue
its first request for proposal no later than 180 days, and to make
its first allocation of "over-the-counter" funds as soon as
reasonably practical, but no later than 150 days, after the effective
date of a final judgment with no further opportunity for
appeals appeals, in any court proceeding
affirming the validity of the service contracts between the
department and the authority and any bonds issued by the authority.
(5) Existing law authorizes the Department of Finance to authorize
a loan from the General Fund to the No Place Like Home Fund for
cashflow purposes in an amount not to exceed $1,000,000. Existing law
requires that a loan comply with certain requirements, including
that the purpose of the loan is to allow the department to begin
implementation activities related to the No Place Like Home Program,
including drafting program guidelines and regulations.
This bill would instead authorize the Department of Finance to
authorize one or more loans from the General Fund to the No Place
Like Home Fund in an aggregate amount not to exceed $2,000,000. The
bill would additionally authorize loans for the purpose of allowing
the Department of Housing and Community Development, the California
Health Facilities Financing Authority, and the Treasurer to implement
the above-described provisions pertaining to service contracts and
loan agreements between the department and the authority and revenue
bonds issued by the authority.
(6) Existing law makes various findings and declarations regarding
the No Place Like Home Program.
This bill would make additional findings and declarations
pertaining to the financing and implementation of the No Place Like
Home Program. The bill would also make various technical and
conforming changes to the No Place Like Home Program.
(7) This bill would declare that its provisions further the intent
of the MHSA.
(8) This bill would declare that it is to take effect immediately
as a bill providing for appropriations related to the Budget Bill.
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. Section 15463 is added to the Government Code, to read:
15463. (a) For purposes of this section, the following
definitions shall apply:
(1) "No Place Like Home Program" has the same meaning as "program"
as defined in Section 5849.2 of the Welfare and Institutions Code.
(2) "No Place Like Home Fund" means the No Place Like Home Fund
established pursuant to Section 5849.4 of the Welfare and
Institutions Code.
(3) "Permanent supportive housing" has the same meaning as
"supportive housing" as defined in Section 50675.14 of the Health and
Safety Code, except that "permanent supportive housing" shall
include associated facilities if used to provide services to housing
residents.
(b) The authority may issue taxable or tax-exempt revenue bonds in
an amount not to exceed two billion dollars ($2,000,000,000),
exclusive of refunding bonds but including any net premium derived
from the sale of the bonds, pursuant to Sections 15441 to 15450,
inclusive, for the purpose of financing permanent supportive housing
pursuant to the No Place Like Home Program or to refund
bonds previously issued pursuant to this section. and
through loans under subdivision (d). The authority may also
utilize bond proceeds to fund necessary reserves,
reserves for principal and interest, capitalized interest,
credit enhancement or liquidity costs, or costs
of issuance. issuance,
administrative expenses under Section 5849.4 of the Welfare and
Institutions Code, and to reimburse loans under Section 5849.14 of
the Welfare and Institutions Code.
(c) The authority may provide for the issuance of bonds of the
authority for the purpose of redeeming, refunding, or retiring any
bonds or any series or issue of bonds then outstanding issued under
subdivision (b), including the payment of any redemption premium
thereon and any interest accrued or to accrue to the date of
redemption, purchase, or maturity of the bonds. Subdivisions (b) and
(c) of Section 15446 apply to, and in connection with, bonds issued
under this subdivision. Sections 15441 to 15445, inclusive, and
Sections 15447 to 15450, inclusive, apply to, and in connection with,
bonds issued under this subdivision in the same manner and to the
same extent as bonds issued under subdivision (b).
(c)
(d) The authority may make secured or unsecured loans
to the Department of Housing and Community Development in connection
with financing permanent supportive housing pursuant to the No Place
Like Home Program or to refund bonds previously issued pursuant to
this section, in accordance with an agreement between the authority
and the Department of Housing and Community Development. Loan
proceeds may also be used to fund reserves for principal and
interest, capitalized interest, credit enhancement and liquidity
costs, expenses of funding, financing, and refinancing,
administrative expenses under Section 5849.4 of the Welfare and
Institutions Code, and to reimburse loans under Section 5849.14 of
the Welfare and Institutions Code.
(d) The
(e) Each of the authority
and the Department of Housing and Community Development may
enter into any agreement for credit enhancement or liquidity, execute
any instruments, and do any other acts it deems necessary,
convenient, or desirable in connection with revenue bonds issued
pursuant to this section or carry out any power expressly granted
pursuant to this section.
(e)
(f) (1) This section provides a complete, additional,
and alternative method for performing the acts authorized by this
section and shall be construed as supplemental and additional to
powers conferred by other laws; provided, however, that the issuance
of the bonds and refunding bonds and the execution of any agreements
under this section are not subject to, and need not comply with, the
requirements of any other law applicable to the issuance of those
bonds or refunding bonds and the execution of those agreements,
including, but not limited to, the California Environmental Quality
Act (Division 13 (commencing with Section 21000) of the Public
Resources Code).
