A BILL TO BE ENTITLED
AN ACT to build community infrastructure for mental health, developmental disabilities, and substance abuse services and to appropriate funds as recommended by the joint legislative oversight committee ON MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES.
The General Assembly of North Carolina enacts:

PART i. Increase availability of substance abuse treatment.

START‑UP FUNDING FOR SUBSTANCE ABUSE TREATMENT PROGRAMS.
SECTION 1.1.  There is appropriated from the General Fund to the Department of Health and Human Services (DHHS), Division of Mental Health, Developmental Disabilities, and Substance Abuse Services (DMH), the sum of ten million dollars ($10,000,000) for the 2007‑2008 fiscal year and the sum of five million ($5,000,000) for the 2008‑2009 fiscal year.  DHHS shall distribute the funds no later than 30 days after the enactment of the Current Operations and Capital Appropriations Act for the 2007‑2009 biennium.  
Funds appropriated in this section shall be allocated to local management entities (LMEs) such that each LME receives a percentage of the total allocation that is equal to that local management entity's percentage of the State's total population that is below the federal poverty level.  LMEs shall use the funds for operational start‑up, capital, or subsidies related to the creation of both residential and outpatient substance abuse treatment programs.  Each LME shall determine the type of substance abuse treatment programs that are needed in that LME's catchment area, issue requests for proposals for the creation of those programs, and award funds for appropriate proposals.  LMEs may work together to identify regional needs and may also issue combined requests for proposals to create regional substance abuse treatment programs.  LMEs shall distribute funds appropriated under this section no later than six months after the funds are distributed to LMEs by DHHS, and in no event later than June 30, 2008.
SECTION 1.2.  There is appropriated from the General Fund to the North Carolina Area Health Education Centers (AHEC) the sum of five hundred thousand dollars ($500,000) for the 2007‑2008 fiscal year and the sum of five hundred thousand dollars ($500,000) for the 2008‑2009 fiscal year.  AHEC shall use the funds to provide technical assistance to LMEs in the identification of substance abuse treatment program needs in the LMEs' catchment areas, the development of requests for proposals, and oversight and accountability for the implementation of substance abuse treatment programs.  AHEC shall make recommendations to the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services by February 1, 2009, and October 1, 2010, regarding whether there is a need for additional funds for substance abuse start‑up and services.

SUBSTANCE ABUSE TREATMENT SERVICES AND PREVENTION.
SECTION 1.3.  G.S. 122C‑147.1 reads as rewritten:
"§ 122C‑147.1.  Appropriations and allocations.
(a)	Except as provided in subsection (b) of this section, funds for services delivered to mentally ill and developmentally disabled clients shall be appropriated by the General Assembly in broad age/disability categories. Funds for services delivered to substance abuse clients shall be appropriated by the General Assembly in a broad disability category. The Secretary shall allocate and account for funds in broad disability or age/disability categories so that the LME may, with flexibility, earn funds in response to local needs that are identified within the payment policy developed in accordance with G.S. 122C‑143.1(b).
(b)	When the General Assembly determines that it is necessary to appropriate funds for a more specific purpose than the broad disability or age/disability category, the Secretary shall determine whether expenditure accounting, special reporting within earning from a broad fund, the Memorandum of Agreement, or some other mechanism allows the best accounting for the funds.
(c)	Funds that have been appropriated by the General Assembly for a more specific purpose than specified in subsection (a) of this section shall be converted to a broad disability or age/disability category at the beginning of the second biennium following the appropriation, unless otherwise acted upon by the General Assembly.
(d)	The Secretary shall allocate funds to LMEs as follows:
(1)	To be earned in a purchase of service basis, at negotiated reimbursement rates, for services that are included in the payment policy and delivered to mentally ill and developmentally disabled clients and for services that are included in the payment policy to other  recipients.
(2)	To be paid under a grant on the basis of agreed‑upon expenditures.
(d1)	The Secretary shall allocate funds to LMEs for services to substance abuse clients. Notwithstanding subsection (d) of this section, each LME shall determine whether to earn the funds for services to substance abuse clients in a purchase for service basis, under a grant, or some combination of the two.
(d2)	No later than November 1, 2007, the Secretary shall develop and implement a system that LMEs shall use to track the funds each LME expends on a grant basis for each disability and for each age/disability category and that identifies the specific services purchased with the funds.
(e)	After the close of a fiscal year, final payments of funds shall be made as follows:
(1)	Under the purchase of service basis, on the earnings of the LME for the delivery to individuals within each age/disability group, of any services that are consistent with the payment policy established in G.S. 122C‑143.1(b), up to the final allocation amount.
(2)	When awarded on an expenditure basis, on allowable actual expenditures, up to the final allocation amount.
(e1)	Under rules adopted by the Secretary, final payments made under subsection (e) of this section shall be adjusted on the basis of the audit required in G.S. 122C‑144.1(d)."
SECTION 1.4.  Consistent with G.S. 122C‑2, the General Assembly strongly encourages LMEs to use a portion of the funds appropriated for substance abuse treatment services to support prevention and education activities.
SECTION 1.5.  An LME may use up to one percent (1%) of funds allocated to it for substance abuse treatment services to provide nominal incentives for consumers who achieve specified treatment benchmarks.  

