1. The Department of Mental Health and Mental Retardation is authorized to plan for the replacement of Western State Hospital at an estimated cost of $80.5 million.

2. To the extent that the current Western State Hospital campus is no longer required for state purposes, the Department of Mental Health, Mental Retardation and Substance Abuse Services shall cooperate with the City of Staunton on the redevelopment of the campus to follow the construction of a new hospital facility. The Department and City shall solicit proposals by September 1, 2006 under the Public Private Education Facilities and Infrastructure Act of 2002 (PPEA) to determine interest in the development of the site to promote the economic development goals of the City and to provide revenues to enhance the long term interests of the residents and employees of Western State Hospital. Following the selection of a development team, the Department and City shall work collaboratively to maximize the potential opportunities afforded by the site and adjacent properties.

3. Any net proceeds received from the sale of surplus land currently occupied by Western State Hospital shall be invested in the Mental Health, Mental Retardation, and Substance Abuse Services Trust Fund established pursuant to § 37.2-318, Code of Virginia

4. The Department of Mental Health and Mental Retardation shall report periodically to the Chairmen of the Senate Finance and House Appropriations Committees on the plans and status of this project for their review and comment.