(2) Except as provided in paragraph (1), the
funding or financing of permanent supportive
housing pursuant to the No Place Like Home Program pursuant to
under this section shall not exempt the
permanent supportive housing from the requirements of any other law
otherwise applicable to the project.
permanent supportive housing.
SEC. 2. Section 5849.1 of the Welfare and Institutions Code is
amended to read:
5849.1. (a) The Legislature finds and declares that this part is
consistent with and furthers the purposes of the Mental Health
Services Act, enacted by Proposition 63 at the November 2, 2004,
statewide general election, within the meaning of Section 18 of that
measure.
(b) The Legislature further finds and declares all of the
following:
(1) Housing is a key factor for stabilization and recovery to
occur and results in improved outcomes for individuals living with a
mental illness.
(2) Untreated mental illness can increase the risk of
homelessness, especially for single adults.
(3) California has the nation's largest homeless population that
is disproportionally comprised of women with children, veterans, and
the chronically homeless.
(4) California has the largest number of homeless veterans in the
United States at 24 percent of the total population in our nation.
Fifty percent of California's veterans live with serious mental
illness and 70 percent have a substance use disorder.
(5) Fifty percent of mothers experiencing homelessness have
experienced a major depressive episode since becoming homeless and 36
percent of these mothers live with post-traumatic stress disorder
and 41 percent have a substance use disorder.
(6) Ninety-three percent of supportive housing tenants who live
with mental illness and substance use disorders voluntarily
participated in the services offered.
(7) Adults who receive 2 years of "whatever-it-takes," or Full
Service Partnership services, experience a 68 percent reduction in
homelessness.
(8) For every dollar of bond funds invested in permanent
supportive housing, the state and local governments can leverage a
significant amount of additional dollars through tax credits,
Medicaid health services funding, and other housing development
funds.
(9) Tenants of permanent supportive housing reduced their visits
to the emergency department by 56 percent, and their hospital
admissions by 45 percent.
(10) The cost in public services for a chronically homeless
Californian ranges from $60,000 to $100,000 annually. When housed,
these costs are cut in half and some reports show reductions in cost
of more than 70 percent, including potentially less involvement with
the health and criminal justice systems.
(11) Californians have identified homelessness as their top tier
priority; this measure seeks to address the needs of the most
vulnerable people within this population.
(12) Having counties provide mental health programming and
services is a benefit to the state.
(13) The Department of Housing and Community Development is the
state entity with sufficient expertise to implement and oversee a
grant or loan program for permanent supportive housing of the target
population.
(14) The California Health Facilities Financing Authority is
authorized by law to issue bonds and to consult with the Mental
Health Services Oversight and Accountability Commission and the
State Department of Health Care Services concerning the
implementation of a grant or loan program for California counties to
support the development of programs that increase access to, and
capacity for, crisis mental health services. It is therefore
appropriate for the authority to issue bonds and contract for
services with the Department of Housing and Community Development to
provide grants or loans to California counties for permanent
supportive housing for the target population.
(15) Use of bond funding will accelerate the availability of
funding for the grant or loan program to provide permanent supportive
housing for the target population as compared to relying on annual
allocations from the Mental Health Services Fund and better allow
counties to provide permanent supportive housing for homeless
individuals living with mental illness.
(16) The findings and declarations set forth in subdivision (c) of
Section 5849.35 are hereby incorporated herein.
SEC. 3. Section 5849.2 of the Welfare and Institutions Code is
amended to read:
5849.2. As used in this part, the following definitions shall
apply:
(a) "At risk of chronic homelessness" includes, but is not limited
to, persons who are at high risk of long-term or intermittent
homelessness, including persons with mental illness exiting
institutionalized settings, including, but not limited to, jail and
mental health facilities, who were homeless prior to admission,
transition age youth experiencing homelessness or with significant
barriers to housing stability, and others, as defined in program
guidelines.
(b) "Authority" means the California Health Facilities Financing
Authority established pursuant to Part 7.2 (commencing with Section
15430) of Division 3 of Title 2 of the Government Code.
(c) "Chronically homeless" has the same meaning as defined in
Section 578.3 of Title 24 of the Code of Federal Regulations, as that
section read on May 1, 2016.
(d) "Commission" means the Mental Health Services Oversight and
Accountability Commission established by Section 5845.
(e) "Committee" means the No Place Like Home Program Advisory
Committee established pursuant to Section 5849.3.
(f) "County" includes, but is not limited to, a city and county,
and a city receiving funds pursuant to Section 5701.5.
(g) "Department" means the Department of Housing and Community
Development.
(h) "Development sponsor" has the same meaning as "sponsor" as
defined in Section 50675.2 of the Health and Safety Code.
(i) "Fund" means the No Place Like Home Fund established pursuant
to Section 5849.4.