DRUG TREATMENT COURTS.
SECTION 1.6.  There is appropriated from the General Fund to the Department of Health and Human Services (DHHS), Division of Mental Health, Developmental Disabilities, and Substance Abuse Services the sum of four million dollars ($4,000,000) for the 2007‑2008 fiscal year and the sum of four million dollars ($4,000,000) for the 2008‑2009 fiscal year.  The funds shall be used to provide substance abuse treatment services and case management for existing pre‑ and post‑plea Adult Drug Treatment Courts, DWI Treatment Courts, Youth Drug Treatment Courts, Mental Health Treatment Courts, and Family Drug Treatment Courts.

PART II. ADDITIONAL HOUSING ASSISTANCE.

INDEPENDENT‑ AND SUPPORTIVE‑LIVING APARTMENTS INITIATIVE.
SECTION 2.1.  There is appropriated from the General Fund to the Department of Health and Human Services (DHHS) the sum of five million two hundred fifty thousand dollars ($5,250,000) for the 2007‑2008 fiscal year and the sum of five million two hundred fifty thousand dollars ($5,250,000) for the 2008‑2009 fiscal year.  The funds shall be used to pay for operating cost subsidies for approximately thousand 1,000 independent‑ and supportive‑living apartments for individuals with mental health, developmental, or substance abuse disabilities.  DHHS shall maximize the number of subsidies that can be paid for with these funds by giving first priority to North Carolina Housing Finance Agency‑financed apartments, giving second priority to other publicly subsidized apartments, and third priority to market‑rate apartments.  Up to two hundred fifty thousand dollars ($250,000) may be used for administration of the subsidies.
SECTION 2.2.  There is appropriated from the General Fund to the North Carolina Housing Trust Fund the sum of ten million dollars ($10,000,000) for the 2007‑2008 fiscal year and the sum of ten million dollars ($10,000,000) for the 2008‑2009 fiscal year.  The funds shall be used to finance independent‑ and supportive‑living apartments for individuals with mental health, developmental, or substance abuse disabilities.  The funds shall be used to continue and expand the Housing 400 Initiative created in 2006.
SECTION 2.3.  The independent and supportive living apartments for persons with disabilities constructed from funds appropriated in this act for that purpose shall be affordable to persons with incomes at or below the Supplemental Security Income (SSI) level.
SECTION 2.4.  The Department of Health and Human Services and the North Carolina Housing Finance Agency shall work together to develop a plan for the most efficient and effective use of State resources in the financing and construction of additional independent‑ and supportive‑living apartments for individuals with mental health, developmental, or substance abuse disabilities.  This plan shall address gaps in the housing continuum identified by the study that DHHS will conduct during fiscal year 2006‑2007 and fiscal year 2007‑2008.  DHHS and NCHFA shall report this plan and also the progress of the Housing 400 Initiative to the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services by March 1, 2008.

