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SB-192 Mental Health Services Act Reversion Fund.(2017-2018)

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Date Published: 04/18/2017 09:00 PM
SB192:v97#DOCUMENT

Amended  IN  Senate  April 18, 2017
Amended  IN  Senate  March 28, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 192


Introduced by Senator Beall

January 30, 2017


An act to amend Sections 5891, 5892, and 5892.5 of, and to add Section 5892.3 to, the Welfare and Institutions Code, relating to mental health.


LEGISLATIVE COUNSEL'S DIGEST


SB 192, as amended, Beall. Mental Health Services Act Reversion Fund.
Existing law, the Mental Health Services Act (the MHSA), an initiative measure enacted by the voters as Proposition 63 at the November 2, 2004, statewide general election, establishes the continuously appropriated Mental Health Services Fund to fund various county mental health programs by imposing a tax of 1% on incomes above $1,000,000. Existing law requires the State Department of Health Care Services, among other things, to implement specified mental health services through contracts with county mental health programs or counties acting jointly. The MHSA establishes the Mental Health Services Oversight and Accountability Commission to oversee various parts of the act, as specified.
Under the MHSA, funds are distributed to counties for local assistance for designated mental health programs according to a specified county plan. The MHSA, except as specified, requires any funds allocated to a county that have not been spent for their authorized purpose within 3 years to revert to the state to be deposited into the fund and available for other counties in future years. The MHSA permits amendment by the Legislature by a 2/3 vote of each house if the amendment is consistent with, and furthers the intent of, the MHSA, and also permits the Legislature to add provisions to clarify procedures and terms of the MHSA by a majority vote.
This bill would amend the MHSA by instead requiring that any funds allocated since the 2008–09 fiscal year, except as specified, to a large, medium, small, or very small county, as defined, that have not been spent for their authorized purpose within 3 years of being allocated, and any interest earned on unspent funds, revert to the state for deposit into the newly established Mental Health Services Act Reversion Fund. The bill would authorize a very small county to apply for a waiver, subject to approval by the commission, requesting a delay of the reversion of funds, but not for more than 5 fiscal years from the time of allocation of funds. The bill would require the state to distribute the reverted funds to counties, or counties acting jointly, to fund prevention and early intervention or innovative programs for youth innovation programs that are consistent with mental health funding priorities for youth established by the Legislature and the Mental Health Services Act, MHSA, as specified. The bill would make the amount of funds available to counties in any fiscal year subject to an annual appropriation by the Legislature in the annual Budget Act.
This bill would require funding to be directed only to counties, or counties acting jointly, that provide evidence-based intervention services and supports for prevention, early detection, and treatment of psychosis, mood disorders, or other mental health issues for youth, as specified, and would require the counties This bill would require the counties, or counties jointly, seeking funding to demonstrate to the commission that funding will be used to create, or expand the capacity for, those services and supports. services and supports to address unmet community needs. The bill would impose certain restrictions on eligibility for subsequent funding for counties that previously have been allocated funds. The bill would authorize the Legislature to give specific consideration to very small counties and small counties when making an appropriation from the Mental Health Services Act Reversion Fund.
This bill would require the commission to submit to the Legislature an annual report of its recommendations for recipients of funding and the amount of funding for each recipient in a manner that ensures that allocation of funds results in specified outcomes and to take into account certain criteria when recommending recipients and amounts of funding. The bill would also require the commission to require participating counties to submit outcome data within one year of receiving funding, and would require the commission to aggregate and report the outcome data to the Legislature, as specified. The bill would require the department to annually report to the Legislature and the commission the amount of funds that are subject to reversion and the interest earned by counties, and to update necessary regulations, processes, and guidance to allow counties to revise or correct their annual revenue and expenditure reports.
This bill would also make conforming changes to related provisions.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 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 (i) 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 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 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. 2.

 Section 5892 of the Welfare and Institutions Code is amended to read:

