Proposition 36 Behavioral Health Implementation
Request for Information (RFI) Guidance, Resources, and Submission Support

Answer: Proposition 36, titled the “Homelessness, Drug Addiction, and Theft Reduction Act,” was passed by voters in November 2024. It has two distinct components:

1. Theft Reduction: Increases penalties for repeat theft offenses.
2. Drug Treatment: Creates a “Treatment-Mandated Felony” for possession of certain drugs (e.g., fentanyl, methamphetamine, heroin, cocaine) if the individual has two or more prior drug convictions.

Answer: No. This funding is allocated to County Behavioral Health Departments to implement the treatment, assessment, and care coordination requirements of the “Treatment-Mandated Felony” (H&S Code § 11395). Activities related to the prosecution, defense, or incarceration of individuals charged solely under the theft provisions (Penal Code § 666.1 or § 490.3) are not allowable expenditures.

Answer: It depends on the function of the role. AB 102 provided separate appropriations specifically for the Judicial Council to support court workload. However, DHCS recognizes that successful implementation requires a collaborative team.

• Not Allowable (Core Legal Duties): You cannot use these funds to hire an attorney to perform standard legal duties, such as prosecuting cases, representing clients in court, or filing motions. These are “Justice Sector” responsibilities distinct from the Behavioral Health allocation.
• Allowable (Coordination & Liaison): You may fund a position dedicated to program coordination and navigation for the Proposition 36 treatment track. This position can be housed in various departments depending on the county’s workflow:
  • County Behavioral Health/Public Health: This is the most common model. A “Prop 36 Coordinator” housed here would manage the interface between the clinical teams and the courts, track data, and ensure clients attend their appointments.
  • Embedded in Partner Agencies (DA/PD/Probation): You may fund a liaison position within a justice partner’s office if the position’s scope of work is strictly limited to coordination (e.g., a “Court Liaison” who facilitates behavioral health referrals and tracks compliance but does not carry a legal caseload).

Answer: “Behavioral Health Treatment Services” refers to direct clinical interventions provided to a client that meet the criteria for medical necessity and are consistent with American Society of Addiction Medicine (ASAM) criteria or relevant clinical standards.

Examples of Treatment:

• Clinical Assessments (Diagnostic evaluations).
• Individual and group counseling.
• Medication-Assisted Treatment (MAT).
• Crisis intervention.
• Withdrawal management (clinical components).

Answer: Yes, but with restrictions. Travel time to provide treatment services is allowable, but standard billing rules apply:

• Payer of Last Resort: If the client is a Medi-Cal beneficiary or has commercial insurance that includes travel time as a covered benefit, this must be used first.
• Documentation: You must maintain documentation distinguishing this travel time from other billed activities.

If you are unsure if a specific cost is billable to another payer or Prop 36, please contact The Center for clarification.

Answer: “Implementation” refers to the “Planning and Capacity Building” activities required to establish Prop 36 supports. Per AB 102, § 26(c), counties must spend at least 50% of their allocation on these activities (often referred to as infrastructure or capacity building).

Examples of Implementation/Planning and Capacity Building:

• Hiring & Training: Staffing costs for program setup, and training for clinicians, court staff, and justice partners.
• Policies & Procedures: Development of workflows, protocols, and MOUs.
• IT Infrastructure: Costs for Electronic Health Record (EHR) updates, data reporting systems, and case tracking software.
• Capital for Housing: Expenditures for housing and treatment infrastructure, including recovery housing (bricks and mortar or renovations).
• Navigation: Court liaison and coordination activities (non-clinical).

Answer: “Capital” refers to expenditures for tangible, non-expendable property that has a useful life of more than one year (e.g., land, buildings, major renovations).

• Leases & Maintenance: No. Leases, rent, and routine maintenance are considered Operating Costs, not Capital.
  • You can pay for leases and maintenance using Prop 36 funds, but these should be categorized under “Planning and Capacity Building” (Implementation), not the Capital line item.

Answer: “Room and Board” refers to the costs of lodging and food provided to a participant (e.g., in a Recovery Residence or Sober Living Environment). Because these are support services and not clinical treatment, they should be categorized under “Planning and Capacity Building” (Removing Barriers to Care).

Answer: Yes. Prop 36 funding is from the State General Fund, it can be used to provide services to individuals regardless of immigration status. However, standard “Payer of Last Resort” rules apply:

• If the individual has Medi-Cal: Services must be billed to Medi-Cal first. Prop 36 funds can be used for the match or for non-covered services.
• If the individual is not eligible for Medi-Cal: Prop 36 funds may cover 100% of the treatment and support service costs.

Answer: Counties may fund positions (including those within partner agencies) strictly for the purpose of program coordination, multidisciplinary team participation, and data tracking required for the behavioral health implementation. Funds cannot be used for general prosecution or defense duties.

Answer: Proposition 36 is a state statute implemented within the California Superior Court system. It does not necessarily affect independent Tribal judicial systems or legal enforcement within Tribal jurisdictions.