SUPPORT PROPOSALS REGARDING MENTALLY ILL IN ADULT CARE HOMES.
SECTION 2.5.  The Department of Health and Human Services shall develop a "Transitional Residential Treatment Program" service definition to provide 24‑hour residential treatment and rehabilitation for adults who have a pattern of difficult behaviors related to mental illness and which exceed the capabilities of traditional community residential settings.  DHHS shall submit the new service definition to the Centers for Medicare and Medicaid for approval no later than 90 days after the enactment of the Current Operations and Capital Appropriations Act for the 2007‑2009 biennium.
SECTION 2.6.  The joint ad hoc subcommittee regarding the mentally ill in adult care homes convened by the Joint Legislative Oversight Committee on Mental Health, Developmental Disabilities, and Substance Abuse Services and the North Carolina Commission on Aging may continue to study and identify rules and laws that are necessary to regulate facilities that provide housing for adults with mental illness in the same location with adults without mental illness. 
SECTION 2.7.  The Department of Health and Human Services shall complete the development of a Uniform Screening Tool (UST) to be used by LMEs to determine the mental health of any individual admitted to any long-term care facility within an LME's catchment area.  The UST shall be available for use no later than 90 days after the enactment of the Current Operations and Capital Appropriations Act for the 2007‑2009 biennium.
SECTION 2.8.  The Department of Health and Human Services shall make available placements for at least 2,000 adults through the State/County Special Assistance In‑Home Program.  LMEs shall be responsible for the delivery of case management for recipients who have a mental illness, developmental disability, or substance abuse disorder and are within the target populations for those disabilities.

PART III. CRISIS AND ACUTE CARE SERVICES.

EXPAND CRISIS SERVICES
SECTION 3.1. There is appropriated from the General Fund to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of ten million dollars ($10,000,000) for the 2007‑2008 fiscal year and the sum of five million dollars ($5,000,000) for the 2008‑2009 fiscal year.  LMEs shall use these funds to continue to implement the crisis plans developed under S.L. 2006‑66, Section 10.26.  DHHS may use up to two hundred fifty thousand dollars ($250,000) of the funds appropriated under this section to extend its contract with the crisis services consultant authorized under Section 10.26(b) of S.L. 2006‑66.
SECTION 3.2.  S.L. 2006‑66, Section 10.26(d) reads as rewritten:
"SECTION 10.26.(d)  With the assistance of the consultant, the LMEs within a crisis region shall work together to identify gaps in their ability to provide a continuum of crisis services for all consumers and use the funds allocated to them to develop and implement a plan to address those needs. At a minimum, the plan must address the development over time of the following components:  24‑hour crisis telephone lines, walk‑in crisis services, mobile crisis outreach, crisis respite/residential services, crisis stabilization units, 24‑hour beds, facility‑based crisis, in‑patient crisis, detox, and transportation. Options for voluntary admissions to a secured facility must include at least one service appropriate to address the mental health, developmental disability, and substance abuse needs of adults, and the mental health, developmental disability, and substance abuse needs of children. Options for involuntary commitment to a secured facility must include at least one option in addition to admission to a State facility.
If all LMEs in a crisis region determine that a facility‑based crisis center is needed and sustainable on a long‑term basis, the crisis region shall first attempt to secure those services through a community hospital or other community facility. If all the LMEs in the crisis region determine the region's crisis needs are being met, the LMEs may use the funds to meet local crisis service needs."
SECTION 3.3.  There is appropriated from the General Fund to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of fifteen million dollars ($15,000,000) for the 2007‑2008 fiscal year and the sum of twenty million dollars ($20,000,000) for the 2008‑2009 fiscal year to be used to provide crisis services.  
Funds appropriated in this section shall be allocated to local management entities (LMEs) such that each LME receives a percentage of the total allocation that is equal to that LME's percentage of the State's total population that is below the federal poverty level.  DHHS shall distribute the funds no later than 30 days after the enactment of the Current Operations and Capital Appropriations Act for the 2007‑2009 biennium.  LMEs shall work with sheriffs and county public health agencies to serve individuals who are incarcerated or being held in county jails and who are in need of crisis services.
SECTION 3.4.  G.S. 122C‑147.1, as amended by Section 1.3 of this act, reads as rewritten:
"§ 122C‑147.1.  Appropriations and allocations.
(a)	Except as provided in subsection (b) of this section, funds for services delivered to mentally ill and developmentally disabled clients shall be appropriated by the General Assembly in broad age/disability categories. Funds for services delivered to substance abuse clients shall be appropriated by the General Assembly in a broad disability category. The Secretary shall allocate and account for funds in broad disability or age/disability categories so that the LME may, with flexibility, earn funds in response to local needs that are identified within the payment policy developed in accordance with G.S. 122C‑143.1(b).
(b)	When the General Assembly determines that it is necessary to appropriate funds for a more specific purpose than the broad disability or age/disability category, the Secretary shall determine whether expenditure accounting, special reporting within earning from a broad fund, the Memorandum of Agreement, or some other mechanism allows the best accounting for the funds.
(b1)	Notwithstanding subsection (b) of this section, funds appropriated by the General Assembly for crisis services shall not be allocated in broad disability or age/disability categories.
(c)	Funds that have been appropriated by the General Assembly for a more specific purpose than specified in subsection (a) of this section shall be converted to a broad disability or age/disability category at the beginning of the second biennium following the appropriation, unless otherwise acted upon by the General Assembly. This subsection shall not apply to funds appropriated by the General Assembly for crisis services.
(d)	The Secretary shall allocate funds to LMEs as follows:
(1)	To be earned in a purchase of service basis, at negotiated reimbursement rates, for services that are included in the payment policy and delivered to mentally ill and developmentally disabled clients and for services that are included in the payment policy to other  recipients.
(2)	To be paid under a grant on the basis of agreed‑upon expenditures.
(d1)	The Secretary shall allocate funds to LMEs for crisis services and services to substance abuse clients. Notwithstanding subsections (b) and (d) of this section, each LME shall determine whether to earn the funds for crisis services and funds for services to substance abuse clients in a purchase for service basis, under a grant, or some combination of the two.
(d2)	No later than November 1, 2007, the Secretary shall develop and implement a system that LMEs shall use to track the funds each LME expends on a grant basis for each disability and for each age/disability category and that identifies the specific services purchased with the funds.
(e)	After the close of a fiscal year, final payments of funds shall be made as follows:
(1)	Under the purchase of service basis, on the earnings of the LME for the delivery to individuals within each age/disability group, of any services that are consistent with the payment policy established in G.S. 122C‑143.1(b), up to the final allocation amount.
(2)	When awarded on an expenditure basis, on allowable actual expenditures, up to the final allocation amount.
(e1)	Under rules adopted by the Secretary, final payments made under subsection (e) of this section shall be adjusted on the basis of the audit required in G.S. 122C‑144.1(d)."
SECTION 3.5.  The Department of Health and Human Services shall develop a system for reporting to LMEs information regarding all visits to community hospital emergency departments by individuals who are in crisis due to a mental illness, a developmental disability, or a substance abuse disorder.  The system shall be implemented no later than 90 days after the enactment of the Current Operations and Capital Appropriations Act for the 2007‑2009 biennium.