5892.
 (a) In order to promote efficient implementation of this act, the county shall use funds distributed from the Mental Health Services Fund as follows:
(1) In 2005–06, 2006–07, and in 2007–08, 10 percent shall be placed in a trust fund to be expended for education and training programs pursuant to Part 3.1.
(2) In 2005–06, 2006–07, and in 2007–08, 10 percent for capital facilities and technological needs distributed to counties in accordance with a formula developed in consultation with the County Behavioral Health Directors Association of California to implement plans developed pursuant to Section 5847.
(3) Twenty percent of funds distributed to the counties pursuant to subdivision (c) of Section 5891 shall be used for prevention and early intervention programs in accordance with Part 3.6 (commencing with Section 5840).
(4) The expenditure for prevention and early intervention may be increased in any county in which the department determines that the increase will decrease the need and cost for additional services to severely mentally ill persons in that county by an amount at least commensurate with the proposed increase.
(5) The balance of funds shall be distributed to county mental health programs for services to persons with severe mental illnesses pursuant to Part 4 (commencing with Section 5850) for the children’s system of care and Part 3 (commencing with Section 5800) for the adult and older adult system of care.
(6) Five percent of the total funding for each county mental health program for Part 3 (commencing with Section 5800), Part 3.6 (commencing with Section 5840), and Part 4 (commencing with Section 5850), shall be utilized for innovative programs in accordance with Sections 5830, 5847, and 5848.
(b) In any fiscal year after the 2007–08 fiscal year, programs for services pursuant to Part 3 (commencing with Section 5800) and Part 4 (commencing with Section 5850) may include funds for technological needs and capital facilities, human resource needs, and a prudent reserve to ensure services do not have to be significantly reduced in years in which revenues are below the average of previous years. The total allocation for purposes authorized by this subdivision shall not exceed 20 percent of the average amount of funds allocated to that county for the previous five fiscal years pursuant to this section.
(c) The allocations pursuant to subdivisions (a) and (b) shall include funding for annual planning costs pursuant to Section 5848. The total of these costs shall not exceed 5 percent of the total of annual revenues received for the fund. The planning costs shall include funds for county mental health programs to pay for the costs of consumers, family members, and other stakeholders to participate in the planning process and for the planning and implementation required for private provider contracts to be significantly expanded to provide additional services pursuant to Part 3 (commencing with Section 5800) and Part 4 (commencing with Section 5850).
(d) Prior to making the allocations pursuant to subdivisions (a), (b), and (c), funds shall be reserved for the costs for the State Department of Health Care Services, the California Mental Health Planning Council, the Office of Statewide Health Planning and Development, the Mental Health Services Oversight and Accountability Commission, the State Department of Public Health, and any other state agency to implement all duties pursuant to the programs set forth in this section. These costs shall not exceed 5 percent of the total of annual revenues received for the fund. The administrative costs shall include funds to assist consumers and family members to ensure the appropriate state and county agencies give full consideration to concerns about quality, structure of service delivery, or access to services. The amounts allocated for administration shall include amounts sufficient to ensure adequate research and evaluation regarding the effectiveness of services being provided and achievement of the outcome measures set forth in Part 3 (commencing with Section 5800), Part 3.6 (commencing with Section 5840), and Part 4 (commencing with Section 5850). The amount of funds available for the purposes of this subdivision in any fiscal year is subject to appropriation in the annual Budget Act.
(e) In the 2004–05 fiscal year, funds shall be allocated as follows:
(1) Forty-five percent for education and training pursuant to Part 3.1 (commencing with Section 5820).
(2) Forty-five percent for capital facilities and technology needs in the manner specified by paragraph (2) of subdivision (a).
(3) Five percent for local planning in the manner specified in subdivision (c).
(4) Five percent for state implementation in the manner specified in subdivision (d).
(f) Each county shall place all funds received from the State Mental Health Services Fund in a local Mental Health Services Fund. The Local Mental Health Services Fund balance shall be invested consistent with other county funds and the interest earned on the investments shall be transferred into the fund. The earnings on investment of these funds shall be available for distribution from the fund in future fiscal years.
(g) All expenditures for county mental health programs shall be consistent with a currently approved plan or update pursuant to Section 5847.
(h) If there are revenues available in the fund after the Mental Health Services Oversight and Accountability Commission has determined there are prudent reserves and no unmet needs for any of the programs funded pursuant to this section, including all purposes of the Prevention and Early Intervention Program, the commission shall develop a plan for expenditures of these revenues to further the purposes of this act and the Legislature may appropriate these funds for any purpose consistent with the commission’s adopted plan that furthers the purposes of this act.
(i) For the 2011–12 fiscal year, General Fund revenues will be insufficient to fully fund many existing mental health programs, including Early and Periodic Screening, Diagnosis, and Treatment (EPSDT), Medi-Cal Specialty Mental Health Managed Care, and mental health services provided for special education pupils. In order to adequately fund those programs for the 2011–12 fiscal year and avoid deeper reductions in programs that serve individuals with severe mental illness and the most vulnerable, medically needy citizens of the state, prior to distribution of funds under paragraphs (1) to (6), inclusive, of subdivision (a), effective July 1, 2011, moneys shall be allocated from the Mental Health Services Fund to the counties as follows:
(1) Commencing July 1, 2011, one hundred eighty-three million six hundred thousand dollars ($183,600,000) of the funds available as of July 1, 2011, in the Mental Health Services Fund, shall be allocated in a manner consistent with subdivision (c) of Section 5778 and based on a formula determined by the state in consultation with the County Behavioral Health Directors Association of California to meet the fiscal year 2011–12 General Fund obligation for Medi-Cal Specialty Mental Health Managed Care.
(2) Upon completion of the allocation in paragraph (1), the Controller shall distribute to counties ninety-eight million five hundred eighty-six thousand dollars ($98,586,000) from the Mental Health Services Fund for mental health services for special education pupils based on a formula determined by the state in consultation with the County Behavioral Health Directors Association of California.
(3) Upon completion of the allocation in paragraph (2), the Controller shall distribute to counties 50 percent of their 2011–12 Mental Health Services Act component allocations consistent with Sections 5847 and 5891, not to exceed four hundred eighty-eight million dollars ($488,000,000). This allocation shall commence beginning August 1, 2011.
(4) Upon completion of the allocation in paragraph (3), and as revenues are deposited into the Mental Health Services Fund, the Controller shall distribute five hundred seventy-nine million dollars ($579,000,000) from the Mental Health Services Fund to counties to meet the General Fund obligation for EPSDT for the 2011–12 fiscal year. These revenues shall be distributed to counties on a quarterly basis and based on a formula determined by the state in consultation with the County Behavioral Health Directors Association of California. These funds shall not be subject to reconciliation or cost settlement.
(5) The Controller shall distribute to counties the remaining 2011–12 Mental Health Services Act component allocations consistent with Sections 5847 and 5891, beginning no later than April 30, 2012. These remaining allocations shall be made on a monthly basis.
(6) The total one-time allocation from the Mental Health Services Fund for EPSDT, Medi-Cal Specialty Mental Health Managed Care, and mental health services provided to special education pupils as referenced shall not exceed eight hundred sixty-two million dollars ($862,000,000). Any revenues deposited in the Mental Health Services Fund in the 2011–12 fiscal year that exceed this obligation shall be distributed to counties for remaining fiscal year 2011–12 Mental Health Services Act component allocations, consistent with Sections 5847 and 5891.
(j) Subdivision (i) shall not be subject to repayment.
(k) Subdivision (i) shall become inoperative on July 1, 2012.

