California’s Mental Health Transformation Overwhelmingly Passes the Legislature

WHAT YOU NEED TO KNOW: Tonight, the California Legislature approved a cornerstone piece of Governor Newsom’s broader, multi-year behavioral health and homelessness agenda. With the passage of these two bills, California voters will now have the opportunity in March 2024 to vote to modernize our mental health system. These reforms re-focus billions of dollars in existing funds to prioritize Californians with the deepest needs, living in encampments, or suffering the worst substance use issues. And the bond will provide funding to build new behavioral health beds and housing, helping treat more than 100,000 people every year.


SACRAMENTO – Today, the California State Legislature passed two key bills to modernize the State’s behavioral health care system and better address today’s needs. The bills dedicate billions of dollars to new behavioral health housing, create new accountability and transparency, and provide much needed funding for key behavioral health infrastructure and workforce across the state.

WHAT GOVERNOR NEWSOM SAID: “I was deeply moved by the personal stories that so many legislators have shared, showing how many of us have been touched by the mental health crisis. I want to thank the Legislature, Democrats and Republicans alike, who voted in favor of these critical reforms — particularly Senator Eggman, Assemblymembers Irwin and Wood, and a special thank you to Mayor Steinberg. These measures represent a key part of the solution to our homelessness crisis, and improving mental health for kids and families. Now, it will be up to voters to ratify the most significant changes to California’s mental health system in more than 50 years.”

  • Senate Bill 326 (Eggman, D – Stockton) modernizes the Mental Health Services Act to address today’s behavioral health system and demand for services. These reforms expand services to include treatment for those with substance use disorders, prioritize care for those with the most serious mental illness, provide ongoing resources for housing and workforce, and continue investments in prevention, early intervention, and innovative pilot programs. This bill reforms our system of care to prioritize what Californians need today with new and increased accountability for real results for all families and communities.
  • Assembly Bill 531 (Irwin, D – Thousand Oaks) includes a $6.38 billion general obligation bond to build 10,000 new treatment beds and supportive housing units to help serve more than 100,000 people annually. This investment would be the single largest expansion of California’s behavioral health treatment and residential settings in our state’s history – creating new, dedicated housing for people experiencing or at risk of homelessness who have behavioral health needs, with a dedicated investment to serve veterans. These settings will provide Californians experiencing behavioral health conditions a place to stay while safely stabilizing, healing, and receiving ongoing support. Included in the bond is a $1 billion set aside specifically for veterans’ housing.


Today’s final votes come after months of engagement with stakeholders across the state: people and families with lived experience, health care professionals, children and youth groups, veterans organizations, schools and school administrators, businesses, labor leaders, mental health and equity advocates, first responders, and local officials. These conversations strengthened Governor Newsom’s proposed transformation, bringing more organizations on board with supporting this historic and much needed modernization.

WHAT COMES NEXT: Governor Newsom has until October 14th to take action on the legislation. Once signed by the Governor, this modernization of the state’s mental health services system and accompanying bond will head to Californians voters for approval. Senate Bill 326 and Assembly Bill 531 will appear jointly on the March 2024 ballot as Proposition 1.

WHAT SB 326 AUTHOR & SENATE HEALTH COMMITTEE CHAIR EGGMAN SAID: “I am so grateful for the support of my Senate and Assembly colleagues in approving SB 326 and AB 531 and for the leadership and effort Governor Newsom has demonstrated on reforming our behavioral health care system. Together these bills provide a critically needed overhaul to the landmark Mental Health Services Act and infuse desperately needed resources into our behavioral health care continuum. The Governor made a commitment to get this done this year and today the Governor and the Legislature delivered on that commitment.  We have a behavioral health crisis playing out on our streets. With this package, Californians now will have the chance to voice their support for a new direction with a vote for safer communities and a more coherent, functional and humane approach to community-based behavioral health care.”

WHAT AB 531 AUTHOR ASSEMBLYMEMBER IRWIN SAID: “Getting veterans experiencing homelessness off the streets has long been a priority for California, but getting some of our most vulnerable veterans into needed treatment for behavioral health challenges will be transformative. One of the only groups that has seen a recent significant decline in percent of homelessness are veterans, thanks primarily to the very successful Veterans Housing and Homeless Prevention (VHHP) program. By placing a renewed focus on existing programs like Homekey and the Behavioral Health Continuum Infrastructure program, AB 531 and SB 326 will provide housing and treatment services to veterans that focus on serious mental illness and substance use disorders.  Funding and expanding this program is the right thing to do, and I look forward to working with the Governor and veterans organizations to put these important advances before the voters.”

WHAT ASSEMBLY HEALTH COMMITTEE CHAIR WOOD SAID: “Change is hard, but it is inevitable. The behavioral health challenges we faced 20 years ago are not the same ones we face today. Despite the passionate efforts of our dedicated public health, mental health and social services partners – we need to adapt. The tragic reality is playing out every day on our streets, in our schools, in rural communities and our largest cities – out in the open and behind closed doors. Senator Eggman and Governor Newsom have ensured that SB 326 addresses our changing world and pays heed to both the housing and behavioral health services that too many Californians desperately need.”

WHAT ORIGINAL MHSA AUTHOR MAYOR STEINBERG SAID: “Nearly 20 years ago, I authored proposition 63, California’s Mental Health Services Act, to help address the most serious consequences of untreated mental illness. It has done much good but can do so much more. Simply put, more of these precious resources need to be spent on a uniform set of services and strategies that address the immense suffering of people living with mental Illness who are also homeless, in and out of the criminal justice system, and having little or no chance of living full and productive lives. Thank you to Governor Newsom and Senator Eggman for championing these reforms and to the Legislature for acting quickly to place them on the 2024 ballot.”

From a diverse coalition of statewide advocacy groups and business and labor leaders to mayors and county leaders and children’s groups, people and organizations reacted positively to this historic and transformative modernization proposal throughout the legislative process.