STATE PSYCHIATRIC HOSPITAL – UTILIZATION PILOT.
SECTION 3.6.  In addition to the crisis service funds appropriated under Section 3.3 of this act, there is appropriated from the General Fund to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of five million dollars ($5,000,000) for the 2007‑2008 fiscal year and the sum of five million dollars ($5,000,000) for the 2008‑2009 fiscal year to be used by selected LMEs to provide crisis services as part of a pilot program to increase community resources for persons with mental illness and to reduce acute admissions to State psychiatric hospitals.  LMEs that have at least one of all of the following shall be eligible to use the funds appropriated under this section:  mobile crisis team, facility‑based crisis unit, walk‑in facility, and a contract with a community hospital for inpatient beds for involuntary commitments.  An LME that participates in this pilot program during the 2007‑2008 fiscal year shall be eligible to participate in the program during the 2008‑2009 fiscal year if the LME can document a reduction in the involuntary commitment admissions from that LME's catchment area to the State psychiatric hospital that serves that catchment area during the 2007‑2008 fiscal year.
The budgets for the State psychiatric hospitals shall not be reduced during the 2007‑2008 fiscal year as a result of this pilot. However, those budgets shall be adjusted in following years to reflect the previous year's use by the LMEs participating in the pilot program.

PART IV. ASSISTANCE TO LAW ENFORCEMENT.

