Mental Health Services Fund - Community Mental Health Services - CA Welfare And Institutions

Section § 5890

This section explains the creation and use of the Behavioral Health Services Fund in California. It is mainly used to fund behavioral health programs, including the No Place Like Home Program. The money in this fund is always available and doesn't expire yearly. Importantly, this law does not change existing requirements for healthcare and insurance companies to cover mental health services.

Additionally, it clarifies that the Department of Health Care Services must seek federal Medicaid approvals to maximize funding and ensure care for eligible individuals.

The creation of a Supportive Housing Program Subaccount within this fund is outlined, which is specifically allocated to assist with housing for eligible individuals. Up to $140 million can be transferred annually between these accounts, given certain conditions are met. However, the total transfers in a year should not exceed $140 million. This section will become operative if certain amendments are approved in a 2024 election.

(a)

(1) The Behavioral Health Services Fund is hereby created in the State Treasury.

(2) The fund shall be administered by the state.

(3) Notwithstanding Section 13340 of the Government Code, all moneys in the fund are, except as provided in subdivision (e) of Section 5892, continuously appropriated, without regard to fiscal years, for the purpose of funding the programs, services, and other related activities as specified in Section 5892 and Part 3.9 (commencing with Section 5849.1), the No Place Like Home Program.

(b)

(1) The establishment of this fund and other provisions of the act establishing it or the programs funded shall not be construed to modify the obligation of health care service plans and disability insurance policies to provide coverage for behavioral 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 and substance use disorder parity.

(2) This act does not 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) This act does not 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 and youth, adults, and older adults for medically necessary care.

(e) Share of costs for services pursuant to Part 3 (commencing with Section 5800) and Part 4 (commencing with Section 5850) shall be determined in accordance with the Uniform Method of Determining Ability to Pay applicable to other publicly funded mental health and substance use disorder treatment services, unless this uniform method is replaced by another method of determining copayments, in which case the new method applicable to other mental health and substance use disorder treatment services shall be applicable to services pursuant to Part 3 (commencing with Section 5800) and Part 4 (commencing with Section 5850).

(f)

(1) (A) The Supportive Housing Program Subaccount is hereby created in the Behavioral Health Services Fund.

(B) 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 service contracts entered into pursuant to Section 5849.35.

(C) Notwithstanding any other law, including any other provision of this section, no later than the last day of each month, the Controller shall, before any transfer or expenditure from the fund for any other purpose for the following month, transfer from the Behavioral Health Services Fund to the Supportive Housing Program Subaccount an amount that 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.

(D) If, in any month, the amounts in the Behavioral 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, to be transferred by the Controller with any transfer required by the preceding sentence.

(E) Moneys in the Supportive Housing Program Subaccount shall not be loaned to the General Fund pursuant to Section 16310 or 16381 of the Government Code.

(2)

(A) Prior to the issuance of any bonds pursuant to Section 15463 of the Government Code, the Legislature may appropriate for transfer funds in the Behavioral Health Services Fund to the Supportive Housing Program Subaccount in an amount up to one hundred forty million dollars ($140,000,000) per year.

(B) Any amount appropriated for transfer pursuant to this paragraph and deposited in the No Place Like Home Fund shall reduce the authorized but unissued amount of bonds that the California Health Facilities Financing Authority may issue pursuant to Section 15463 of the Government Code by a corresponding amount.

(C) Notwithstanding Section 13340 of the Government Code, all moneys in the subaccount transferred pursuant to this paragraph are reserved and continuously appropriated, without regard to fiscal years, for transfer to the No Place Like Home Fund, to be used for purposes of Part 3.9 (commencing with Section 5849.1).

(D) The Controller shall, before any transfer or expenditure from the fund for any other purpose for the following month but after any transfer from the fund for purposes of paragraph (1), transfer moneys appropriated from the Behavioral Health Services Fund to the subaccount pursuant to this paragraph in equal amounts over the following 12-month period, beginning no later than 90 days after the effective date of the appropriation by the Legislature.

(E) If, in any month, the amounts in the Behavioral Health Services Fund are insufficient to fully transfer to the subaccount or the amounts in the subaccount are insufficient to fully pay the amount appropriated for transfer pursuant to this paragraph, the shortfall shall be carried over to the next month.

(3) The sum of any transfer described in paragraphs (1) and (2) shall not exceed an aggregate of one hundred forty million dollars ($140,000,000) per year.

(4) Paragraph (2) shall become inoperative once bonds authorized pursuant to Section 15463 of the Government Code are issued.

(g) This section shall become operative on July 1, 2026, if amendments to the Mental Health Services Act are approved by the voters at the March 5, 2024, statewide primary election.

Behavioral Health Services Fund No Place Like Home Program mental health funding subaccount Supportive Housing Program Medicaid approvals mental health parity insurance coverage mental health services substance use disorder Department of Health Care Services funding authority housing finance California Health Facilities Financing Authority federal funds eligibility

(Repealed (in Sec. 87) and added by Stats. 2023, Ch. 790, Sec. 88. (SB 326) Effective April 17, 2024. Approved in Proposition 1 at the March 5, 2024, election. Operative July 1, 2026, by its own provisions.)

Section § 5891

This law states that funds set aside by this act should be used by counties to expand mental health and substance use disorder treatments and cannot replace existing state or county funds for these services. Additionally, the state must continue its financial support without changing the funding structure in ways that increase the financial burden on counties.

Counties should seek additional reimbursement from federal and other funding sources, and can report any non-cooperation from health plans to state insurance departments. While some of the funds can be loaned to the state’s General Fund, they must be repaid with interest without affecting the program's significant objectives.

The law also explains how unspent funds should be distributed to local behavioral health services monthly, based on counties’ integrated plans. This act won't alter health plans' responsibilities under existing healthcare laws and includes definitions for key terms such as "behavioral health services" and "substance use disorder." This section will become active if certain amendments are approved in a 2024 election.

(a)

(1) (A) The funding established pursuant to this act shall be utilized by counties to expand mental health and substance use disorder treatment services.

(B) These funds shall not be used to supplant existing state or county funds utilized to provide mental health services or substance use disorder treatment services.

(C) The state shall continue to provide financial support for mental health and substance use disorder 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.

(D) The state shall not make a change to the structure of financing mental health and substance use disorder treatment services that increases a county’s share of costs or financial risk for behavioral health services unless the state includes adequate funding to fully compensate for such increased costs or financial risk.

(E) These funds shall only be used to pay for the programs authorized in Sections 5890 and 5892.

(F) These funds may not be used to pay for another program.

(G) These funds may not be loaned to the General Fund or another fund of the state, a county general fund, or another county fund for any purpose other than those authorized by Sections 5890 and 5892.

(2) To maximize federal financial participation in furtherance of subdivision (d) of Section 5890, a county shall submit claims for reimbursement to the State Department of Health Care Services in accordance with applicable Medi-Cal rules and procedures for a behavioral health service or supportive service eligible for reimbursement pursuant to Title XIX or XXI of the federal Social Security Act (42 U.S.C. Sec. 1396, et seq. and 1397aa, et seq.) when such service is paid, in whole or in part, using the funding established pursuant to this act.