(j) "Homeless" has the same meaning as defined in Section 578.3 of
Title 24 of the Code of Federal Regulations, as that section read on
May 1, 2016.
(k) "Permanent supportive housing" has the same meaning as
"supportive housing," as defined in Section 50675.14 of the Health
and Safety Code, except that "permanent supportive housing" shall
include associated facilities if used to provide services to housing
residents.
(l) "Program" means the process for awarding funds and
distributing moneys to applicants established in Sections 5849.7,
5849.8, and 5849.9 and the ongoing monitoring and enforcement of the
applicants' activities pursuant to Section
Sections 5849.8, 5849.9, and 5849.11.
(1) "Competitive program" means that portion of the program
established by Section 5849.8.
(2) "Distribution program" means that portion of the program
described in Section 5849.9.
(m) "Target population" means individuals or households as
provided in Section 5600.3 who are homeless, chronically homeless, or
at risk of chronic homelessness.
SEC. 4. Section 5849.3 of the Welfare and Institutions Code is
amended to read:
5849.3. (a) There is hereby established the No Place Like Home
Program Advisory Committee. Membership on the committee shall be as
follows:
(1) The Director of Housing and Community Development, or his or
her designee, who shall serve as the chairperson of the committee.
(2) The Director of Health Care Services, or his or her designee,
and an additional representative.
(3) The Secretary of Veterans Affairs, or his or her designee.
(4) The Director of Social Services, or his or her designee.
(5) The Treasurer, or his or her designee.
(6) The chair Chair of the Mental
Health Services Oversight and Accountability Commission, or his or
her designee.
(7) A chief administrative officer of a small county or a member
of a county board of supervisors of a small county, as provided by
subdivision (d) of Section 5849.6, to be appointed by the Governor.
(8) A chief administrative officer of a large county or a member
of a county board of supervisors of a large county, as provided by
subdivision (b) of Section 5849.6, to be appointed by the Governor.
(9) A director of a county behavioral health department, to be
appointed by the Governor.
(10) An administrative officer of a city, to be appointed by the
Governor.
(11) A representative of an affordable housing organization, to be
appointed by the Speaker of the Assembly.
(12) A resident of supportive housing, to be appointed by the
Governor.
(13) A representative of a community mental health organization,
to be appointed by the Senate Rules Committee.
Committee on Rules.
(14) A representative of a local or regional continuum of care
organization that coordinates homelessness funding, to be appointed
by the Governor.
(b) The committee shall do all of the following:
(1) Assist and advise the department in the implementation of the
program.
(2) Review and make recommendations on the department's
guidelines.
(3) Review the department's progress in distributing moneys
pursuant to this part.
(4) Provide advice and guidance more broadly on statewide
homelessness issues.
SEC. 5. Section 5849.35 is added to the Welfare and Institutions
Code, to read:
5849.35. (a) The authority may do all of the following:
(1) Consult with the commission and the State
Department of Health Care Services concerning the implementation of
the No Place Like Home Program, including the review of annual
reports provided to the authority by the department pursuant to
Section 5849.11.
(2) Enter into one or more contracts with the department for the
department to provide, and the authority to pay the department for
providing, services described in Sections 5849.7, 5849.8, and 5849.9,
related to permanent supportive housing for the target population.
Prior to entering into any contract pursuant to this paragraph, the
executive director of the authority shall transmit to the
commission a copy of the contract approved by the
authority to the commission. in substantially final
form. The contract shall be deemed approved by the commission
unless it acts within 10 days to disapprove the contract.
(3) On or before June 15 and December 15 of each year, the
authority shall notify certify to the
Controller of the amounts the authority is
required to pay as provided in Section 5890 for the following
six-month period to the department pursuant to any service contract
entered into pursuant to paragraph (2).
(b) The department may do all of the following:
(1) Enter into one or more contracts with the authority to provide
services described in Section Sections
5849.7, 5849.8, and 5849.9, related to permanent supportive housing
for the target population. Payments received by the department under
any service contract authorized by this paragraph shall be used,
prior to any other allocation or distribution, to repay loans from
the authority pursuant to Section 15463 of the Government Code.
(2) Enter into one or more loan agreements with the authority as
security for the repayment of the revenue bonds issued by the
authority pursuant to Section 15463 of the Government Code. The
department shall deposit the proceeds of these loans, excluding any
refinancing loans relating to refunding
to redeem, refund, or retire bonds, into the fund. The
department's obligation to repay obligations
to make payments under these loans loan
agreements shall be limited to
obligations payable solely from amounts received pursuant to
its service contracts with the authority.
(3) The department may pledge and assign its right to
receive all or a portion of the payments under the service
contracts entered into pursuant to paragraph (1) directly to the
authority or its bond trustee, which may be the Treasurer.
trustee for the payment of principal,
premiums, if any, and interest under any loan agreement authorized by
paragraph (2).