SERVICES TO PERSONS IN JAIL.
SECTION 4.1. Local management entities shall work with county public health departments and county sheriffs to provide medical assessments and medication, if appropriate, for inmates housed in county jails who are suicidal, hallucinating, or delusional. LMEs shall also examine ways to provide additional treatment to persons who are determined to be psychotic, severely depressed, suicidal, or who have substance abuse disorders. LMEs, county public health departments and county sheriffs shall work together to develop all of the following:
(1)	A standardized evidence‑based screening instrument to be used when offenders are booked.
(2)	A designated LME employee who is responsible for screening the daily jail booking log for known mental health consumers.
(3)	Protocols for effective communication between the LME and the jail staff including collaborative development of medication management protocols between the jail staff and the mental health providers.
(4)	Training to help detention officers recognize signals of mental illness.
There is appropriated from the General Fund to the Department of Health and Human Services (DHHS), Division of Mental Health, Developmental Disabilities, and Substance Abuse Services (DMH), the sum of one million dollars ($1,000,000) for the 2007‑2008 fiscal year and the sum of one million dollars ($1,000,000) for the 2008‑2009 fiscal year. Funds appropriated in this section shall be allocated to local management entities (LMEs) such that each LME receives a percentage of the total allocation that is equal to that local management entity's percentage of the State's total population that is below the federal poverty level. LMEs shall use the funds to provide the assistance required under this section.
SECTION 4.2.  There is appropriated from the General Fund to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of nine hundred thousand dollars ($900,000) for the 2007‑2008 fiscal year and the sum of one million eight hundred thousand dollars ($1,800,000) for the 2008‑2009 fiscal year.  The funds shall be used by LMEs to expand post‑arrest jail diversion programs.  The funds would expand the program by15 programs each year.

CRISIS INTERVENTION TEAMS.
SECTION 4.3.  There is appropriated from the General Fund to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of one hundred thousand dollars ($100,000) for the 2007‑2008 fiscal year and the sum of one hundred thousand dollars ($100,000) for the 2008‑2009 fiscal year.  The funds shall be used by LMEs to develop Crisis Intervention Teams (CITs) statewide.  The Division shall develop the ability to provide training within North Carolina.

POST‑CONVICTION SUBSTANCE ABUSE TREATMENT PROGRAMS.
SECTION 4.4.  There is appropriated from the General Fund to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of four million eighty thousand dollars ($4,080,000) for the 2007‑2008 fiscal year and the sum of eight million one hundred sixty thousand dollars ($8,160,000) for the 2008‑2009 fiscal year.  The funds shall be used to increase the number of TASC (Treatment Alternative for Safer Communities) case managers by 68 per year.
SECTION 4.5.  There is appropriated from the General Fund to the Department of Correction the sum of one million four hundred twelve thousand forty‑eight dollars ($1,412,048) for the 2007‑2008 fiscal year, and the sum of one million one hundred sixty‑seven thousand six hundred forty‑seven dollars ($1,167,647) for the 2008‑2009 fiscal year.  These funds shall be used to establish a community‑based residential substance abuse treatment facility for female offenders on probation and female DWI offenders paroled to treatment.  The facility shall provide thirty 90‑day therapeutic beds and twenty 28‑day short-term treatment beds.

PART V. USE OF MENTAL HEALTH TRUST FUNDS.

