Date of Hearing: April 23, 2019

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 1634

Author:(Gloria) – As Amended Ver:March 28, 2019

SUBJECT: Mental health: community-based services.

SUMMARY: Eliminates the requirement under the Investment in Mental Health Wellness Act (IMHWA) of 2013, that before the California Health Facilities Financing Authority (CHFFA) or the Mental Health Services Oversight and Accountability Commission (MHSOAC), may consider granting available funds to private nonprofit corporations and public agencies in an area or region of the state, a county, or counties acting jointly, must affirmatively support this designation and collaboration in lieu of a county government directly receiving grant funds; thus making both private nonprofit corporations and public agencies eligible for these grants.

EXISTING LAW:

1. Establishes CHFFA to provide financial assistance to public and non-profit health care providers through loans, grants and tax-exempt bonds.
2. Establishes the Mental Health Services Act (MHSA), enacted by voters in 2004 as Proposition 63, to provide funds to counties to expand services, develop innovative programs, and integrated service plans for mentally ill children, adults, and seniors through a 1% income tax on personal income above $1 million. Establishes the MHSOAC to oversee the implementation of MHSA, made up of 16 members appointed by the Governor, and the Legislature, as specified.
3. Requires CHFFA and MHSOAC to administer a competitive selection process as provided for capital capacity and program expansion to increase capacity for mobile crisis support, crisis intervention, crisis stabilization services, crisis residential treatment, and specific personnel resources.
4. Requires that prior to CHFFA or MHSOAC considering granting available funds to private nonprofit corporations and public agencies in an area or region of the state, a county, or counties acting jointly, must affirmatively support this designation and collaboration in lieu of a county government directly receiving grant funds.

FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, the Legislature has, coupled with an effort to address an ongoing homelessness crisis, undertaken a number of actions to establish funding sources for the delivery of mental health services. Through the IMHWA, non-county public agencies and nonprofit corporations are already capable of applying for grants that would fund crisis stabilization beds and triage personnel. However, these entities must first obtain county approval before applying. As counties grapple with the competitive selection processes of a host of programs such as No Place Like Home and pretrial diversion, this bill will eliminate administrative barrier to submitting a competitive application by removing the requirement to obtain county approval. The author concludes by stating that this bill will allow those non-county public agencies or nonprofits to step up independently while signaling to the Legislature that investments in mental health resources will no longer be left on the table.
2. BACKGROUND.
   1. IMHWA. SB 82 (Committee on Budget and Finance), Chapter 34, Statutes of 2013, the IMHWA, established a competitive grant program to disburse funds to California counties or to their nonprofit or public agency designees for the purpose of developing mental health crisis support programs. Specifically, funds were targeted to increase capacity for client assistance and services in crisis intervention, crisis stabilization, crisis residential treatment, rehabilitative mental health services, and mobile crisis support teams. The grants from CHFFA support capital improvement, expansion, and limited start-up costs. The grants from CHFFA were to be disbursed to California counties or to their nonprofit or public agency designees to support capital improvement, expansion and limited start-up costs. At a recent Budget Subcommittee No. 1 hearing, CHFFA reported that the full $142.5 million in onetime grants for capital projects has been allocated, resulting in an increase of 400 crisis mental health beds, with an expectation to eventually lead to a total of 760 new beds. CHFFA expects all 760 beds to be operational by December 2021.

In 2016, SB 833 (Budget and Fiscal Review), Chapter 30, Statutes of 2016, among other provisions, expanded the IMHWA to specifically address a continuum of crisis services for children and youth, 21 years of age and under and allocated approximately $27 million to specifically fund four mental health programs: crisis residential treatment, crisis stabilization, mobile crisis support teams, and family respite care. The grants from CHFFA are to be disbursed to California counties or to their nonprofit or public agency designees to support capital improvement, expansion and limited start-up costs. Additionally, the program had two different budgets with varying deadlines and provisions. During a recent Budget Subcommittee No. 1 hearing, CHFFA reported that these varying deadlines and provisions presented administrative challenges to develop and administer a robust program that aligned with county partners’ needs. The grant application process for these funds closed on February 28, 2019. CHFFA received only six applications for a total of $1.3 million of the $27.2 million available in capital funds and for $2.9 million out of a total of $4 million, in personnel funding. CHFFA states it has begun a process of surveying counties to learn more about the lack of interest and responses, but it believes that for most counties it reflects challenges with the project and funding timeline of three years.

