1. Subject to appropriations, the department of mental health shall designate a county in which to establish a three-year demonstration project to design and implement a community-based inter-agency treatment system to serve severely emotionally disturbed children who receive services through public funding. Such county shall be required to fund ten percent of the cost of the project. The director of the department of mental health shall assemble an advisory board, consisting of members who are residents of such county, to plan the demonstration project. It is the intent of the general assembly that the demonstration project provide services that enable severely emotionally disturbed children to remain with their families, attend and make academic progress in public schools and not commit crimes or be incarcerated.

2. The demonstration project shall accomplish the following goals:

(1) Provide services in a manner that gives priority to permitting a child to reside safely in his usual family setting if that is in the best interests of the child;

(2) Ensure that when a joint evaluation indicates that out-of-home care and treatment are required, services are provided for as brief a time as possible, in the least restrictive setting consistent with effective services, and in as close proximity as possible to the child’s usual residence;

(3) Develop appropriate services for difficult to place children;

(4) Conduct research into children’s mental health service system in order that the system may be evaluated for effectiveness of treatment and cost benefit on an ongoing basis; and

(5) Provide for other counties or regions a replicable model for a comprehensive, coordinated children’s mental health service system.