The department may exempt a pilot project site from the requirements of subdivisions (d) and (f) of Section 14139.33 if both the following conditions are met:

1. (a) State funds were not being used in the geographic area covered by the pilot projects to provide those services at the time of application to the pilot program.
2. (b) The pilot project site can demonstrate to the department how it plans to develop these services, and within what timeframe, during the pilot program.