PROPOSITION 1E MENTAL HEALTH SERVICES FUNDING. TEMPORARY REALLOCATION. HELPS BALANCE STATE BUDGET.

MENTAL HEALTH SERVICES FUNDING. TEMPORARY REALLOCATION. HELPS BALANCE STATE BUDGET.

• Amends Mental Health Services Act (Proposition 63 of 2004) to transfer funds, for a two-year period, from mental health programs under that act to pay for mental health services for children and young adults provided through the Early and Periodic Screening, Diagnosis, and Treatment Program.
• Provides more than $225 million in flexible funding for mental health programs.
• Helps balance state budget during this difficult economic time.

Summary of Legislative Analyst’s Estimate of Net State and Local Government Fiscal Impact:

• State General Fund savings of about $230 million annually for two years (2009–10 and 2010–11) from redirecting a portion of Proposition 63 funds to an existing state program in place of state General Fund support.
• Corresponding reduction in funding available for Proposition 63 community mental health programs.

TEXT OF PROPOSED LAW BELOW


PROPOS
ITION 1E
This amendment proposed by Senate Bill 10 of the 2009–2010 Third Extraordinary Session (Chapter 15, 2009–2010 Third Extraordinary Session) is submitted to the people in accordance with Section 10 of Article II of the California Constitution.
This proposed law amends sections of the Welfare and Institutions Code; therefore, provisions proposed to be deleted are printed in strikeout type and new provisions proposed to be added are printed in italic type to indicate that they are new.
PR
oposed Law
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. These Except as authorized in paragraph (7) of subdivision (a) of Section 5892, these funds shall not be used to supplant existing state or county funds utilized to provide mental health services. The Except as authorized in paragraph (7) of subdivision (a) of Section 5892, 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 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 Section 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 5892.
(b) Notwithstanding subdivision (a), 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.
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 allocate the following portions of funds available in the Mental Health Services Fund in 2005–06 and each year thereafter:
(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 California Mental Health Directors Association to implement plans developed pursuant to Section 5847.
(3) Twenty percent for prevention and early intervention programs distributed to counties in accordance with a formula developed in consultation with the California Mental Health Directors Association pursuant to Part 3.6 (commencing with Section 5840) of this division. Each county’s allocation of funds shall be distributed only after its annual program for expenditure of such funds has been approved by the Mental Health Services Oversight and Accountability Commission established pursuant to Section 5845.
(4) The allocation for prevention and early intervention may be increased in any county which the department determines that such 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. The statewide allocation for prevention and early intervention may be increased whenever the Mental Health Services Oversight and Accountability Commission determines that all counties are receiving all necessary funds for services to severely mentally ill persons and have established prudent reserves and there are additional revenues available in the fund.
(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) of this division, shall be utilized for innovative programs pursuant to an approved plan required by Section 5830 and such funds may be distributed by the department only after such programs have been approved by the Mental Health Services Oversight and Accountability Commission established pursuant to Section 5845.
(7) Prior to the distribution of funds under paragraphs (1) to (5), inclusive, effective July 1, 2009, the sum of two hundred twenty-six million seven hundred thousand dollars ($226,700,000) shall be redirected to support the Early and Periodic Screening, Diagnosis and Treatment (EPSDT) Program as administered by the State Department of Mental Health for the 2009–10 fiscal year. For the 2010–11 fiscal year prior to the distribution of funds under paragraphs (1) to (5), inclusive, effective July 1, 2010, the sum of two hundred twenty-six million seven hundred thousand dollars ($226,700,000) shall be redirected to support the EPSDT program, except that this amount may be adjusted to fund caseload as appropriate in the EPSDT program, but the total amount redirected for the 2010–11 fiscal year shall not exceed the sum of two hundred thirty-four million dollars ($234,000,000). This paragraph shall become inoperative on July 1, 2011.
(b) In any year after 2007–08, programs for services pursuant to Part 3 (commencing with Section 5800), and Part 4 (commencing with Section 5850) of this division 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 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 such 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) of this division.
(d) Prior to making the allocations pursuant to subdivisions (a), (b) and (c), the department shall also provide funds for the costs for itself, the California Mental Health Planning Council and the Mental Health Services Oversight and Accountability Commission to implement all duties pursuant to the programs set forth in this section. Such 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) of this division.
(e) In 2004–05 funds shall be allocated as follows:
(1) 45 percent for education and training pursuant to Part 3.1 (commencing with Section 5820) of this division.
(2) 45 percent for capital facilities and technology needs in the manner specified by paragraph (2) of subdivision (a).
(3) 5 percent for local planning in the manner specified in subdivision (c) and
(4) 5 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 such investments shall be transferred into the fund. The earnings on investment of these funds shall be available for distribution from the fund in future years.
(g) All expenditures for county mental health programs shall be consistent with a currently approved plan or update pursuant to Section 5847.
(h) Other than funds placed in a reserve in accordance with an approved plan, any funds allocated to a county which have not been spent for their authorized purpose within three years shall revert to the state to be deposited into the fund and available for other counties in future years, provided however, that funds for capital facilities, technological needs or education and training may be retained for up to 10 years before reverting to the fund.
(i) If there are still additional 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 such revenues to further the purposes of this act and the Legislature may appropriate such funds for any purpose consistent with the commission’s adopted plan which furthers the purposes of this act.