Steinberg became passionate about mental health during his time on the Sacramento City Council. In 1997, the City of Sacramento engaged in a lawsuit against Loaves and Fishes, a private charity providing food to the homeless. The free lunches began to draw thousands of homeless people which had become a nuisance to local business near the shelter in North Sacramento. Former Mayor Joe Serna and then Councilmember Steinberg were the only two members to vote against the lawsuit. Upon further investigation into the rapidly increasing homeless population, Steinberg discovered that an overwhelming portion of homeless suffered from mental illness and did not have access to proper mental health care. He took up working on ways to help solve this issue. During his first year in the State Assembly, Steinberg authored AB 34, which began three pilot projects that provided integrated services to the homeless in Stanislaus, Los Angeles and Sacramento counties. The pilot was so successful in lowering hospitalization, incarceration and homeless episodes the program was expanded to more than 30 counties in late 2000 as AB 2034. Data collection by the pilot programs demonstrated the success of the services being provided. Steinberg authored Proposition 63, the California Mental Health Services Act, approved by California voters on the November 2004 statewide ballot. The act imposes a 1% tax on incomes of $1,000,000 or more for mental health funding. He co-authored "Prop 63" with advocate Sherman Russell Selix, Jr. In the first five years, the program has provided mental health care to 400,000 Californians. The Mental Health Services Act includes a “whatever-it-takes” approach to support services for people with severe mental illness and is the first of its kind in the United States. Services can include providing a safe place to live, a job, help in school, physical health care, clothing, food, or treatment when a mental illness and a substances abuse disorder are combined. These are examples of full service partnerships which have been proven to be effective in helping people with severe mental illness transition successfully to independent living situations. The Act also provides Prevention and Early Intervention services (PEI). PEI improves mental health care treatment by creating programs in places where mental health services are not traditionally given, such as schools, community centers and faith-based organizations. The intent of PEI programs is to engage individuals before the development of serious mental illness or serious emotional disturbance or to alleviate the need for additional or extended mental health treatment. The Mental Health Services Act has proven to be a cost-effective way to address mental health care.