(3)

(A) To maximize funding from other sources, a county shall seek reimbursement for a behavioral health service, supportive service, housing intervention, or other related activity provided, pursuant to subdivision (a) of Section 5892, that is covered by or can be paid from another available funding source, including other mental health funds, substance use disorder funds, public and private insurance, and other local, state, and federal funds. This paragraph does not require counties to exhaust other funding sources before using behavioral health services fund moneys to pay for a service or related activity.

(B) A county shall make a good faith effort to enter into contracts, single case agreements, or other agreements to obtain reimbursement with health care service plans and disability insurance plans, pursuant to Section 1374.72 of the Health and Safety Code and Section 10144.5 of the Insurance Code.

(C) A county shall also submit requests for prior authorization for services, request letters of agreement for payment as an out-of-network provider, and pursue other means to obtain reimbursement in accordance with state and federal laws.

(4)

(A) A county may report to the Department of Managed Health Care or the Department of Insurance, as appropriate, complaints about a health plan’s or a health insurer’s failure to make a good faith effort to contract or enter into a single case agreement or other agreement with the county.

(B) A county may also report to the Department of Managed Health Care or the Department of Insurance, respectively, a failure by a health plan or insurer to timely reimburse the county for services the plan or insurer must cover as required by state or federal law, including, but not limited to, Sections 1374.72 and 1374.721 of the Health and Safety Code and Sections 10144.5 and 10144.52 of the Insurance Code.

(C) Upon receipt of a complaint from a county, the Department of Managed Health Care or the Department of Insurance, as applicable, shall timely investigate the complaint.

(b)

(1) (A) 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.

(B) Those loans 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.

(C) This subdivision does not authorize a 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 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 Behavioral 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 Behavioral Health Services Fund, established pursuant to Section 5890, for the provision of programs and other related activities set forth in Section 5892.

(d)

(1) A county shall base its expenditures on the county mental health and substance use disorder program’s integrated plan or annual update as required by Section 5963.02 or intermittent update pursuant to subdivision (c) of Section 5963.03.

(2) This subdivision does not affect subdivision (a) or (b).

(e) Each year, the State Department of Health Care Services shall post on its internet website the methodology used for allocating revenue from the Behavioral Health Service Fund to the counties.

(f) For purposes of this section, “behavioral health services” shall have the meaning as defined in subdivision (k) of Section 5892.

(g) For purposes of this section, “substance use disorder” shall have the meaning as defined in subdivision (c) of Section 5891.5.

(h) For purposes of this section, “substance use disorder treatment services” shall have the meaning as defined in subdivision (c) of Section 5891.5.

(i) For purposes of this section, “supportive services” shall have the meaning as defined in subdivision (h) of Section 5887.

(j) This act shall not be construed to modify or reduce a health plan’s obligations under the Knox-Keene Health Care Service Plan Act of 1975.

(k) This section shall become operative on July 1, 2026, if amendments to the Mental Health Services Act are approved by the voters at the March 5, 2024, statewide primary election.

mental health funding substance use disorder county reimbursement state funding support behavioral health services federal financial participation fund allocation supportive housing program health insurance reimbursement fund loan repayment Knox-Keene Act financial risk protection county mental health plans state healthcare laws voter-approved amendments

(Repealed (in Sec. 89) and added by Stats. 2023, Ch. 790, Sec. 90. (SB 326) Effective April 17, 2024. Approved in Proposition 1 at the March 5, 2024, election. Operative July 1, 2026, by its own provisions.)

Section § 5891.5

This law allows counties in California to include substance use disorder treatment as part of their health programs for all age groups. While providing housing to people with substance use disorders is optional, counties offering treatment must include all FDA-approved medications for addiction treatment. Funds from the Behavioral Health Services Act can be used to assess and treat people for substance use disorders, even before a diagnosis is confirmed.

Counties must report data on their treatment services to the state, which will publish a summary annually. This law defines substance use disorder based on moderate or severe conditions listed in medical guidelines, excluding tobacco and non-substance disorders. It will become active in 2026, depending on voter approval in 2024.

(a)

(1) Notwithstanding any other law, the programs and services and supports in paragraphs (1), (2), and (3) of subdivision (a) of Section 5892 may include substance use disorder treatment services, as defined in this section for children, youth, adults, and older adults.

(2) Notwithstanding Section 5830, the provision of housing interventions to individuals with a substance use disorder shall be optional for counties.

(3) Counties that provide substance use disorder treatment services shall provide all forms of federal Food and Drug Administration approved medications for addiction treatment.

(4) Funding established pursuant to the Behavioral Health Services Act may be used to assess whether a person has a substance use disorder and to treat a person prior to a diagnosis of a substance use disorder, even when the person is later determined not to be eligible for services provided with funding established pursuant to the Behavioral Health Services Act.

(5) Substance use disorder treatment services shall be identified in a county’s integrated plan or annual update, as required by Section 5963.02.

(b)

(1) A county shall report to the department data and information regarding implementation of this section specified by the department.

(2) The data and information shall be reported in a form, manner, and frequency determined by the department.

(c)

(1) For purposes of this section, “substance use disorder” means an adult, child, or youth who has at least one diagnosis of a moderate or severe substance use disorder from the most current version of the Diagnostic and Statistical Manual of Mental Disorders for Substance-Related and Addictive Disorders, with the exception of tobacco-related disorders and non-substance-related disorders.

(2) For purposes of this section, “substance use disorder treatment services” include harm reduction, treatment, and recovery services, including federal Food and Drug Administration approved medications.

(d)

(1) The department shall, by January 1, 2022, and each January 1 thereafter, publish on its internet website a report summarizing county activities pursuant to this section for the prior fiscal year.

(2) Data shall be reported statewide and by county or groupings of counties, as necessary to protect the private health information of persons assessed.

(e) This section shall become operative on July 1, 2026, if amendments to the Mental Health Services Act are approved by the voters at the March 5, 2024, statewide primary election.

substance use disorder treatment housing interventions FDA-approved medications Behavioral Health Services Act county health programs reporting requirements diagnostic assessment harm reduction services recovery services Moderate or Severe DSMV diagnosis annual report county data voter approval requirement operative date 2026

(Repealed (in Sec. 91) and added by Stats. 2023, Ch. 790, Sec. 92. (SB 326) Effective April 17, 2024. Approved in Proposition 1 at the March 5, 2024, election. Operative July 1, 2026, by its own provisions.)

Section § 5892

This law outlines how counties in California should use funds from the Behavioral Health Services Fund to support mental health and housing programs. Counties must allocate funds for specific purposes such as housing programs, full-service partnerships, and general behavioral health services. Counties have flexibility in fund allocation but need approval for changes and must ensure services prioritize vulnerable populations like homeless individuals and those at risk of entering the justice system.

Furthermore, counties are required to maintain a financial reserve to support these programs during low-revenue years and plan for the prudent use of funds. Counties with populations under 200,000 can apply for exemptions from certain funding requirements under specific conditions. The statute also mandates collaboration between the State Department of Health Care Services and other associations for efficient fund management and program implementation, focusing heavily on early intervention and workforce development to improve behavioral health outcomes.