(c) The Legislature hereby finds and declares both of the
following:
(1) The consideration to be paid by the authority to the
department for the services provided pursuant to the contracts
authorized by paragraph (2) of subdivision (a) and paragraph (1) of
subdivision (b) is fair and reasonable and in the public interest.
(2) The service contracts and payments made by the authority to
the department pursuant to a service contract authorized by paragraph
(2) of subdivision (a) and paragraph (1) of subdivision (b) and the
loan agreements and loan repayments made by the department to the
authority pursuant to a loan agreement authorized by paragraph (2) of
subdivision (b) shall not constitute a debt or liability, or a
pledge of the faith and credit, of the state or any political
subdivision.
(d) The state hereby covenants with the holders from time to time
of any bonds issued by the authority pursuant to Section 15463 of the
Government Code that it will not alter, amend, or restrict the
provisions of this section, subdivision (f) of Section 5890, or
subdivision (b) of Section 5891 in any manner adverse to the
interests of those bondholders so long as any of those bonds remain
outstanding. The authority may include this covenant in the
resolution, indenture, or other documents governing the bonds.
(e) Agreements under this section are not subject to, and need not
comply with, the requirements of any other law applicable to the
execution of those agreements, including, but not limited to, the
California Environmental Quality Act (Division 13 (commencing with
Section 21000) of the Public Resources Code).
(f) Part 2 (commencing with Section 10290) of Division 2 of the
Public Contract Code shall not apply to any contract entered into
between the authority and the department under this section.
SEC. 6. Section 5849.4 of the Welfare and Institutions Code is
amended to read:
5849.4. (a) The No Place Like Home Fund is hereby created within
the State Treasury and, notwithstanding Section 13340 of the
Government Code, continuously appropriated to the department, the
authority, and the Treasurer for the purposes of this part.
Accounts and subaccounts may be created within the fund as needed.
Up to five 5 percent of the
amount deposited in the fund may be used for administrative expenses
in implementing this part.
(b) There shall be paid into the fund the following:
(1) Any moneys from the receipt of loan proceeds by the department
derived from the issuance of bonds by the authority for the
purpose of implementing the program. under
subdivision (b) of Section 15463 of the Government Code.
(2) Any other federal or state grant, or from any private donation
or grant, for the purposes of this part.
(3) Any interest payment, loan repayments, or other return of
funds.
SEC. 7. Section 5849.5 of the Welfare and Institutions Code is
amended to read:
5849.5. The department may adopt guidelines or regulations,
including emergency regulations to expedite the award of moneys
pursuant to this part, in consultation with the California State
Association of Counties and other stakeholders, as necessary to
exercise the powers and perform the duties conferred or imposed on it
by this part. Any guideline or regulation adopted pursuant to this
section shall not be subject to the requirements of the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code).
The department shall consult with key stakeholders, including, but
not limited to, counties.
SEC. 8. Section 5849.7 of the Welfare and Institutions Code is
amended to read:
5849.7. (a) In order to finance permanent supportive housing for
the target population, the department may enter into one or more
contracts with the authority as authorized pursuant to Section
5849.35 to provide services for the benefit of the people of the
state as described in this section and Sections 5849.8 and 5849.9.
The department shall use its best efforts to provide or cause to be
provided permanent supportive housing for the target population in
consideration for service contract payments to be received from the
authority.
(b) In furtherance of its service obligations under
Under any service contract with the authority,
the department shall administer a competitive program, pursuant to
Section 5849.8, and distribution program, pursuant to Section 5849.9,
for awarding a total amount not to exceed two billion dollars
($2,000,000,000) 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.
For purposes of this section and Section
Sections 5849.8 and 5849.9, measurement of the dollar limit on
amounts to be distributed by the department shall be based on the
principal amount of bonds issued by the authority and loaned to the
department, exclusive of any refunding bonds but including any net
premium derived from the sale of the bonds, for deposit in the fund.
There shall be no dollar limit on the distribution of moneys in the
fund derived from the sources described in paragraphs (2) and (3) of
subdivision (b) of Section 5849.4.
(c) For the competitive program established by Section 5849.8, the
following shall apply:
(1) A county may apply as the sole applicant if it is the
development sponsor or jointly with a separate entity as development
sponsor.
(2) Funded developments shall integrate the target population with
the general public.
(3) Funded developments shall utilize low barrier tenant selection
practices that prioritize vulnerable populations and offer flexible,
voluntary, and individualized supportive services.
(4) The guidelines may provide for alternative housing models,
such as shared housing models of fewer than five units. Integration
requirements may be modified in shared housing.
(5) Funds shall be offered as deferred payment loans to finance
capital costs including acquisition, design, construction,
rehabilitation, or preservation, and to capitalize operating reserves
of, permanent supportive housing for the target population.
(6) The department shall adopt guidelines establishing income and
rent standards.