SECTION 5.1.  Funds remaining in the Trust Fund for Mental Health, Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs that are not obligated as of February 1, 2007, may only be obligated to provide community‑based programs.  Any funds not obligated as of February 1, 2007, and not subsequently obligated to provide community‑based programs shall be deemed to be unencumbered and shall be allocated to local management entities (LMEs) such that each LME receives a percentage of the total allocation that is equal to that local management entity's percentage of the State's total population that is below the federal poverty level.  DHHS shall distribute the funds no later than 30 days after the enactment of the Current Operations and Capital Appropriations Act for the 2007‑2009 biennium.  
SECTION 5.2.  Effective July 1, 2007, G.S. 143C‑9‑2 reads as rewritten:
"§ 143C‑9‑2.  Trust Fund for Mental Health, Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs.
(a)	The Trust Fund for Mental Health, Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs is established as an interest‑bearing, nonreverting special trust fund in the Office of State Budget and Management. Moneys in the Trust Fund shall be held in trust and used solely to increase community‑based services that meet the mental health, developmental disabilities, and substance abuse services needs of the State. The Trust Fund shall be used to supplement and not to supplant or replace existing State and local funding available to meet the mental health, developmental disabilities, and substance abuse services needs of the State.
The State Treasurer shall hold the Trust Fund separate and apart from all other moneys, funds, and accounts. The State Treasurer shall be the custodian of the Trust Fund and shall invest its assets in accordance with G.S. 147‑69.2 and G.S. 147‑69.3. Investment earnings credited to the assets of the Trust Fund shall become part of the Trust Fund. Any balance remaining in the Trust Fund at the end of any fiscal year shall be carried forward in the Trust Fund for the next succeeding fiscal year. 
Moneys in the Trust Fund shall be expended only in accordance with subsection (b) of this section and in accordance with limitations and directions enacted by the General Assembly.
(b)	Moneys in the Trust Fund for Mental Health, Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs shall be used only to:
(1)	Provide start‑up funds and operating support for programs and services that provide more appropriate and cost‑effective community treatment alternatives for individuals currently residing in the State's mental health, developmental disabilities, and substance abuse services institutions.
(2)	Facilitate the State's compliance with the United States Supreme Court decision in Olmstead v. L.C. and E.W.
(3)	Expand and enhance mental health, developmental disabilities, and substance abuse treatment and prevention services in the community to remove waiting lists and provide appropriate and safe services for clients.
(4)	Provide bridge funding to maintain appropriate client services during transitional periods as a result of facility closings, including departmental restructuring of services.
	(c)	Notwithstanding G.S. 143C‑1‑2, any nonrecurring savings in State appropriations realized from the closure of any State psychiatric hospitals that are in excess of the cost of operating and maintaining a new State psychiatric hospital shall not revert to the General Fund but shall be placed in the Trust Fund and shall be used for the purposes authorized in this section. Notwithstanding G.S. 143C‑1‑2, recurring savings realized from the closure of any State psychiatric hospitals shall not revert to the General Fund but shall be credited to the Department of Health and Human Services to be used only for the purposes of subsections (b)(1), (b)(2), and (b)(3) of this section.
(d)	Beginning July 1, 2007, the Secretary of the Department of Health and Human Services shall report annually to the Fiscal Research Division on the expenditures made during the preceding fiscal year from the Trust Fund. The report shall identify each expenditure by recipient and purpose and shall indicate the authority under subsection (b) of this section for the expenditure."

PART VI. STRENGTHEN THE SERVICES NETWORK.

SECTION 6.1.  The Department of Health and Human Services shall designate four additional local management entities to receive all State allocations through single stream funding.  If DHHS has not made the designations by June 1, 2007, then the General Assembly shall make the designations.
SECTION 6.2.  No later than June 1, 2007, the Department of Health and Human Services shall commend the process for three additional local management entities to apply for a 1915(b) Medicaid waiver.
SECTION 6.3.  The Joint Legislative Oversight Committee for Mental Health, Developmental Disabilities, and Substance Abuse Services shall study the effectiveness of the 1915(b) Medicaid waiver and of those LMEs operating under a waiver.

PART VII. FILLING SERVICE GAPS.

ADDITIONAL MENTAL HEALTH SERVICES.
SECTION 7.1.  There is appropriated from the General Fund to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of thirty million dollars ($30,000,000) for the 2007‑2008 fiscal year and the sum of thirty million dollars ($30,000,000) for the 2008‑2009 fiscal year.  The funds shall be used to purchase mental health services.  Funds appropriated in this section shall be allocated to local management entities (LMEs) such that each LME receives a percentage of the total allocation that is equal to that local management entity's percentage of the State's total population that is below the federal poverty level.  