(a) To promote efficient implementation of this act, subject to subdivision (c), the county shall use funds distributed from the Behavioral Health Services Fund as follows:

(1)

(A) (i) Thirty percent of funds distributed to the counties pursuant to subdivision (c) of Section 5891 shall be used for housing interventions programs pursuant to Part 3.2 (commencing with Section 5830).

(ii) Of the funds distributed pursuant to clause (i), 50 percent shall be used for housing interventions for persons who are chronically homeless, with a focus on those in encampments.

(iii) Of the funds distributed to pursuant clause (i), no more than 25 percent may be used for capital development projects pursuant to paragraph (2) of subdivision (b) of Section 5830.

(B) Commencing with the 2026–29 fiscal years’ county integrated plan, pursuant to Section 5963.02, and ongoing thereafter, for counties with a population of less than 200,000, the State Department of Health Care Services shall establish criteria and a process for approving county requests for an exemption from subparagraph (A) that considers factors including a county’s homeless population, the number of individuals receiving Medi-Cal specialty behavioral health services or substance use disorder treatment services in another county, and other factors as determined by the State Department of Health Care Services. The State Department of Health Care Services shall collaborate with the California State Association of Counties and the County Behavioral Health Directors Association of California on reasonable criteria for those requests and a timely and efficient exemption process. Requests for approval of an exemption under this subparagraph shall be responded to, approved, or denied within 30 days of receipt by the department, or shall otherwise be deemed approved by the department.

(C) Commencing with the 2032–35 fiscal years’ county integrated plan, pursuant to Section 5963.02, and ongoing thereafter, the State Department of Health Care Services may establish criteria and a process for approving county requests for an exemption from subparagraph (A) that considers the factors set forth in subparagraph (B), regardless of the population size of the county. The State Department of Health Care Services shall collaborate with the California State Association of Counties and the County Behavioral Health Directors Association of California on reasonable criteria for those requests and a timely and efficient exemption process.

(2)

(A) Thirty-five percent of the funds distributed to counties pursuant to subdivision (c) of Section 5891 shall be used for full-service partnership programs pursuant to Part 4.1 (commencing with Section 5887).

(B) Commencing with the 2032–35 fiscal years’ county integrated plan, pursuant to Section 5963.02, and ongoing thereafter, the State Department of Health Care Services may establish criteria and a process for approving requests for an exemption from subparagraph (A) that considers factors such as county population, client counts, and other factors as determined by the State Department of Health Care Services. The State Department of Health Care Services shall collaborate with the California State Association of Counties and the County Behavioral Health Directors Association of California on reasonable criteria for those requests and a timely and efficient exemption process.

(C) Housing interventions provided to individuals enrolled in full-service partnership programs shall be funded pursuant to subparagraph (A) of paragraph (1).

(3)

(A) Thirty-five percent of the funds distributed to counties pursuant to subdivision (c) of Section 5891 shall be used for the following Behavioral Health Services and Supports:

(i) Services 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, excluding those services specified in paragraphs (1) and (2).

(ii) Early intervention programs in accordance with Part 3.6 (commencing with Section 5840).

(iii) Outreach and engagement.

(iv) Workforce education and training.

(v) Capital facilities and technological needs.

(vi) Innovative behavioral health pilots and projects.

(B)

(i) A county shall utilize at least 51 percent of Behavioral Health Services and Supports funding for early intervention programs.

(ii) A county shall utilize at least 51 percent of the county’s funding allocated for early intervention programs to serve individuals who are 25 years of age and younger.

(iii) A county shall comply with other funding allocations specified by the State Department of Health Care Services for the purposes listed in subparagraph (A).

(4)

(A) A county may pilot and test innovative behavioral health models of care programs or innovative promising practices for the programs specified in paragraphs (1), (2), and (3).

(B) The goal of these innovative pilots and innovative promising practices is to build the evidence base for the effectiveness of new statewide strategies.

(5) The programs established pursuant to paragraphs (1), (2), (3), and (4) shall include services to address the needs of eligible children and youth, 0 to 5 years of age, inclusive, transition age youth, and foster youth.

(6) A county is only obligated to fund the programs established pursuant to paragraphs (1) to (4), inclusive, with the funds it receives pursuant to subdivision (c) of Section 5891.

(b)

(1) A county shall establish and maintain a prudent reserve to ensure county programs are able to continue to meet the needs of children and youth, adults, and older adults participating in housing intervention programs pursuant to paragraph (1) of subdivision (a), full-service partnership programs pursuant to paragraph (2) of subdivision (a), and receiving services pursuant to clauses (i), (ii), and (iii) of paragraph (3) of subdivision (a), during years in which revenues for the Behavioral Health Services Fund are below recent averages adjusted by changes in the state population and the California Consumer Price Index.

(2) Notwithstanding the allocation percentages specified in paragraphs (1), (2), and (3) of subdivision (a), a county may transfer funds into the prudent reserve from housing intervention programs pursuant to paragraph (1) of subdivision (a), full-service partnership programs pursuant to paragraph (2) of subdivision (a), and Behavioral Health Services and Supports pursuant to paragraph (3) of subdivision (a).

(3) A county shall calculate a maximum amount it establishes as the prudent reserve for its Local Behavioral Health Services Fund, not to exceed 20 percent of the average of the total funds distributed to the county pursuant to subdivision (c) of Section 5891 in the preceding five years.

(4) A county with a population of less than 200,000 shall calculate a maximum amount it establishes as the prudent reserve for its Local Behavioral Health Services Fund, not to exceed 25 percent of the average of the total funds distributed to the county pursuant to subdivision (c) of Section 5891 in the preceding five years.

(5)

(A) A county shall assess the maximum amount of its prudent reserve pursuant to paragraphs (3) and (4) every three years and shall include a plan for the expenditure of funds exceeding the maximum amount in the county’s integrated plan required pursuant to Section 5963.02.

(B) A county shall spend funds exceeding the maximum amount on programs and services authorized in paragraphs (1), (2), and (3) of subdivision (a).

(6)

(A) A county shall spend prudent reserve funds on the programs and services authorized in paragraphs (1) and (3), and clauses (i), (ii), and (iii) of paragraph (3) of subdivision (a).

(B) A county shall not spend prudent reserve funds for the purposes specified in paragraph (2) of subdivision (b) of Section 5830.

(c)

(1) A county may transfer up to 14 percent of the total funds allocated to the county in a fiscal year between one or more of the purposes authorized in paragraphs (1), (2) and (3) of subdivision (a). A county shall not decrease the allocation for any one of the purposes authorized in paragraph (1), (2) or (3) by more than 7 percent of the total funds allocated to the county in a fiscal year. County changes to the allocation percentages specified in paragraphs (1), (2), and (3) of subdivision (a) shall be subject to the approval of the State Department of Health Care Services.

(2) A county changing its allocation percentages pursuant to this subdivision does not relieve the county from the obligation to comply with any applicable laws, including, but not limited to, clauses (ii) and (iii) of subparagraph (A) of paragraph (1), and paragraphs (3) and (5), of subdivision (a).