SEC. 9. Section 5849.8 of the Welfare and Institutions Code is
amended to read:
5849.8. (a) In furtherance of the department's
obligations to the authority under Under any
service contract entered into pursuant to Section 5849.35, the
department may allocate an amount not to exceed one billion eight
hundred million dollars ($1,800,000,000) from the fund for the
purposes of the competitive program described in this subdivision and
the alternative process described in subdivision (b). The department
shall develop a competitive application process for the purpose of
awarding moneys pursuant to this section. In considering
applications, the department shall do all of the following:
(1) Restrict eligibility to applicants that meet the following
minimum criteria:
(A) The county commits to provide mental health supportive
services and to coordinate the provision of or referral to other
services, including, but not limited to, substance use treatment
services, to the tenants of the supportive housing development for at
least 20 years. Services shall be provided onsite at the supportive
housing development or in a location otherwise easily accessible to
tenants. The county may use, but is not restricted to using, any of
the following available funding sources as allowed by state and
federal law:
(i) The Local Mental Health Services Fund established pursuant to
subdivision (f) of Section 5892.
(ii) The Mental Health Account within the Local Health Welfare
Trust Fund established pursuant to Section 17600.10.
(iii) The Behavioral Health Subaccount within the County Local
Revenue Fund 2011 established pursuant to paragraph (4) of
subdivision (f) of Section 30025 of the Government Code.
(iv) Funds received from other private or public entities.
(v) Other county funds.
(B) The county has developed a county plan to combat homelessness,
which includes a description of homelessness countywide, any special
challenges or barriers to serving the target population, county
resources applied to address the issue, available community-based
resources, an outline of partners and collaborations, and proposed
solutions.
(C) Meet other threshold requirements including, but not limited
to, developer capacity to develop, own, and operate a permanent
supportive housing development for the target population, application
proposes a financially feasible development with reasonable
development costs.
(2) The department shall evaluate applications using, at minimum,
the following criteria:
(A) The extent to which units assisted by the program are
restricted to persons who are chronically homeless or at risk of
chronic homelessness within the target population.
(B) The extent to which funds are leveraged for capital costs.
(C) The extent to which projects achieve deeper affordability
through the use of nonstate project-based rental assistance,
operating subsidies, or other funding.
(D) Project readiness.
(E) The extent to which applicants offer a range of on
onsite and off-site supportive services to
tenants, including mental health services, behavioral health
services, primary health, employment, and other tenancy support
services.
(F) Past history of implementing programs that use evidence-based
best practices that have led to the reduction of the number of
chronic homeless or at risk of chronic homelessness individuals
within the target population.
(b) The department may establish an alternative process for
allocating funds directly to counties, as calculated in Section
5849.6, with at least five 5 percent of
the state's homeless population and that demonstrate the capacity to
directly administer loan funds for permanent supportive housing
serving the target population and the ability to prioritize
individuals with mental health supportive needs who are homeless or
at risk of chronic homelessness,
consistent with this part and as determined by the
department. The department shall adopt guidelines establishing the
parameters of an alternative process, if any, and requirements for
local administration of funds, including, but not limited to, project
selection process, eligible use of funds, loan terms, rent and
occupancy restrictions, provision of services, and reporting and
monitoring requirements. Counties participating in the alternative
process shall not be eligible for the competitive process and shall
be limited to funds in proportion to their share of the percentage of
the statewide homeless population, as calculated by the department
in Section 5849.6. Funds not committed to supportive housing
developments within two years following award of funds to counties
shall be returned to the state for the purposes of the competitive
program. The department shall consider the following when selecting
participating counties:
(1) Demonstrated ability to finance permanent supportive housing
with local and federal funds, and monitor requirements for the life
of the loan.
(2) Past history of delivering supportive services to the target
population in housing.
(3) Past history of committing project-based vouchers to
supportive housing.
(4) Ability to prioritize the most vulnerable within the target
population through coordinated entry system.
(c) The department shall set aside 8 percent of funds offered in
Rounds 1 through 4, inclusive, for the competitive program for small
counties as provided in subdivision (d) of Section 5849.6.
(d) The department shall award funds for the competitive program
in at least four rounds as follows:
(1) The department shall issue its first request for proposal for
the competitive program no later than 180 days after the effective
date of a final judgment, with no further opportunity for appeals, in
any court proceeding affirming the validity of the contracts
authorized by the authority and the department pursuant to Section
5849.35 and any bonds authorized to be issued by the authority
pursuant to Section 15463 of the Government Code and any contracts
related to those bonds.
(2) The second round shall be completed no later than one year
after the completion of the first round.
(3) The third round shall be completed no later than one year
after the completion of the second round.
(4) The fourth round shall be completed no later than one year
after the completion of the third round.
(5) Subsequent rounds shall occur annually thereafter in order to
fully exhaust remaining funds and the department may discontinue the
use of the competitive groupings in Section 5849.6, the alternative
process in subdivision (b) for any funds not awarded by the county,
and the rural set-aside funds as set forth in subdivision (c).