These grant programs, both the original IMHWA and the expansion in 2016, have safeguards that assure funds granted are used for the purpose intended. For example, IMHWA states that the authority may consider the grantee’s ability to serve the target population, which includes individuals eligible for Medi-Cal and individuals eligible for county health and mental health services. Additionally, a grantee that receives a grant from the authority must commit to using capital capacity and program expansion project, such as the mobile crisis team, crisis stabilization unit, family respite care or crisis residential treatment program, for the duration of the expected life of the project.

• 1. CHFFA. CHFFA was established in 1979 to provide financial assistance to public and non-profit health care providers through loans funded by the issuance of tax-exempt bonds. In order to CHFFA financing, an institution must be a public hospital, a private non-profit corporation, or an association authorized to provide or operate a health facility and undertake the financing or refinancing of a project. Generally, non-profit, licensed health facilities in California including adult day health centers, community clinics, developmentally disabled centers, and drug and alcohol rehabilitation centers are eligible for financing. CHFFA financings may be used for the following project related costs:
     
     1. Construction;
     2. Remodeling and renovation;
     3. Land Acquisition (as part of the proposed project);
     4. Acquisition of existing health facilities;
     5. Purchase or lease of equipment;
     6. Refinancing or refunding of prior debt;
     7. Working capital for start-up facilities; and,
     8. Costs of bond issuance, feasibility studies and reimbursement of prior expenses.
  2. Proposition 63: MHSA. Proposition 63 was passed by voters in November, 2004. The MHSA imposes a one percent income tax on personal income in excess of $1 million and creates the 16 member MHSOAC charged with overseeing the implementation of MHSA. The MHSA addresses a broad continuum of prevention, early intervention and service needs as well as providing funding for infrastructure, technology and training needs for the community mental health system.

The MHSA requires each county mental health department to prepare and submit a three-year plan to DHCS that must be updated each year and approved by DHCS after review and comment by the MHSOAC. In their three-year plans, counties are required to include a list of all programs for which MHSA funding is being requested and that identifies how the funds will be spent and which populations will be served. Counties must submit their plans for approval to the MHSOAC before the counties may spend certain categories of funding, including funding for capital facilities and technological needs in order to create additional county infrastructure such as additional clinics and facilities and/or development of a technological infrastructure for the mental health system, such as electronic health records for mental health services.

1. SUPPORT. Mental Health America of Northern California and ACCESS California states that counties have continued to leave unspent MHSA money which could be used to reduce un-under- and inappropriately-served communities’ disparities. CHFFA has the opportunity to directly contribute to reducing disparities by contracting with private non-profit corporations and public agencies within those communities who know best how to address their stakeholder’s needs.
2. RELATED LEGISLATION. SB 582 (Beall) requires MHSOAC to allocate at least one-half of triage grant program funds to local educational agency and mental health partnerships, as specified, to support prevention, early intervention, and direct services to children and youth, as specified. AB 582 is pending before the Senate Appropriations Committee.

1. PREVIOUS LEGISLATION.
   1. SB 833 extended the application of provisions in the MHWA for purposes of providing mental health services to children and youth 21 years of age and under and provides that funds be made available to selected counties or counties acting jointly, and used to increase capacity for client assistance and crisis services, as specified.
   2. SB 82 established the IMHWA providing that funds appropriated by the Legislature to the CHFFA for the purposes of the act be made available to selected counties or counties acting jointly, and used to increase capacity for client assistance and services in crisis intervention, crisis stabilization, crisis residential treatment, rehabilitative mental health services, and mobile crisis support teams.
2. POLICY COMMENT. Existing law provides some safeguards to ensure that the funds granted under IMHWA and its expansion in 2016 are spent as intended. Should this bill move out of Committee, the author may wish to consider an amendment that would require the existence of service level agreements between the county and the private nonprofit or public agency to ensure the grantee will serve the target populations for the duration of the expected life of the project for which they seek funding.

REGISTERED SUPPORT / OPPOSITION:

Support

Mental Health America of Northern California

Opposition

None on file.

Analysis Prepared by: Judith Babcock / HEALTH / (916) 319-2097