(3) A county shall include proposed changes to the allocation percentages in the county integrated plan pursuant to Section 5963.02, and shall consult with local stakeholders pursuant to Section 5963.03.

(4) A county shall submit a request to shift funding allocation to the State Department of Health Care Services for approval after fulfilling the integrated planning and local stakeholder consultation requirements pursuant to Sections 5963.02 and 5963.03. The county shall submit the request for approval in a form and manner, and in accordance with timelines, prescribed by the department. Counties shall provide any other information, records, and reports that the department deems necessary for the purposes of this subdivision. The State Department of Health Care Services shall collaborate with the California State Association of Counties and the County Behavioral Health Directors Association of California on reasonable criteria for those requests and a timely and efficient approval process. Requests for approval of a shift under this subparagraph shall be responded to, approved, or denied within 30 days of receipt by the department, or shall otherwise be deemed approved by the department.

(A) The department shall review a county’s request based on the county’s compliance with paragraphs (1) and (2) and demonstration that the requested shift is responsive to local priorities, based on, at a minimum, local data and community input in the planning process.

(B) The State Department of Health Care Services may approve a proposed shift in funding allocations for the current integrated planning period based upon data and information a county submits demonstrating the need for the adjustment.

(C) Unless an annual change is approved by the State Department of Health Care Services, approved allocation adjustments are irrevocable during the applicable three-year period and a county shall not adjust the allocation of funds in the county’s subsequent annual and intermittent updates to the county’s integrated plan. The State Department of Health Care Services shall collaborate with the California State Association of Counties and the County Behavioral Health Directors Association on reasonable criteria for such requests and a timely and efficient approval process. Requests for approval of a change under this subparagraph shall be responded to, approved, or denied within 30 days of receipt by the department, or shall otherwise be deemed approved by the department.

(d) The programs established pursuant to subdivision (a) shall prioritize services for the following populations:

(1) Eligible adults and older adults, as defined in subdivision (k), who satisfy one of the following:

(A) Are chronically homeless or experiencing homelessness or are at risk of homelessness.

(B) Are in, or are at risk of being in, the justice system.

(D) Are at risk of conservatorship pursuant to Chapter 3 (commencing with Section 5350) of Part 1 of Division 5.

(E) Are at risk of institutionalization.

(2) Eligible children and youth, as defined in subdivision (k), who satisfy one of the following:

(A) Are chronically homeless or experiencing homelessness or are at risk of homelessness.

(B) Are in, or at risk of being in, the juvenile justice system.

(D) Are in the child welfare system pursuant to Section 300, 601, or 602.

(E) Are at risk of institutionalization.

(e)

(1) (A) Notwithstanding subdivision (a) of Section 5891, the allocations pursuant to subdivision (a) shall include funding for annual planning costs pursuant to Sections 5963.02 and 5963.03.

(B) The total of these costs shall not exceed 5 percent of the total of annual revenues received for the Local Behavioral Health Services Fund.

(C) The planning costs shall include funds for county mental health and substance use disorder programs to pay for the costs of consumers, family members, and other stakeholders to participate in the planning process.

(2)

(A) Notwithstanding subdivision (a) of Section 5891, the allocations pursuant to subdivision (a) may include funding to improve plan operations, quality outcomes, fiscal and programmatic data reporting pursuant to Section 5963.04, and monitoring of subcontractor compliance for all county behavioral health programs, including, but not limited to, programs administered by a Medi-Cal behavioral health delivery system, as defined in subdivision (i) of Section 14184.101, and programs funded by the Projects for Assistance in Transition from Homelessness grant, the Community Mental Health Services Block Grant, and other Substance Abuse and Mental Health Services Administration grants.

(B) The total of the costs in subparagraph (A) shall not exceed 2 percent of the total of annual revenues received for the Local Behavioral Health Services Fund. For counties with a population of less than 200,000, the total of the costs in subparagraph (A) shall not exceed 4 percent of the total annual revenues received from the Local Behavioral Health Services Fund.

(D) Notwithstanding any other law, new costs to implement this article that exceed existing county obligations and are in excess of the funds provided by subparagraph (B) of paragraph (2) of subdivision (e) shall be evaluated by the State Department of Health Care Services for inclusion in the Governor’s 2024–25 May Revision. The department shall consult with the California State Association of Counties and the County Behavioral Health Directors Association of California, no later than March 15, 2024, to evaluate the resources needed to implement this article.

(f)

(1) Notwithstanding subdivision (a) of Section 5891, prior to making the allocations pursuant to subdivisions (a), (b), (d), and (e), funds shall be reserved for:

(A) State directed purposes consistent with the Behavioral Health Services Act, for the California Health and Human Services Agency, State Department of Health Care Services, the California Behavioral Health Planning Council, the Department of Health Care Access and Information, the Behavioral Health Services Oversight and Accountability Commission, the State Department of Public Health, and any other state agency.

(B) The costs to assist consumers and family members so that the appropriate state and county agencies give full consideration to concerns about quality, structure of service delivery, or access to services.

(C) The costs for research and evaluation regarding the effectiveness of programs and services listed in subdivision (a) and achievement of the outcome measures and metrics pursuant to subdivision (d) of Section 5897.

(D)

(i) The costs of the Department of Health Care Access and Information to implement a behavioral health workforce initiative. The cost for this initiative shall be a minimum of 3 percent of the total funds allocated pursuant to this subdivision.

(ii) This initiative shall be developed in consultation with stakeholders, including, but not limited to, behavioral health professionals, counties, behavioral health education and training programs, and behavioral health consumer advocates. The initiative shall focus on efforts to build and support the workforce to meet the need to provide holistic and quality services and support the development and implementation of strategies for training, supporting, and retaining the county behavioral health workforce and noncounty contracted behavioral health workforce, including efforts to increase the racial, ethnic, and linguistic diversity of behavioral health providers and increase access to behavioral health providers in geographically underserved areas.

(iii) A portion of the workforce initiative may focus on providing technical assistance and support to county contracted providers to implement and maintain workforce provisions that support the stabilization and retention of the broad behavioral health workforce.

(iv) A portion of the workforce initiative may focus on providing technical assistance and support to county and contracted providers to maximize the use of peer support specialists.

(E) The costs for the State Department of Public Health to provide population-based mental health and substance use disorder prevention programs. A minimum of 4 percent of the total funds allocated pursuant to this subdivision shall be distributed to the State Department of Public Health for this purpose. Of these funds, at least 51 percent shall be used for programs serving populations who are 25 years of age or younger. The State Department of Public Health shall consult with the State Department of Health Care Services and the Behavioral Health Services Oversight and Accountability Commission to ensure the provision of these programs.

(i) Population-based prevention programs are activities designed to reduce the prevalence of mental health and substance use disorders and resulting conditions.

(ii) Population-based prevention programs shall incorporate evidence-based promising or community-defined evidence practices and meet one or more of the following conditions:

(I) Target the entire population of the state, county, or particular community to reduce the risk of individuals developing a mental health or substance use disorder.

(II) Target specific populations at elevated risk for a mental health, substance misuse, or substance use disorder.