ADDITIONAL SERVICES FOR THE DEVELOPMENTALLY DISABLED.
SECTION 7.2.  There is appropriated from the General Fund to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of nine million nine hundred thousand dollars ($9,900,000) for the 2007‑2008 fiscal year and the sum of nine million nine hundred thousand dollars ($9,900,000) for the 2008‑2009 fiscal year.  The funds shall be used to increase the number of individuals who can participate in the Community Alternatives Program for Mental Retardation/Developmental Disabilities (CAP MR/DD).
SECTION 7.3.  There is appropriated from the General Fund to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of seven million dollars ($7,000,000) for the 2007‑2008 fiscal year and the sum of seven million dollars ($7,000,000) for the 2008‑2009 fiscal year.  The funds shall be used for start‑up and ongoing support of Supported Employment Long‑Term Support services.
SECTION 7.4.  Beginning July 1, 2007, Developmental Therapies services shall only be available to individuals who were receiving that service on June 30, 2007.  Developmental Therapy funds that are not utilized shall be made available to LMEs to use for CAP MR/DD slots or for other Supported Employment Long‑Term Support services for the developmentally disabled.  An LME that receives all its State appropriated allocations through a grant basis shall also receive its Developmental Therapies allocation on the same basis.  
The Department of Health and Human Services shall develop a new, Medicaid reimbursable service for submission to the Center for Medicare and Medicaid Services to replace Developmental Therapies no later than November 1, 2007.
SECTION 7.5.  The Department of Health and Human Services shall develop and apply to the Centers for Medicare and Medicaid Services for additional home and community‑based waivers for persons with developmental disabilities.  In conjunction with the existing CAP MR/DD waiver, the new waivers will create a tiered system of services.

COMMUNITY SUPPORT SERVICES/ TIERED RATE STRUCTURE.
SECTION 7.6.  The Department of Health and Human Services shall establish at least three rate tiers for the service of Community Supports.  The rates shall be based upon the level of qualifications of the individuals delivering the service and shall include a professional‑level case management tier, a professional‑level skill building tier, and a paraprofessional‑level tier.

PART VIII. LME ADMINISTRATIVE FUNDING.

SECTION 8.1.  There is appropriated from the General Fund to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of nineteen million two hundred thousand dollars ($19,200,000) for the 2007‑2008 fiscal year and the sum of nineteen million two hundred thousand dollars ($19,200,000) for the 2008‑2009 fiscal year to be used to fully fund the LME administrative cost model developed by the Division pursuant to S.L. 2006‑66, Section 10.32.(b).  
Based upon information provided to the General Assembly by the Division, it is the understanding of the General Assembly that the funds appropriated under this section in addition to the funds contained in the Governor's Base Budget proposal are sufficient to fully fund the State's contribution for LME systems administration as determined by the LME administrative cost model developed under S.L. 2006‑66, Section 10.32.(b). Notwithstanding any provision in Chapter 143C of the General Statutes or any other provision of law, the Secretary shall not transfer funds from any other fund code or program category within DHHS to fund LME system administration.
SECTION 8.2.  The General Assembly finds that counties have budgeted almost one hundred twenty‑one million dollars ($121,000,000) to LMEs to pay for mental health, developmental disabilities, and substance abuse services.  However, the General Assembly lacks information regarding the specific services that are purchased with those county funds.  The General Assembly also lacks data regarding the incomes of persons receiving mental health, developmental disabilities, and substance abuse services that are paid for by either State or county funds.  This lack of data severely limits the General Assembly's ability to determine the distribution of services that are being paid for with public funds, whether persons who are eligible for Medicaid are being enrolled in that program, and whether expanding the State's Medicaid eligibility criteria would impact a significant number of mental health, developmental disabilities, and substance abuse service consumers.  Therefore, LMEs shall report to the Division all expenditures by the LME for services, start‑up expenses, and capital and operational expenditures, regardless of the source of the funds and regardless of whether the funds were earned on a payment for service or grant basis.  This reporting shall include specific information regarding the expenditure of all funds provided to the LME by the county or counties contained in the LME's catchment area.  To the extent possible, the information shall be submitted through the Integrated Payment and Reimbursement System.  LMEs shall also gather income data for all individuals receiving services.  There is appropriated from the General Fund to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of one million seven hundred thousand dollars ($1,700,000) for the 2007‑2008 fiscal year and the sum of one million seven hundred thousand dollars ($1,700,000) for the 2008‑2009 fiscal year to be used by LMEs to pay for the cost of the additional data reporting required under this section.  

PART IX. EFFECTIVE DATE.

SECTION 9.1.  This act becomes effective July 1, 2007.