Mental Health Systems Act Becomes Law

Developments in Mental Health Law, January 1981 | Go to article overview

Mental Health Systems Act Becomes Law


President Carter signed the Mental Health Systems Act, P.L. 96-398, into law October 7, at the Woodburn Center For Community Mental Health in Fairfax, Virginia. Drafted by the Administration to implement the 1978 Report of the President's Commission on Mental Health, the Act underwent almost total revision in the Senate and further significant changes in the Conference Committee.

As passed, the Act represents important compromises on issues of state control of federal mental health funds and federal funding of state mental health advocacy programs.

State Control of Grants

The Act offers the state two levels of control over all applications for grants under the Act originating within the state. At the first level, the state can rank grant applications, including its own, in the order in which, if accepted by HHS, they will be funded. At the second level, the state has the option of rejecting an application outright and not submitting it to HHS, or of submitting it with modifications.

The state's decisions to rank and reject or modify may be appealed to HHS. HHS will disregard the state's ranking if the disgruntled local applicant shows there is "substantial evidence" that its application is better than those with a higher ranking. HHS will return rejected or modified applications for ranking or re-ranking, or disregard the modifications only if the unhappy local applicant shows that the state's action is "arbitrary or capricious."

While all states are given authority to rank applications, which they could not formally do under the Community Mental Health Center Act, only "qualified" states may reject or modify applications. In order to qualify, states must demonstrate that they are making at least a good faith effort to provide community programs for the chronically mentally ill, such as state-administered aftercare, regulation of adult homes, and prevention of over-concentration of the chronically mentally ill in any community. After HHS determines that a state is qualified, the state may enter in an agreement with HHS to become the "exclusive agent" for all grant applicants in the state.

In a qualified state which fails to live up to this agreement, or in an unqualified state which does not perform its more limited functions, applicants may approach HHS directly for funding.

Advocacy Grants

The Senate bill entered the Conference Committee with a list of rights which it encouraged, but did not require states to provide to mentally ill persons as a condition of funding. It did however require a state wishing to qualify for the higher level of control over federal funds to establish a statewide mental health advocacy system, resembling the Developmental Disabilities Protection and Advocacy Office. This would have been funded by formula grants of at least $50,000, with a total authorization of $I0,000,000.

The Act as it emerged from the Conference Committee retained the Senate's model, non-mandatory "bill of rights," but omitted the requirement that states must have an advocacy system with authority to pursue legal remedies in order to qualify for the higher degree of control over federal funds. …

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