(III) Reduce stigma associated with seeking help for mental health challenges and substance use disorders.

(IV) Target populations disproportionately impacted by systemic racism and discrimination.

(V) Prevent suicide, self-harm, or overdose.

(iii) Population-based prevention programs may be implemented statewide or in community settings.

(iv) Population-based prevention programs shall not include the provision of early intervention, diagnostic, and treatment for individuals.

(v) Population-based prevention programs shall be provided on a schoolwide or classroom basis and may be provided by a community-based organization off campus or on school grounds.

(vi) School-based prevention supports and programs shall be provided at a school site or arranged for by a school on a schoolwide or classroom basis and shall not provide services and supports for individuals. These supports and programs may include, but are not limited to:

(I) School-based health centers, student wellness centers, or student wellbeing centers.

(II) Activities, including, but not limited to, group coaching and consultation, designed to prevent substance misuse, increase mindfulness, self-regulation, development of protective factors, calming strategies, and communication skills.

(III) Integrated or embedded school-based programs designed to reduce stigma associated with seeking help for mental health challenges and substance use disorders.

(IV) Student mental health first aid programs designed to identify and prevent suicide or overdose.

(V) Integrated training and systems of support for teachers and school administrators designed to mitigate suspension and expulsion practices and assist with classroom management.

(vii) Early childhood population-based prevention programs for children 0 to 5 years of age, inclusive, shall be provided in a range of settings.

(viii) Funding under this provision shall comply with Section 5891 and shall be used to strengthen population-based strategies and not supplant funding for services and supports for which ongoing funding is available through Children and Youth Behavioral Health Initiative or other sources.

(F) The Behavioral Health Services Act Innovation Partnership Fund as provided for in Section 5845.1. A maximum of twenty million dollars ($20,000,000) shall be deposited into the fund annually, for fiscal years 2026–27 to 2030–31, inclusive. Thereafter funding shall be determined through the annual budget act.

(G) At its discretion, the commission may utilize funding received in support of the Mental Health Wellness Act to support this section, consistent with subparagraph (F) of paragraph (2) of subdivision (g), and subdivision (h), of Section 5848.5.

(2) The costs for the purposes specified in paragraph (1) shall not exceed 10 percent of the total of annual revenues received for the State Behavioral Health Services Fund. The amount of funds available for the purposes of this subdivision in any fiscal year is subject to appropriation in the annual Budget Act.

(g) Each county shall place all funds received from the State Behavioral Health Services Fund in a local Behavioral Health Services Fund. The Local Behavioral 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.

(h) All expenditures for county behavioral health programs shall be consistent with a currently approved county integrated plan or annual update pursuant to Section 5963.02 or an intermittent update prepared pursuant to subdivision (c) of Section 5963.03.

(i)

(1) Other than funds placed in a reserve in accordance with an approved plan, any funds allocated to a county that have not been spent for their authorized purpose within three years, and the interest accruing on those funds, shall revert to the state to be deposited into the Reversion Account, hereby established in the fund, and available for other counties in future years, provided, however, that funds, including interest accrued on those funds, for capital facilities, technological needs, or education and training may be retained for up to 10 years before reverting to the Reversion Account.

(2)

(A) The Controller shall revert funds by offsetting amounts from each monthly distribution to a county’s Local Behavioral Health Service Fund pursuant to subdivision (c) of Section 5891, until the full amount of the reverted funds has been offset. The reverted funds shall be deposited into the Reversion Account for use, consistent with this section and Sections 5890, 5891 and 5891.5, as determined by the State Department of Health Care Services.

(B) Funds that have been reverted that are owed to a county as a result of an audit adjustment, or for other reasons, shall be paid from the Reversion Account. If the balance of funds in the Reversion Account is inadequate, funds owed to a county shall be offset from the monthly distributions to other counties pursuant to subdivision (c) of Section 5891, based on a methodology provided by the State Department of Health Care Services. Owed funds shall be paid to a county in the monthly distribution pursuant to subdivision (c) of Section 5891.

(C) If the State Department of Health Care Services withholds funds from a monthly distribution to a county pursuant to subdivision (e) of Section 5963.04, funds shall be reverted first and the remaining balance shall be withheld.

(3) Notwithstanding paragraph (1), funds allocated to a county with a population of less than 200,000 that have not been spent for their authorized purpose within five years shall revert to the state as described in paragraph (1).

(j) If there are revenues available in the fund after the State Department of Health Care Services has determined there are prudent reserves and no unmet needs for any of the programs funded pursuant to this section, the department, in consultation with counties, 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 department’s plan that furthers the purposes of this act.

(k) For purposes of this section, the following definitions shall apply:

(1) “Behavioral health services” means mental health services and substance use disorder treatment services, as defined in Section 5891.5.

(2) “Chronically homeless” means an individual or family that is chronically homeless, as defined in Section 11360 of Title 42 of the United States Code, or as otherwise modified or expanded by the State Department of Health Care Services.

(3) “Experiencing homelessness or are at risk of homelessness” means people who are homeless or at risk of homelessness, as defined in Section 91.5 of Title 24 of the Code of Federal Regulations, or as otherwise defined by the State Department of Health Care Services for purposes of the Medi-Cal program.

(4) “Outreach and engagement” means activities to reach, identify, and engage individuals and communities in the behavioral health system, including peers and families, and to reduce disparities. Counties may include evidence-based practices and community-defined evidence practices in the provision of activities.

(5) “Workforce education and training” includes, but is not limited to, the following for the county workforce:

(A) Workforce recruitment, development, training, and retention.

(B) Professional licensing and/or certification testing and fees.

(D) Retention incentives and stipends.

(E) Internship and apprenticeship programs.

(F) Continuing education.

(G) Efforts to increase the racial, ethnic, and geographic diversity of the behavioral health workforce.

(6) “Community-defined evidence practices” means an alternative or complement to evidence-based practices, that offer culturally anchored interventions that reflect the values, practices, histories, and lived-experiences of the communities they serve. These practices come from the community and the organizations that serve them and are found to yield positive results as determined by community consensus over time.

(7)

(A) “Eligible children and youth” means persons who are 25 years of age or under, including early childhood or transition age youth who do either of the following:

(i) Meet the criteria specified in subdivision (d) of Section 14184.402, notwithstanding age limitations.

(ii) Have a substance use disorder, as defined in subdivision (c) of Section 5891.5.

(B) Eligible children and youth are not required to be enrolled in the Medi-Cal program.

(8)

(A) “Eligible adults and older adults” means persons who are 26 years of age or older who do either of the following:

(i) Meet the criteria specified in subdivision (c) of Section 14184.402.

(ii) Have a substance use disorder, as defined in subdivision (c) of Section 5891.5.

(B) Eligible adults and older adults are not required to be enrolled in the Medi-Cal program.

(l) This section shall become operative on July 1, 2026, if amendments to the Mental Health Services Act are approved by the voters at the March 5, 2024, statewide primary election.