(e) (1) Any loans made by the department pursuant to this section
shall be in the form of secured deferred payment loans to pay for the
eligible costs of development. Principal All
unpaid principal and accumulated interest is due and payable
upon no later than completion of the
term of the loan, which shall be established through program
guidelines adopted pursuant to Section 5849.5. The loan shall bear
simple interest at a rate of three 3
percent per annum on the unpaid principal balance. The department
shall require annual loan payments in the minimum amount necessary to
cover the costs of project monitoring. For the first 15 years of the
loan term, the amount of the required loan payments shall not exceed
forty-two hundredths of 1 percent per annum.
(2) The department may establish maximum loan-to-value
requirements for some or all of the types of projects that are
eligible for funding under this part, which shall be established
through program guidelines adopted pursuant to Section 5849.5.
(3) The department shall establish per-unit and per-project loan
limits for all project types.
(f) (1) The department may designate an amount not to exceed
four 4 percent of funds allocated for
the competitive program, not including funding allocated pursuant to
subdivision (b), in order to cure or avert a default on the terms of
any loan or other obligation by the recipient of financial
assistance, or bidding at any foreclosure sale where the default or
foreclosure sale would jeopardize the department's security in the
rental housing development assisted pursuant to this part. The funds
so designated shall be known as the "default reserve."
(2) The department may use default reserve funds made available
pursuant to this section to repair or maintain any rental housing
development assistance pursuant to this part to protect the
department's security interest.
(3) The payment or advance of funds by the department pursuant to
this subdivision shall be exclusively within the department's
discretion, and no person shall be deemed to have any entitlement to
the payment or advance of those funds. The amount of any funds
expended by the department for the purposes of curing or averting a
default shall be added to the loan amount secured by the rental
housing development and shall be payable to the department upon
demand.
(g) (1) Prior to disbursement of any funds for loans made pursuant
to this section, the department shall enter into a
regulatory agreement with the development sponsor that provides for
all of the following:
(A) Sets standards for tenant selection to ensure occupancy of
assisted units by eligible households of very low and low income for
the term of the agreement.
(B) Governs the terms of occupancy agreements.
(C) Contains provisions to maintain affordable rent levels to
serve eligible households.
(D) Provides for periodic inspections and review of yearend fiscal
audits and related reports by the department.
(E) Permits a developer to distribute earnings in an amount
established by the department and based on the number of units in the
rental housing development.
(F) Has a term for not less than the original term of the loan.
(G) Contains any other provisions necessary to carry out the
purposes of this part.
(2) The agreement shall be binding upon the developer and
successors in interest upon sale or transfer of the rental housing
development regardless of any prepayment of the loan.
(3) The agreement shall be recorded in the office of the county
recorder in the county in which the real property subject to the
agreement is located.
(h) (1) The department shall monitor county compliance
by counties of the grant and with applicable
program regulations, loan agreements and regulatory agreements
pursuant to which funds are distributed pursuant to this
section, and to which and any agreements related to
the program that designate the department may be
as a third party
third-party beneficiary, and enforce those regulations and
agreements to the extent necessary and desirable in order to
provide, to the greatest degree possible, the successful provision of
permanent supportive housing.
(2) The department shall annually report to the authority the
status of its efforts pursuant to this section and Section 5849.9, as
set forth in Section 5849.11.
(i) The department may provide technical assistance to counties or
developers of supportive housing to facilitate the construction of
permanent supportive housing for the target
populations. population.
SEC. 10. Section 5849.9 of the Welfare and Institutions Code is
amended to read:
5849.9. (a) In furtherance of the department's
obligations to the authority under Under any
service contract entered into under Section 5849.35, in addition to
the competitive program established by Section 5849.8, the department
may distribute an amount not to exceed two hundred million dollars
($200,000,000) from the fund on an "over-the-counter" basis to
finance the construction, rehabilitation, or preservation, and to
capitalize operating reserves, of permanent supportive housing for
individuals in the target population with a priority for those with
mental health supportive needs who are homeless or at risk of chronic
homelessness. Funds to be awarded pursuant to this section shall be
available to all counties within the state proportionate to the
number of homeless persons residing within each county as calculated
in Section 5849.6 or in the amount of five hundred thousand dollars
($500,000), whichever is greater. A county receiving these funds
shall commit to provide mental health supportive services and
coordinate the provision of, or referral to, other services,
including, but not limited to, substance abuse treatment services, to
the tenants of the supportive housing development for at least 20
years. Services shall be provided onsite at the supportive housing
development or at a location otherwise easily accessible to the
tenants.
(b) Funds not awarded within 18 months following the first
allocation of moneys in accordance with subdivision (d) shall be used
for the purposes of the competitive program.
(c) The moneys described in subdivision (a) shall be administered
either in accordance with the procedures for awarding funds to local
agencies established by the existing Mental Health Services Act
housing program administered by the State Department of
Health Care Services and the California Housing Finance Agency or
alternative procedures developed by the department for distributing
these moneys that enhance the efficiency and goals of the
distribution program.
