(a) Under any service contract entered into under Section 5849.35, in addition to the competitive program established by Section 5849.8, the department may distribute an amount not to exceed two hundred million dollars ($200,000,000) from the fund on an “over-the-counter” basis to finance the construction, rehabilitation, or preservation, and to capitalize operating reserves, of permanent supportive housing for individuals in the target population with a priority for those with mental health supportive needs who are homeless or at risk of chronic homelessness. Funds to be awarded pursuant to this section shall be available to all counties within the state proportionate to the number of homeless persons residing within each county as calculated in Section 5849.6 or in the amount of five hundred thousand dollars ($500,000), whichever is greater. A county receiving these funds shall commit to provide mental health supportive services and coordinate the provision of, or referral to, other services, including, but not limited to, substance abuse treatment services, to the tenants of the supportive housing development for at least 20 years. Services shall be provided onsite at the supportive housing development or at a location otherwise easily accessible to the tenants.

(b) Funds not awarded within 18 months following the first allocation of moneys in accordance with subdivision (d) shall be used for the purposes of the competitive program.

(c) The moneys described in subdivision (a) shall be administered either in accordance with the procedures for awarding funds to local agencies established by the existing Mental Health Services Act housing program administered by the State Department of Health Care Services and the California Housing Finance Agency or alternative procedures developed by the department for distributing these moneys that enhance the efficiency and goals of the distribution program.

(d) The department shall make the first allocation of moneys pursuant to this section as soon as reasonably practical and in any event no later than 150 days after the effective date of a final judgment, with no further opportunity for appeals, in any court proceeding affirming the validity of the contracts authorized by the authority and the department pursuant to Section 5849.35 and any bonds authorized to be issued by the authority pursuant to Section 15463 of the Government Code and any contracts related to those bonds.

(Amended by Stats. 2016, Ch. 322, Sec. 10. (AB 1628) Effective September 13, 2016.)