Behavioral Health Services Fund housing interventions homelessness exemption process full-service partnerships early intervention programs county integrated plan prudent reserve fund allocation changes mental health workforce statewide strategies school-based prevention programs stakeholder consultation innovative behavioral health pilots population-based prevention programs

(Added by Stats. 2023, Ch. 790, Sec. 95. (SB 326) Effective April 17, 2024. Approved in Proposition 1 at the March 5, 2024, election. Operative July 1, 2026, by its own provisions.)

Section § 5892.1

This law addresses how California handles unspent mental health funds. Any funds that weren't used and were supposed to revert back as of July 1, 2017, are being sent back to the counties they came from. By July 1, 2018, a report must detail the funds that should have reverted before July 1, 2017, and counties have a chance to contest these reversion amounts. Counties need to plan to use these funds by July 1, 2020. If they don't submit a plan by January 1, 2019, they'll have to give the funds back to the state. If the funds aren't used by July 1, 2020, they revert to the state, unless they're innovation funds, which have a later deadline. The requirement for report submission stops being active after July 1, 2022. The department can issue guidance through letters instead of formal regulations until July 1, 2019. These processes only become effective July 1, 2026, if voters approve changes in a 2024 election.

(a) All unspent funds subject to reversion pursuant to subdivision (i) of Section 5892 as of July 1, 2017, are deemed to have been reverted to the fund and reallocated to the county of origin for the purposes for which they were originally allocated.

(b)

(1) The department shall, on or before July 1, 2018, in consultation with counties and other stakeholders, prepare a report to the Legislature identifying the amounts that were subject to reversion prior to July 1, 2017, including to which purposes the unspent funds were allocated pursuant to Section 5892.

(2) Prior to the preparation of the report referenced in paragraph (1), the department shall provide to counties the amounts it has determined are subject to reversion and provide a process for counties to appeal this determination.

(c)

(1) By July 1, 2018, each county with unspent funds subject to reversion that are deemed reverted and reallocated pursuant to subdivision (a) shall prepare a plan to expend these funds on or before July 1, 2020. The plan shall be submitted to the commission for review.

(2) A county with unspent funds that are deemed reverted and reallocated pursuant to subdivision (a) that has not prepared and submitted a plan to the commission pursuant to paragraph (1) as of January 1, 2019, shall remit the unspent funds to the state pursuant to paragraph (1) of subdivision (i) of Section 5892 no later than July 1, 2019.

(d) Funds included in the plan required pursuant to subdivision (c) that are not spent as of July 1, 2020, shall revert to the state pursuant to paragraph (1) of subdivision (i) of Section 5892.

(e) Notwithstanding subdivision (d), innovation funds included in the plan required pursuant to subdivision (c) that are not spent by July 1, 2020, or the end of the project plan approved by the Behavioral Health Service Oversight and Accountability Commission pursuant to subdivision (e) of Section 5830, whichever is later, shall revert to the state pursuant to subdivision (h) of Section 5892.

(f)

(1) The requirement for submitting a report imposed under subdivision (b) is inoperative on July 1, 2022, pursuant to Section 10231.5 of the Government Code.

(2) A report to be submitted pursuant to subdivision (b) shall be submitted in compliance with Section 9795 of the Government Code.

(g)

(1) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department, without taking further regulatory action, may implement, interpret, or make specific this section, Section 5899.1, and subdivision (h) of Section 5892 by means of all-county letters or other similar instructions until applicable regulations are adopted in accordance with Section 5898 or until July 1, 2019, whichever occurs first.

(2) The all-county letters or other similar instructions shall be issued only after the department provides the opportunity for public participation and comments.

(h) This section shall be operative on July 1, 2026, if amendments to the Mental Health Services Act are approved by the voters at the March 5, 2024, statewide primary election.

unspent mental health funds reversion of funds county reallocation expenditure plans reporting obligations fund reversion deadlines innovation funds public participation July 1 2020 deadline Behavioral Health Service Oversight Accountability Commission report inoperativity all-county letters appeal process 2024 voter approval

(Repealed (in Sec. 96) and added by Stats. 2023, Ch. 790, Sec. 97. (SB 326) Effective October 12, 2023. Operative July 1, 2026, by its own provisions.)

Section § 5892.3

This law creates a workgroup called the Behavioral Health Services Act Revenue Stability Workgroup. Its job is to look into fluctuations in tax revenues from the Behavioral Health Services Act and come up with strategies to keep funding stable for related county programs, starting by June 30, 2024. The workgroup will make recommendations to reduce revenue unpredictability and suggest reserve levels to sustain services.

The workgroup includes representatives from several bodies, such as the Behavioral Health Services Oversight and Accountability Commission, and will be led by the California Health and Human Services Agency and the State Department of Health Care Services. Their findings should be reported to the Legislature and Governor by June 30, 2025. The group can meet as needed to do its work, and the Department of Finance may provide help if required.

If it's found that their strategies are not working over time, the workgroup can be reconvened to reassess the situation.

(a) There is hereby created a Behavioral Health Services Act Revenue Stability Workgroup to assess year-over-year fluctuations in tax revenues generated by the Behavioral Health Services Act, in recognition of the need for a reliable strategy for short- and long-term fiscal stability, commencing no later than June 30, 2024.

(b) The workgroup shall develop and recommend solutions to reduce Behavioral Health Services Act revenue volatility and to propose appropriate prudent reserve levels to support the sustainability of county programs and services.

(c)

(1) The California Health and Human Services Agency and the State Department of Health Care Services shall jointly convene and lead the workgroup.

(2) Members of the workgroup shall serve without compensation. Members shall include representatives from the following entities:

(A) Behavioral Health Services Oversight and Accountability Commission.

(B) Legislative Analyst’s Office.

(D) California State Association of Counties, including both urban and rural county representatives.

(3) The California Department of Finance may consult with the workgroup, as needed, to provide technical assistance.

(d) The workgroup shall review and analyze current and historical revenues generated pursuant to the Mental Health Services Act and the Behavioral Health Services Act and current and historical prudent reserve levels to develop the recommendations specified in subdivision (b).

(e) On or before June 30, 2025, the California Health and Human Services Agency and the State Department of Health Care Services shall submit a report that includes its recommendations specified in subdivision (b) to the Legislature and the Governor’s Office.

(f) The workgroup may meet as often as necessary, as determined by the members of the workgroup, until the workgroup is disbanded upon submission of the report specified in subdivision (b).

(g) Prudent reserve requirements specified in this subdivision may be changed, and requirements to mitigate Behavioral Health Services Act revenue volatility and improve fiscal stability may be developed, based upon recommendations made by the Behavioral Health Services Act Revenue Stability Workgroup pursuant to Section 5892.3.

(h) The California Health and Human Services Agency and the State Department of Health Care Services may jointly reconvene the workgroup, if at any point the recommended revenue volatility strategy and prudent reserve requirements no longer adequately support the sustainability of county programs and services given the year-over-year fluctuations in tax revenues generated by the Behavioral Health Services Act.