(d) The department shall make the first allocation of moneys
pursuant to this section as soon as reasonably practical and in any
event no later than 150 days after the effective date of a final
judgment, with no further opportunity for appeals, in any court
proceeding affirming the validity of the contracts authorized by the
authority and the department pursuant to Section 5849.35 and any
bonds authorized to be issued by the authority pursuant to Section
15463 of the Government Code and any contracts related to those
bonds.
SEC. 11. Section 5849.11 of the Welfare and Institutions Code is
amended to read:
5849.11. (a) The counties shall annually report to the department
on activities funded under this part, including information on the
funded supportive housing development. Reported information shall
include location of projects, number of units assisted, occupancy
restrictions, number of individuals and households served, related
income levels, and homeless, veteran, and mental health status.
(b) The department shall submit a report on the program to the
Legislature by December 31 of each year, commencing with the year
after the first full year in which the program is in effect. The
report shall contain the following:
(1) The processes established for distributing funds.
(2) The distribution of funds among counties.
(3) Any recommendations as to modifications to the program for the
purpose of improving efficiency or furthering the goals of the
program.
(c) The report required to be submitted by subdivision (b) shall
be submitted in compliance with Section 9795 of the Government Code.
(d) The department shall submit a report to the authority by
December 31 of each year, commencing with the year after the first
full year in which the program is in effect, that contains the
information described in subdivision (a) and paragraphs (1) and (2)
of subdivision (b) for all counties participating in the program and
the services that have been provided pursuant to any service
contracts entered into pursuant to Section 5849.35.
SEC. 12. Section 5849.13 of the Welfare and Institutions Code is
repealed.
SEC. 13. Section 5849.13 is added to the Welfare and Institutions
Code, to read:
5849.13. An action to determine the validity of any contract or
loan authorized pursuant to Section 5849.35 or of any bond authorized
to be issued pursuant to Section 15463 of the Government Code, and
any contracts related to those bonds, may be brought in accordance
with Section 17700 of the Government Code.
SEC. 14. Section 5849.14 of the Welfare and Institutions Code is
amended to read:
5849.14. The Department of Finance may authorize one or more
loans from the General Fund to the No Place Like Home Fund for
cashflow purposes in an aggregate amount not to exceed two million
dollars ($2,000,000) subject to the following conditions:
(a) The loans are for either of the following purposes:
(1) To allow the department to begin program implementation
activities, including, but not limited to, drafting program
guidelines and regulations.
(2) To allow the department, the authority, and the Treasurer to
implement Section 5849.35 of this code and Section 15463 of the
Government Code, including, but not limited to, payment for financial
advisory and legal services to prepare for, and in connection with,
any validation action pursuant to Section 5849.13 or any other court
action regarding this part or Section 15463 of the Government Code.
(b) The loans are short term, and shall be repaid within 30 days
after the deposit of bond proceeds into the fund pursuant to
paragraph (1) of subdivision (b) of Section 5849.4.
(c) Interest charges may be waived pursuant to subdivision (e) of
Section 16314 of the Government Code.
SEC. 15. Section 5890 of the Welfare and Institutions Code is
amended to read:
5890. (a) The Mental Health Services Fund is hereby created in
the State Treasury. The fund shall be administered by the state.
Notwithstanding Section 13340 of the Government Code, all moneys in
the fund are, except as provided in subdivision (d) of Section 5892,
continuously appropriated, without regard to fiscal years, for the
purpose of funding the following programs and other related
activities as designated by other provisions of this division:
(1) Part 3 (commencing with Section 5800), the Adult and Older
Adult System of Care Act.
(2) Part 3.2 (commencing with Section 5830), Innovative Programs.
(3) Part 3.6 (commencing with Section 5840), Prevention and Early
Intervention Programs.
(4) Part 3.9 (commencing with Section 5849.1), No Place Like Home
Program.
(5) Part 4 (commencing with Section 5850), the Children's Mental
Health Services Act.
(b) Nothing in the establishment of this fund, nor any other
provisions of the act establishing it or the programs funded shall be
construed to modify the obligation of health care service plans and
disability insurance policies to provide coverage for mental health
services, including those services required under Section 1374.72 of
the Health and Safety Code and Section 10144.5 of the Insurance Code,
related to mental health parity. Nothing in this act shall be
construed to modify the oversight duties of the Department of Managed
Health Care or the duties of the Department of Insurance with
respect to enforcing these obligations of plans and insurance
policies.
(c) Nothing in this act shall be construed to modify or reduce the
existing authority or responsibility of the State Department of
Health Care Services.
(d) The State Department of Health Care Services shall seek
approval of all applicable federal Medicaid approvals to maximize the
availability of federal funds and eligibility of participating
children, adults, and seniors for medically necessary care.