SEC. 3.

 Section 5892.3 is added to the Welfare and Institutions Code, to read:

5892.3.
 (a) There is hereby established in the State Treasury, Treasury the Mental Health Services Act Reversion Fund.
(b) (1) Other than funds placed in a reserve in accordance with an approved plan, any funds allocated since the 2008–09 fiscal year to a large, medium, small, or very small county that have not been spent for their authorized purpose within three years of being allocated, and any interest earned on unspent funds, shall revert to the state to be deposited into the Mental Health Services Act Reversion Fund. However, funds for capital facilities, technological needs, or education and training may be retained for up to 10 years before reverting to the Mental Health Services Act Reversion Fund.
(2) (A) For purposes of this subdivision, the following definitions apply:
(i) “Large county” is a county with a population greater than 750,000.
(ii) “Medium county” is a county with a population between 200,000 and 750,000, inclusive.
(iii) “Small county” is a county with a population of 100,000 or greater and less than 200,000.
(iv) “Very small county” is a county with a population less than 100,000.
(B) The populations provided in subparagraph (A) shall be based on annual demographic information released annually by the Department of Finance.
(3) Notwithstanding paragraph (1), a very small county may apply for a waiver, subject to approval by the Mental Health Oversight and Accountability Commission, requesting a delay of the reversion of funds beyond three fiscal years from the time of allocation of funds, but not for more than five fiscal years from the time of allocation of funds.
(c) (1) The state shall distribute funds reverted to the Mental Health Services Act Reversion Fund to counties, or counties acting jointly, to fund prevention and early intervention or innovative programs for youth innovation programs that are consistent with mental health funding priorities for youth established by the Legislature and the Mental Health Services Act, including, but not limited to, all of the following:
(A) Providing evidence-based prevention and early intervention services, as described in paragraph (3), services to children under five years of age.
(B) Providing evidence-based intervention services and supports for prevention, early detection, and treatment of psychosis, mood disorders, or other mental health issues, as described in paragraph (3), issues in educational settings, up to and including higher education.
(C) Providing evidence-based early intervention services and supports for prevention, early detection, and treatment of psychosis, mood disorders, or other mental health issues, as described in paragraph (3), issues for youth and transition-age youth involved in the juvenile justice system.
(2) The amount of funds available to counties, or counties acting jointly, for the purposes of this subdivision in any fiscal year is subject to an annual appropriation by the Legislature in the annual Budget Act.

(3)Funding shall be directed only to counties, or counties acting jointly, that provide evidence-based intervention services and supports for prevention, early detection, and treatment of psychosis, mood disorders, or other mental health issues for youth, which utilize evidence-based approaches and services to identify and support clinical and functional recovery of young individuals by reducing the severity of first or early episode psychotic symptoms, keeping youth in school, and putting them on a path to better health and wellness. These services and supports may include, but are not limited to, all of the following:

(A)Focused outreach to at-risk and in-need populations, as applicable.

