Cal. WIC § 4790

(a) It is the intent of the Legislature to provide an incentive for regional centers to select out-of-home placements that are most appropriate for each person with a developmental disability requiring out-of-home care and to provide a disincentive for inappropriate placement in or delayed discharge from state hospitals.

(b) By March 1, 1982, the Health and Welfare Agency shall submit to the Legislature a detailed implementation plan for a pilot project involving four regional centers. These regional centers shall receive allocations of funds equivalent to the cost of state hospital care for the clients of the individual regional center from which they shall purchase services from state hospitals or other providers.

(c) Funds so allocated shall cover costs of care of all clients of the pilot project regional centers in state hospitals and, in addition, shall be used to pay costs of (1) community care, including but not limited to, out-of-home care for clients currently residing in state hospitals who have been deemed more appropriately served in the community, and (2) out-of-home costs for persons placed after receipt of the allocation.

(d) Regional centers shall be selected on the basis of their willingness to participate in the project, their demonstrated ability to provide necessary community care resources, and their relative standing in the provision of high quality programmatic and administrative services in accordance with the systems evaluation package review of regional centers by the State Department of Developmental Services. In order to ensure the most efficient use of these provisions, one of the four selected regional centers shall have the highest ratio of nonstate hospital out-of-home residential placements in its total active caseload.