• Eligibility: If a Tribal member or AI/AN individual enters a County justice system and is mandated to treatment under Proposition 36, they are fully eligible for services funded by this grant.
• Collaboration: We strongly encourage counties to collaborate with Tribal Health Programs to ensure culturally competent care and coordination for these individuals.

Answer: Client transportation support is considered “Planning and Capacity Building” (Access Support), but Prop 36 funds must be the payer of last resort:

• Medi-Cal Beneficiaries: Transportation to medical appointments is a covered Medi-Cal benefit via Non-Medical Transportation (NMT). Prop 36 funds should not be used if NMT is available.
• Non-Billable Trips: Prop 36 funds may be used for transportation that is not billable to insurance, such as transport to court hearings, probation meetings, or housing interviews.
• Commercial/Uninsured: Most commercial insurance plans do not cover non-medical transportation. Therefore, Prop 36 funds may cover transportation to treatment (e.g., rideshare vouchers, bus passes) for commercial or uninsured clients, as this constitutes “removing a barrier to care” that is not covered by another payer.

Answer: No. This funding is provided to support the specific behavioral health needs of the Proposition 36 population using one-time, limited-term resources. Therefore, all purchases should align with what one-time funding can sustainably provide.

Recommendation: Counties are encouraged to utilize Service Contracts (e.g., contracting with a transportation vendor, purchasing Uber Health vouchers, or bulk bus passes). This ensures funds are spent on direct client services.

Answer: § 26(c) pertains to Medi-Cal billable treatment costs only. County behavioral health is required to pay 25% of the non-federal share, and the remaining portion of the non-federal share could be supported using Prop 36 one-time funds. In other words, the 25% county match that is required only applies to the non-federal share of the Medi-Cal billable treatment services. Any other costs that are non-Medi-Cal reimbursable, including but not limited to court-related services, are not subject to the 25% county match.

Answer: Local funding sources may include County General Funds, Realignment funds (if consistent with realignment statutes), Opioid Settlement Funds, or other non-federal local revenue streams. These funds cannot be federal funds.

Answer: Counties are strongly encouraged to prioritize one-time expenditures that build long-term capacity without creating unfunded future mandates. Recommended “infrastructure” and “capacity building” investments include:

• Systems & Technology: Updating Electronic Health Record (EHR) systems, building data exchange interfaces with Justice partners, or purchasing hardware (laptops, telehealth stations) to support field work.
• Training & Education: Developing and delivering training curricula for the entire ecosystem—clinicians, judges, public defenders, and district attorneys—on Proposition 36 workflows and requirements.
• Partnership Development: Funding facilitators or temporary liaisons to establish the Memorandums of Understanding (MOU) and operational workflows between the Courts, Probation, and Behavioral Health.
• Consultants & Contractors: Hiring subject matter experts to conduct needs assessments, design clinical protocols, or set up data reporting systems.

Answer: Yes. Funds can be used to develop clinical workflows, intake protocols, and assessment tools (e.g., by paying a clinical consultant to build the court-to-treatment pathway). This is considered a “Planning” expense. Once the system is live, the delivery of a clinical assessment to a specific patient would be considered a “Treatment” expense .

Answer: Yes. Counties may use Proposition 36 funds in conjunction with BHCIP Round 1 or 2 funding to support a comprehensive project (e.g., BHCIP covers construction while Prop 36 covers FF&E or startup staffing).

• Note on Match: Please be aware that Proposition 36 funding is State General Fund. Typically, State General Funds cannot be used as the required match for other state grants like BHCIP. Please contact The Center or your BHCIP analyst to confirm specific braiding and match eligibility before finalizing your budget.

Answer: Payment will be issued as a single lump sum following the full execution of the contract.

• Process: Once the contract is executed, the County will submit one invoice for their full allowable allocation.
• Allowable Costs: The lump sum is an advance to cover allowable costs incurred during the grant term. Counties will then report expenditures against this advance.

Answer: Yes. Fiscal or administrative staff may be included as direct costs if they are performing activities directly attributable to the Proposition 36 grant and track their time specifically to this funding source. Please ensure these costs are not already covered by your Indirect Cost Rate (ICR) to avoid double-billing.

Answer: Yes. Counties with a federally approved Indirect Cost Rate (ICR) may use that rate with justification. Counties without a negotiated rate may use the de minimis rate of 12% of modified total direct costs. Rates exceeding 25% would require additional justification and may prompt further review.

Answer: Yes. Budget modifications are allowed during the contract term. However, the county must maintain the statutory minimum of 50% of the total allocation for Planning and Capacity Building Activities (AB 102, § 26(c)).

Answer: Yes. For operational planning and reconciliation purposes, counties must complete their expenditures by the end of their contract on March 31, 2028. This ensures all reporting and reconciliation can be completed before the administrative program concludes.

Answer: Yes, but you must avoid supplantation.