(B)Focused programs that build social, emotional, cognitive, or substance refusal skills.

(C)Recovery-oriented psychotherapy.

(D)Family psychoeducation and support.

(E)Supported education and employment.

(F)Pharmacotherapy and primary care coordination.

(G)Use of innovative technology for mental health information feedback access that can provide a valued and unique opportunity to assist individuals with mental health needs and to optimize care.

(H)Case management.

(4)

(3) Counties, or counties acting jointly, seeking funding from the Mental Health Services Act Reversion Fund for services and supports described in paragraph (3) shall demonstrate to the Mental Health Services Oversight and Accountability Commission that funding will be used to create, or expand existing capacity for, those services and supports. services and supports that address unmet community needs. The commission shall submit to the Legislature an annual report of its recommendations for recipients of funding and the amount of funding for each recipient in a manner that ensures that allocation of funds results in cost-effective and evidence-based services and supports that comprehensively address identified needs of the target population in counties and regions selected for funding. The commission shall also take into account at least the following criteria when recommending recipients of funding and the amount of funding for each recipient:
(A) A description of need, including, at a minimum, a comprehensive description of the services and supports described in paragraph (3) to be established or expanded, including community need, the target population to be served, linkage with other public systems of health and mental health care, linkage with schools and community social services, and related assistance as applicable, and a description of the request for funding.
(B) A description of all programmatic components, including outreach and clinical aspects, of local services and supports described in paragraph (3). supports.
(C) A description of any contractual relationships with contracting providers, as applicable, including a memorandum of understanding among any project partners.
(D) A description of local funds, including amounts, to contribute toward the services and supports, as required by the commission, implementing guidelines, and regulations.
(E) A project timeline.
(F) The ability of the county, or counties acting jointly, to effectively and efficiently implement or expand services and supports described in paragraph (3). supports.
(G) A description of core data collection and a framework for evaluating outcomes, including improved access to services and supports and the cost benefit of the project.
(H) A description of the sustainability of program services and supports in future years.

(5)

(4) The commission shall determine any minimum or maximum funding recommended to the Legislature for appropriation, shall take into consideration the level of need, the population to be served, and related criteria as described in paragraph (4) (3) and in any guidance or regulations, and shall reflect reasonable costs.

(6)

(5) Funds appropriated by the Legislature for purposes of this section may be used to supplement, but shall not supplant, existing financial and resource commitments of the county or counties acting jointly.

(7)

(6) The Legislature, when making an appropriation from the Mental Health Services Act Reversion Fund, may give specific consideration to very small counties and small counties, as defined in subdivision (b).

(8)

(7) Counties that previously have been allocated funds under this subdivision shall be eligible for subsequent funding only if the county or counties acting jointly demonstrate improved outcomes or increased levels of service to the youth populations described in this section with the use of the previously allocated funds.

(9)

(8) In order to evaluate the success of the use of these funds, the Mental Health Services Oversight and Accountability Commission shall require participating counties to submit outcome data within one year of receiving funding, and the commission shall aggregate and report to the Legislature the outcome data for each participating county or counties acting jointly.

(10)

(9) The State Department of Health Care Services shall annually report to the Legislature and the commission the amount of funds that are subject to reversion and the interest earned by counties.

(11)

(10) The department shall update necessary regulations, processes, and guidance to allow counties, as appropriate, to revise or correct their annual revenue and expenditure reports. The department shall report any revisions to a county’s annual revenue and expenditure report within the annual report described in paragraph (10). (9).

(12)

(11) A report submitted by the commission or the department pursuant to paragraph (4), (5), (9), (10), or (11) (3), (4), (8), (9), or (10) shall be in compliance with Section 9795 of the Government Code.

SEC. 4.

 Section 5892.5 of the Welfare and Institutions Code is amended to read:

5892.5.
 (a) (1) The California Housing Finance Agency, with the concurrence of the State Department of Health Care Services, shall release unencumbered Mental Health Services Fund moneys dedicated to the Mental Health Services Act housing program upon the written request of the respective county. The county shall use these Mental Health Services Fund moneys released by the agency to provide housing assistance to the target populations who are identified in Section 5600.3.
(2) For purposes of this section, “housing assistance” means each of the following:
(A) Rental assistance or capitalized operating subsidies.
(B) Security deposits, utility deposits, or other move-in cost assistance.
(C) Utility payments.
(D) Moving cost assistance.
(E) Capital funding to build or rehabilitate housing for homeless, mentally ill persons or mentally ill persons who are at risk of being homeless.
(b) For purposes of administering those funds released to a respective county pursuant to subdivision (a), the county shall comply with all of the requirements described in the Mental Health Services Act, including, but not limited to, Sections 5664, 5847, and 5899, and subdivision (b) of Section 5892.3, and 5899. 5892.3.