(a) Subject to an appropriation by the Legislature for this express purpose, the department may contract as follows:

1. (1) For subacute bed capacity, including, but not limited to, institutions for mental disease, mental health rehabilitation centers, skilled nursing facilities, or any other treatment options, such as community-based restoration of competency services, to address the increasing number of patient referrals to the department.

2. (2) With private or public entities to house and treat individuals committed to the department pursuant to Sections 1026, 1370, and 2972 of the Penal Code or Section 5358 of this code. Contracted funds may include any of the following:

   1. (A) Program implementation costs.
   2. (B) Construction costs, including funds for projects to build new facilities or modify, expand, or retrofit an existing space.
   3. (C) One-time purchases of patient and staff furnishings and minor equipment.
   4. (D) Activities related to recruitment and training of staff before program activation.
   5. (E) Operating expenses.