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(a) The State Department of Health Care Services, in consultation with the County Behavioral Health Directors Association of California, shall establish a methodology for determining annual minimum expenditure levels for funds distributed pursuant to subdivision (c) of Section 5891. Beginning in the 2028–29 fiscal year, the minimum expenditure level shall be calculated using the average annual amount of distributed funds for a county in the preceding three years, without weighting or adjustment.
(1) Beginning in the 2028–29 fiscal year, by November 1 of each year the State Department of Health Care Services shall calculate minimum expenditure levels for each county for the following three fiscal years.
(2) (A) Each year, the State Department of Health Care Services shall calculate a revised minimum expenditure level for the next fiscal year to be used for the annual update upon receipt of an updated Behavioral Health Services Fund local assistance revenue projection from the State Department of Finance.
(B) The State Department of Health Care Services shall publish the revised minimum expenditure level if it is lower than the minimum expenditure level by 10 percent or more.
(b) (1) Commencing with the 2029–30 fiscal year and each fiscal year thereafter, a county shall spend an amount of distributed funds that is equal to or greater than the minimum expenditure level for that fiscal year, calculated in the prior year, pursuant to paragraph (1) of subdivision (a).
(2) Notwithstanding paragraph (1), if the State Department of Health Care Services publishes a minimum expenditure level for a fiscal year pursuant to subparagraph (B) of paragraph (2) of subdivision (a) a county shall spend an amount of distributed funds that is equal to or greater than the revised minimum expenditure level.
(c) A county may only spend funds from its prudent reserve when any of the following conditions occur:
(1) During any fiscal year for which the department publishes a revised minimum expenditure level pursuant to subparagraph (B) of paragraph (2) of subdivision (a).
(2) During any fiscal year in which the amount of distributed funds is less than the minimum expenditure level calculated pursuant to paragraph (1) of subdivision (a) for that fiscal year.
(3) During any fiscal year in which the county determines that there has been a change in local behavioral health needs or circumstances, such that transfers from the prudent reserve are necessary to maintain behavioral health services, respond to local, state, or federally declared emergency, or mitigate unanticipated fiscal constraints.
(d) (1) A county shall update the budget in the county’s integrated plan or annual update pursuant to paragraph (2) of subdivision (c) of Section 5963.02 for any fiscal year the minimum expenditure level calculated pursuant to paragraph (1) of subdivision (a) is higher or lower than the prior year’s minimum expenditure level for the same fiscal year by 10 percent or more.
(2) A county shall update the budget in the county’s integrated plan or annual update pursuant to paragraph (2) of subdivision (c) of Section 5963.02 for any fiscal year for which the department publishes a revised minimum expenditure level pursuant to subparagraph (B) of paragraph (2) of subdivision (a).
(e) For purposes of this section “distributed funds” means funds the State Controller distributes to a county pursuant to subdivision (c) of Section 5891.
(f) Notwithstanding Chapter 3.5 (commencing Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement, interpret, or make specific this section by means of plan or county letters, information notices, plan or provider bulletins, or other similar instructions without taking further regulatory action. Instructions issued by the department shall be consistent with this section.
(g) This section shall become operative July 1, 2028.