(e) Share of costs for services pursuant to Part 3 (commencing
with Section 5800), 5800) and Part 4
(commencing with Section 5850) of this division, shall be determined
in accordance with the Uniform Method for of
Determining Ability to Pay applicable to other publicly funded
mental health services, unless this Uniform Method is replaced by
another method of determining copayments, in which case the new
method applicable to other mental health services shall be applicable
to services pursuant to Part 3 (commencing with Section
5800), 5800) and Part 4 (commencing with Section
5850) of this division.
(f) The Supportive Housing Program Subaccount is hereby created in
the Mental Health Services Fund. Notwithstanding Section 13340 of
the Government Code, all moneys in the subaccount are reserved
and continuously appropriated, without regard to fiscal years,
to the California Health Facilities Financing Authority to provide
funds to meet its financial obligations pursuant to any service
contracts entered into pursuant to Section 5849.35. Notwithstanding
any other law, including any other provision of this section,
starting on the first no later than the last
day of each month, the Controller shall, prior to any
transfer, deposit, transfer or expenditure from
the fund for any other purpose, purpose for
the following month, transfer from the Mental Health Services
Fund to the Supportive Housing Program Subaccount an amount which has
been certified by the California Health Facilities Financing
Authority pursuant to paragraph (3) of subdivision (a) of Section
5849.35, but not to exceed an aggregate amount of one hundred forty
million dollars ($140,000,000) per year. If in any month the amounts
in the Mental Health Services Fund are insufficient to fully
transfer to the subaccount or the amounts in the subaccount are
insufficient to fully pay the amount certified by the California
Health Facilities Financing Authority, the shortfall shall be carried
over to the next month. Moneys in the Supportive Housing
Program Subaccount shall not be loaned to the
General Fund pursuant to Sections Section
16310 or 16381 of the Government Code.
SEC. 16. Section 5891 of the Welfare and Institutions Code is
amended to read:
5891. (a) The funding established pursuant to this act shall be
utilized to expand mental health services. Except as provided in
subdivision (j) of Section 5892 due to the state's fiscal crisis,
these funds shall not be used to supplant existing state or county
funds utilized to provide mental health services. The state shall
continue to provide financial support for mental health programs with
not less than the same entitlements, amounts of allocations from the
General Fund or from the Local Revenue Fund 2011 in the State
Treasury, and formula distributions of dedicated funds as provided in
the last fiscal year which ended prior to the effective date of this
act. The state shall not make any change to the structure of
financing mental health services, which increases a county's share of
costs or financial risk for mental health services unless the state
includes adequate funding to fully compensate for such increased
costs or financial risk. These funds shall only be used to pay for
the programs authorized in Sections 5890 and 5892. These funds may
not be used to pay for any other program. These funds may not be
loaned to the state General Fund or any other fund
of the state, or a county general fund or any other county fund for
any purpose other than those authorized by Section
Sections 5890 and 5892.
(b) (1) Notwithstanding subdivision (a), and except as provided in
paragraph (2), the Controller may use the funds created pursuant to
this part for loans to the General Fund as provided in Sections 16310
and 16381 of the Government Code. Any such loan shall be repaid from
the General Fund with interest computed at 110 percent of the Pooled
Money Investment Account rate, with interest commencing to accrue on
the date the loan is made from the fund. This subdivision does not
authorize any transfer that would interfere with the carrying out of
the object for which these funds were created.
(2) This subdivision does not apply to the Supportive Housing
Program Subaccount created by subdivision (f) of Section 5890 or any
moneys paid by the California Health Facilities Financing Authority
to the Department of Housing and Community Development as a service
fee pursuant to a service contract authorized by Section 5849.35.
(c) Commencing July 1, 2012, on or before the 15th day of each
month, pursuant to a methodology provided by the State Department of
Health Care Services, the Controller shall distribute to each Local
Mental Health Service Fund established by counties pursuant to
subdivision (f) of Section 5892, all unexpended and unreserved funds
on deposit as of the last day of the prior month in the Mental Health
Services Fund, established pursuant to Section 5890, for the
provision of programs and other related activities set forth in Part
3 (commencing with Section 5800), Part 3.2 (commencing with Section
5830), Part 3.6 (commencing with Section 5840), Part 3.9
(commencing with Section 5849.1), and Part 4 (commencing with
Section 5850).
(d) Counties shall base their expenditures on the county mental
health program's three-year program and expenditure plan or annual
update, as required by Section 5847. Nothing in this subdivision
shall affect subdivision (a) or (b).
SEC. 17. The Legislature finds and declares that this act furthers
the intent of the Mental Health Services Act, enacted by Proposition
63 at the November 2, 2004, statewide general election.
SEC. 18. This act is a bill providing for appropriations related
to the Budget Bill within the meaning of subdivision (e) of Section
12 of Article IV of the California Constitution, has been identified
as related to the budget in the Budget Bill, and shall take effect
immediately.
