Cal. Welfare and Institutions Code § 4333

(a) In the event a county or counties elect to reduce their state hospital resources, beginning July 1, 1992, systemwide state hospital net bed reduction in any one year may not exceed 10 percent of the total for patients under Part 1 (commencing with Section 5000) of Division 5 in the prior year without the specific approval of the Director of State Hospitals. (b) Net bed reductions at any one hospital may not exceed 10 percent of its contracted beds without specific approval of the Director of State Hospitals. (c) If the proposed reduction in any year exceeds the maximum permitted amount, the department, with the assistance of counties, shall make every effort to contract for beds with other purchasers. (d) If total county requests for bed reduction in any one year or at any one facility still exceed the amount of reduction allowed, each county’s share of the reduction shall be determined by taking the ratio of its contracted beds to the total contracted and multiplying this by the total beds permitted to be reduced. (e) (1) Small counties shall be exempted from the limitations of this section and shall have the amount of their reduction determined by the Director of State Hospitals. (2) For purposes of this chapter, “small counties” means counties with a population of 125,000 or less based on the most recent available estimates of population data determined by the Demographic Research Unit of the Department of Finance. (f) It is the intent of the Legislature that counties have maximum flexibility in planning the use of these resources, which includes making full use of existing facilities and that the Director of State Hospitals enforce their exemption authority in a manner consistent with this intent. Because freed-up beds may be purchased by other counties or may be used for other purposes, it is anticipated that individual county flexibility will be substantially greater than the 10-percent figure described in subdivisions (a) and (b). (g) Counties may annually contract for state hospital beds as single entities or in combination with other counties. For purposes of this section, small counties, as defined in subdivision (e): (1) Are encouraged to establish regional authorities to pool their resources to assure their ability to provide the necessary array of services to their mentally ill populations not otherwise available to them on an individual basis. (2) May receive loans from the General Fund when emergency state hospital beds are needed, not to exceed one year in duration, with interest payable at the same rate as that earned through the Pooled Money Investment Fund. Any interest due may be waived based upon a finding of emergency by the Secretary of California Health and Human Services and the Director of Finance.