Behavioral Health Services Act revenue stability fiscal stability revenue volatility prudent reserve levels county programs sustainability tax revenue fluctuations California Health and Human Services Agency State Department of Health Care Services Behavioral Health Services Oversight and Accountability Commission Legislative Analyst’s Office County Behavioral Health Director’s Association California State Association of Counties technical assistance tax revenue recommendations

(Added by Stats. 2023, Ch. 790, Sec. 98. (SB 326) Effective April 17, 2024. Approved in Proposition 1 at the March 5, 2024, election. Operative January 1, 2025, pursuant to Sec. 117 of Proposition 1.)

Section § 5892.5

This law allows California counties to request the release of certain unspent funds from the Behavioral Health Services Fund, which are allocated to a housing program aimed at supporting mental health services. The county must use these funds for housing interventions as outlined in a specific section.

Additionally, counties must follow all the relevant requirements of the Behavioral Health Services Act when using these funds. The law will only take effect if voters approve new amendments to the Mental Health Services Act in the March 2024 statewide election, becoming operational on July 1, 2026.

(a)

(1) The California Housing Finance Agency, with the concurrence of the State Department of Health Care Services, shall release unencumbered Behavioral Health Services Fund moneys dedicated to the Mental Health Services Act housing program upon the written request of the respective county.

(2) The county shall use these Behavioral Health Services Fund moneys released by the agency to provide housing interventions pursuant to Section 5830.

(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 Behavioral Health Services Act, including, but not limited to, Section 5664, Section 5963.02, subdivision (g) of Section 5892, and Section 5963.04.

(c) This section shall become operative on July 1, 2026, if amendments to the Mental Health Services Act are approved by the voters at the March 5, 2024, statewide primary election.

California Housing Finance Agency Behavioral Health Services Fund Mental Health Services Act housing interventions county requests unencumbered funds Section 5830 housing program county compliance Behavioral Health Services Act requirements voter approval amendments statewide primary election operative date July 1 2026

(Repealed (in Sec. 99) and added by Stats. 2023, Ch. 790, Sec. 100. (SB 326) Effective April 17, 2024. Approved in Proposition 1 at the March 5, 2024, election. Operative July 1, 2026, by its own provisions.)

Section § 5893

This law explains what happens to extra money in California’s Behavioral Health Services Fund. If more money is available than needed in a given year, the leftover will be saved and used the following year. Additionally, any money in this fund will be invested like other state funds, and the fund will grow through earnings from these investments. The rules in this section are set to start on July 1, 2026, if voters approve certain changes to the Mental Health Services Act in the March 2024 election.

(a) In a year that the funds available exceed the amount allocated to counties, the excess funds shall be carried forward to the next fiscal year to be available for distribution to counties in accordance with Section 5892 in that fiscal year.

(b)

(1) All funds deposited into the Behavioral Health Services Fund shall be invested in the same manner that other state funds are invested.

(2) The fund shall be increased by its share of the amount earned on investments.

(c) This section shall become operative on July 1, 2026, if amendments to the Mental Health Services Act are approved by voters at the March 5, 2024, statewide primary election.

Behavioral Health Services Fund excess funds allocation investment of funds fund earnings Mental Health Services Act amendments fund distribution fiscal year carry forward investment returns statewide primary election voter approval operative date July 2026 2024 election changes

(Repealed (in Sec. 101) and added by Stats. 2023, Ch. 790, Sec. 102. (SB 326) Effective October 12, 2023. Operative July 1, 2026, by its own provisions.)

Section § 5894

This law says that if certain parts of the division related to mental health services are changed by new legislation, the funding from this measure will follow those changes. However, it ensures that the groups of people who are eligible for the services won't be reduced because of this restructuring.

In the event that Part 3 (commencing with Section 5800) or Part 4 (commencing with Section 5850) of this division, are restructured by legislation signed into law before the adoption of this measure, the funding provided by this measure shall be distributed in accordance with such legislation; provided, however, that nothing herein shall be construed to reduce the categories of persons entitled to receive services.

mental health services funding allocation legislation changes service eligibility restructured law service categories distribution of funds measure adoption rights to services service recipients legislative impact eligibility protection mental health programs restructuring impact

(Added November 2, 2004, by initiative Proposition 63, Sec. 15. Operative January 1, 2005, pursuant to Sec. 16 of Prop. 63.)

Section § 5895

This law section explains that if certain parts of the mental health legislation in California are either repealed or changed in such a way that the original goals of the act cannot be met, then the money in the Behavioral Health Services Fund should be managed according to the rules that were effective as of January 1, 2004.

Additionally, if voters approve changes to the Mental Health Services Act in the March 2024 election, this specific rule will stop being effective on July 1, 2026, and will be officially removed by January 1, 2027.

(a) If any provisions of Part 3 (commencing with Section 5800) or Part 4 (commencing with Section 5850) are repealed or modified so the purposes of this act cannot be accomplished, the funds in the Behavioral Health Services Fund shall be administered in accordance with those sections as they read on January 1, 2004.

(b) If amendments to the Mental Health Services Act are approved by the voters at the March 5, 2024, statewide primary election, this section shall become inoperative on July 1, 2026, and as of January 1, 2027, is repealed.

Behavioral Health Services Fund Mental Health Services Act repealed provisions modified legislation January 1 2004 amendments March 2024 election July 1 2026 January 1 2027 mental health funding voter approval statewide primary election operative dates fund administration California mental health law

(Amended (as amended by Stats. 2023, Ch. 790, Sec. 103) by Stats. 2024, Ch. 40, Sec. 51. (SB 159) Effective June 29, 2024. Operative January 1, 2025, pursuant to Sec. 85 of Stats. 2024, Ch. 40. Inoperative July 1, 2026, by its own provisions. Repealed as of January 1, 2027, by its own provisions.)

Section § 5897

This California law allows the State Department of Health Care Services to manage certain mental health programs through contracts with counties. It enables counties to partner and jointly handle these programs, establishing clear responsibilities and financial liabilities. These contracts may be exclusive and cover specific geographic areas. The department will review county performance contracts every three years, checking for compliance with specific sections. If a county's behavioral health department falls short, a corrective plan must be submitted, and the state may withhold funds if needed. Contracts for health programs can be awarded similarly to others under a specific section, and the law specifies funding allocations for Medi-Cal services. This will take effect on July 1, 2026, pending voter approval of amendments in the March 2024 election.

(a)

(1) Notwithstanding any other state law, the State Department of Health Care Services shall implement the programs and services specified in subdivision (a) of Section 5892, and related activities, through contracts with a county or counties acting jointly.

(2) A contract may be exclusive and may be awarded on a geographic basis.

(3) For purposes of this section, a “county” includes a city receiving funds pursuant to Section 5701.5.

(b)

(1) Two or more counties acting jointly may agree to deliver or subcontract for the delivery of programs and services pursuant to subdivision (a) of Section 5892.

(2) The agreement may encompass all or part of these programs and services.

(3) An agreement between counties shall delineate each county’s responsibilities and fiscal liability.

(c) The department shall contract with counties, or counties acting jointly pursuant to subdivision (a), through the county performance contract as specified in Chapter 2 (commencing with Section 5650) of Part 2.

(d)

(1) The department shall conduct program reviews of performance contracts to determine compliance, including compliance with Sections 5963.02 and 5963.04.

(2) Each county performance contract shall be reviewed at least once every three years, subject to available funding for this purpose.

