Provides that it is the intent of the legislature that: (1) Community-based residential services supporting people with developmental disabilities should be available in the most integrated setting appropriate to individual needs; and

(2) An extensive transition planning and placement process should be used to ensure that people moving from a residential habilitation center to a community setting have the services and supports needed to meet their assessed health and welfare needs.

Requires the department of social and health services to begin operation of two houses located on the grounds of the Frances Haddon Morgan center as state-operated living alternatives.

Directs the Frances Haddon Morgan center to cease to operate as a residential habilitation center.