(a) The State Department of Health Care Services shall issue a request for proposals to develop system of care programs no later than October 1 in any year in which the state budget provides new funds to expand the system of care provided for in this chapter. The request for proposals shall include the following:

1. (1) Proposals may be submitted as a regional system of care by counties acting jointly, independent countywide proposals, and proposals to serve discrete geographic areas within counties or for a specific integrated services agency team. Nothing in the request for proposal shall be construed to restrict a county from contracting for part or all services included in the demonstration project proposal.
2. (2) The department shall establish reporting requirements for direct and indirect costs, and these requirements may be included in the request for proposals.
3. (3) The department shall require that proposals identify resources necessary to measure client and cost outcome and interagency collaboration. Proposal guidelines shall clearly require identification of procedures to document outcomes.
4. (4) Proposals must be approved by the board of supervisors and the local mental health board or commission.