• Supplement, Not Supplant: Proposition 36 funds must be used to supplement existing resources, not replace them. You cannot simply swap funding sources to free up Realignment dollars for other purposes if the clinician continues to do the exact same work.
• Allowable Use: You can use Proposition 36 funds if the clinician is taking on new or expanded duties specifically related to the Proposition 36-mandated treatment population. You must document the specific Proposition 36 activities they are performing (e.g., through time studies or distinct coding) to justify the charge.

Answer: While budget modifications are allowed, adding a completely new service category (Scope of Work) that was not in your original contract requires a formal contract amendment, which can be an administratively lengthy process.

• Recommendation: If you anticipate potentially providing treatment services later in the grant term, we strongly recommend including a placeholder allocation for Treatment in your initial RFI submission (even a small amount), provided you still meet the 50% infrastructure minimum.
• Benefit: Establishing the “Treatment” category in your initial Scope of Work makes it significantly easier to shift funds into that line item later via a simple budget modification, rather than requiring a full contract amendment to add a new scope.

Answer: Yes. Counties have the flexibility to allocate up to 100% of their funding to Planning and Capacity Building. Please note that moving funds into Category 2: Behavioral Health Treatment Services may trigger match requirements. For further details on the match requirement, please refer to the response above for FAQ 5.1.

Answer: No. An authorized signature is not required to submit the online RFI portal application. However, once the RFI is reviewed and approved, a formal Standard Agreement (contract) will be issued. That legal document must be signed by an authorized representative of the county to be fully executed and for funds to be disbursed.

Answer: Yes. Budgets must be structured to ensure funds are only used for the treatment-mandated felony population. Costs for infrastructure must be proportional to dedicated capacity, and service funding must “follow the individual” rather than being applied to general housing or services with broad priority.

Answer: No. Counties will be required to submit three expenditure reports (due December 11, 2026; September 30, 2027; and April 30, 2028).

Answer: Prop 36 funds can be used for recovery housing while the individual is under the court’s Prop 36 order.

Answer: Per Health and Safety Code § 11395 (Proposition 36), a violation of the treatment-mandated felony occurs when a defendant fails to successfully complete or comply with the court-ordered drug treatment program. Common examples of violations include:

• Failed Compliance: Failing or refusing to participate in the mandated treatment.
• Program Rule Violations: Missing treatment sessions, positive drug tests, or failing to comply with provider rules.
• New Criminal Activity: Committing a new offense while enrolled in the program.

Consequences: If a participant violates the terms, the court may proceed with sentencing, which can result in up to three years in county jail and the loss of the opportunity for case dismissal.

Note: While the definition is statutory, specific reporting templates and guidance regarding data collection will be provided by The Center at a later date.

Answer: For the RFI submission due February 27, 2026, counties only need to answer the narrative questions regarding data readiness (pages 15-17 of the RFI). Actual data reporting will commence after contract execution.

Answer: Please provide a transparent account of your current capacity. DHCS recognizes that Proposition 36 was written for counties but may not account for every individual county’s situation, and that current data systems may not align perfectly with the legislation’s reporting goals.

• Purpose: The RFI data section is a capacity assessment, not a compliance test. Per Appendix C of the RFI, you should select the option that best fits your county’s current status for each data element:
  • Yes, we currently collect and can report this data
  • No, and we do not expect to collect this data
  • We plan to build this capacity using Proposition 36 funds
  • We plan to build this capacity using other resources
• Impact: Honest feedback will help DHCS collaborate with the Judicial Council to establish feasible reporting standards. We will utilize these assessment responses to inform the development of the final data reporting guidance.

Answer: Yes. The RFI includes instructions for optional declination in Appendix B of the RFI. Declined funds will be reallocated to other participating counties.

Answer: No. Counties may choose to accept a reduced allocation amount if they do not anticipate being able to fully expend the funds by March 2028.

• Communication is Key: If a county accepts the full allocation but later projects they will not spend the entire amount, they must communicate with The Center immediately.
• Reallocation: Early communication allows the administrative entity to potentially reallocate unused funds to other counties that have identified a need for additional resources.
• Goal: This is one-time, limited funding, and the Department’s goal is to ensure these resources are fully utilized to support Proposition 36 implementation across the state. Any funds unspent by the deadline must be returned to the State.

Answer: The full list of allocations by county is available in Appendix A of the RFI, available on the DHCS Proposition 36 webpage.

Answer: No, they cannot be used interchangeably. Proposition 47 supports diversion for misdemeanors, while Proposition 36 specifically targets the “Treatment-Mandated Felony” population.

Answer: Yes. Hardware and software upgrades are categorized as “Planning and Capacity Building” (no match), while the clinical act of conducting assessments via telehealth is a “Behavioral Health Treatment Service” (match required, see the above FAQ 5.1).

Answer: Yes. The priority deadline is February 27, 2026. While we strongly encourage meeting this date for timely funding, counties anticipating delays due to board approval processes should contact The Center immediately to discuss coordination and a timeline to adjust for specific needs.

Answer: Yes. At a minimum, counties must collect data required by the Budget Act of 2024 (AB 102) to the best of their ability, including expenditures, program flows, demographics, and treatment outcomes.