(e)

(1) If a county behavioral health department is not in compliance with its performance contract, the department may request a plan of correction with a specific timeline to achieve improvements and take administrative action, including, but not limited to, the temporary withholding of funds and the imposition of monetary sanctions pursuant to Section 5963.04.

(2) The department shall post plans of correction requested and the related findings on its internet website.

(f) Contracts awarded by the State Department of Health Care Services, the State Department of Public Health, the California Behavioral Health Planning Council, the Department of Health Care Access and Information, the Behavioral Health Services Oversight and Accountability Commission and the California Health and Human Services Agency to implement programs and services set forth in subdivision (a) of Section 5892 and programs pursuant to Part 3.1 (commencing with Section 5820) may be awarded in the same manner that contracts are awarded pursuant to Section 5814, and the provisions of subdivisions (g) and (h) of Section 5814 shall apply to those contracts.

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

(h) This section shall become operative on July 1, 2026, if amendments to the Mental Health Services Act are approved by voters at the March 5, 2024, statewide primary election.

mental health programs county contracts program compliance corrective action fund withholding joint county agreements geographic contracts county fiscal liability performance contracts Medi-Cal services voter approval program funding contract reviews amendments approval

(Repealed (in Sec. 104) and added by Stats. 2023, Ch. 790, Sec. 105. (SB 326) Effective April 17, 2024. Approved in Proposition 1 at the March 5, 2024, election. Operative July 1, 2026, by its own provisions.)

Section § 5898

This section mandates the State Department of Health Care Services to create regulations necessary to implement the act. These regulations should encourage public participation and comments to the fullest extent possible. Additionally, this section will only take effect on January 1, 2025, if voters approve changes to the Mental Health Services Act in the statewide primary election on March 5, 2024.

(a)

(1) The State Department of Health Care Services shall develop regulations, as necessary, to implement this act.

(2) Regulations adopted pursuant to this section shall be developed with the maximum feasible opportunity for public participation and comments.

(b) This section shall become operative on January 1, 2025, if amendments to the Mental Health Services Act are approved by the voters at the March 5, 2024, statewide primary election.

State Department of Health Care Services regulations development public participation public comments Mental Health Services Act voter approval statewide primary election operative date January 1 2025 March 5 2024

(Repealed (in Sec. 106) and added by Stats. 2023, Ch. 790, Sec. 107. (SB 326) Effective April 17, 2024. Approved in Proposition 1 at the March 5, 2024, election. Operative January 1, 2025, by its own provisions.)

Section § 5899

This law requires the California Department of Health Care Services to work with specific commissions and associations to develop guidelines for counties on how to report mental health funding. Counties must certify these reports and use standard accounting practices, except for certain projects which use a different method. They must submit these reports electronically, and they are posted online. The guidelines must be updated regularly for accuracy. These reports help show how mental health funds are spent, identify leftover funds, and determine funds that need to be returned. If a county fails to submit their report, funds might be withheld. Counties must also report spending on veteran mental health services, and annual reports will detail unspent funds. If voters change the Mental Health Services Act in 2024, this law ends in 2027.

(a)

(1) The State Department of Health Care Services, in consultation with the Mental Health Services Oversight and Accountability Commission and the County Behavioral Health Directors Association of California, shall develop and administer instructions for the Annual Mental Health Services Act Revenue and Expenditure Report.

(2) The instructions shall include a requirement that the county certify the accuracy of this report.

(3) With the exception of expenditures and receipts related to the capital facilities and technology needs component described in paragraph (6) of subdivision (d), each county shall adhere to uniform accounting standards and procedures that conform to the Generally Accepted Accounting Principles prescribed by the Controller pursuant to Section 30200 of the Government Code when accounting for receipts and expenditures of Mental Health Services Act (MHSA) funds in preparing the report.

(4) Counties shall report receipts and expenditures related to capital facilities and technology needs using the cash basis of accounting, which recognizes expenditures at the time payment is made.

(5) Each county shall electronically submit the report to the department and to the Mental Health Services Oversight and Accountability Commission.

(6) The department and the commission shall annually post each county’s report in a text-searchable format on its internet website in a timely manner.

(b) The department, in consultation with the commission and the County Behavioral Health Directors Association of California, shall revise the instructions described in subdivision (a) by July 1, 2017, and as needed thereafter, to improve the timely and accurate submission of county revenue and expenditure data.

(1) Identify the expenditures of MHSA funds that were distributed to each county.

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

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

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

(d) This report is intended to provide information that allows for the evaluation of all of the following:

(1) Children’s systems of care.

(2) Prevention and early intervention strategies.

(3) Innovative projects.

(4) Workforce education and training.

(5) Adults and older adults systems of care.

(6) Capital facilities and technology needs.

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

(f) A county shall also report the amount of MHSA funds that were spent on mental health services for veterans.

(g) By October 1, 2018, and by October 1 of each subsequent year, the department shall, in consultation with counties, publish on its internet website a report detailing funds subject to reversion by county and by originally allocated purpose. The report also shall include the date on which the funds will revert to the Behavioral Health Services Fund.

(h) If amendments to the Mental Health Services Act are approved by the voters at the March 5, 2024, statewide primary election, this section shall become inoperative on July 1, 2026, and as of January 1, 2027, is repealed.

Mental Health Services Act annual revenue report expenditure reporting county certification accounting standards uniform accounting practices capital facilities technology needs cash basis accounting fund distribution unexpended funds interest earned reversion amounts systems of care veteran mental health services

(Amended (as amended by Stats. 2023, Ch. 790, Sec. 108) by Stats. 2024, Ch. 40, Sec. 52. (SB 159) Effective June 29, 2024. Operative January 1, 2025, pursuant to Sec. 85 of Stats. 2024, Ch. 40. Inoperative July 1, 2026, by its own provisions. Repealed as of January 1, 2027, by its own provisions.)

Section § 5899.1

This law states that starting July 1, 2017, any mental health funds that were not used as planned must be redirected to other counties to support the original purposes they were intended for. The state department can provide guidance on this process through letters or instructions, even without formal regulations, until new rules are set up or until July 1, 2019. However, they must allow the public to participate and comment before issuing these instructions.

(a) On or after July 1, 2017, funds subject to reversion pursuant to subdivision (h) of Section 5892 shall be reallocated to other counties for the purposes for which the unspent funds were initially allocated to the original county.

(b) Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department, without taking any further regulatory action, may implement, interpret, or make specific this section, Section 5892.1, and subdivision (h) of Section 5892, by means of all-county letters or other similar instructions, until applicable regulations are adopted in accordance with Section 5898, or until July 1, 2019, whichever occurs first. The all-county letters or other similar instructions shall be issued only after the department provides the opportunity for public participation and comments.

mental health funds fund reallocation unspent funds county reallocation public participation guidance letters regulatory action implementation without regulations public comments July 1 2017 July 1 2019 funds reversion Section 5892(h)

(Added by Stats. 2017, Ch. 38, Sec. 16. (AB 114) Effective July 10, 2017.)

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Community Mental Health Services

Part 4.5MENTAL HEALTH SERVICES FUND