Declares an intent to substantially improve the delivery of children's mental health services in Washington state through the development and implementation of a children's mental health system that: (1) Values early identification, intervention, and prevention;

(2) Coordinates existing categorical children's mental health programs and funding, through efforts that include elimination of duplicative care plans and case management;

(3) Treats each child in the context of his or her family, and provides services and supports needed to maintain a child with his or her family and community;

(4) Integrates families into treatment through choice of treatment, participation in treatment, and provision of peer support;

(5) Focuses on resiliency and recovery;

(6) Relies to a greater extent on evidence-based and promising practices;

(7) Is sensitive to the unique cultural circumstances of children of color and children in families whose primary language is not English; and

(8) To the greatest extent possible, blends categorical funding to offer more service and support options to each child.

Declares that it is the goal of the legislature that, by 2012, the children's mental health system in Washington state include the following elements: (1) A continuum of services from early identification, intervention, and prevention through crisis intervention, including peer support and parent mentoring services;

(2) Equity in access to services for similarly situated children, including children with co-occurring disorders;

(3) Developmentally appropriate, high quality, and culturally responsive services available statewide;

(4) Treatment of each child in the context of his or her family and other persons that are a source of support and stability in his or her life;

(5) A sufficient supply of qualified and culturally diverse children's mental health providers;

(6) Use of developmentally appropriate evidence-based and promising practices; and

(7) Integrated and flexible services to meet the needs of children who, due to mental illness or emotional or behavioral disturbance, are at risk of out-of-home placement or involved with multiple child-serving systems.

Provides that educational service district boards may respond to a request for proposal for operation of a wraparound model site under this act and, if selected, may contract for the provision of services to coordinate care and facilitate the delivery of services and other supports under a wraparound model.

Appropriates five hundred thousand dollars from the general fund--state for fiscal year 2008 and five million dollars from the general fund--state for fiscal year 2009 to the department of social and health services solely for implementation of a wraparound model of integrated children's services delivery in three counties in Washington state. Two of the counties shall be located in western Washington, and one of the counties shall be located in eastern Washington.

Provides that the wraparound model sites shall serve children with serious emotional or behavioral disturbances who are at high risk of residential or correctional placement or psychiatric hospitalization, and who have been referred for services from the department, a county juvenile court, a tribal court, a school, or a licensed mental health provider or agency.

Appropriates ten million dollars from the general fund--state for fiscal year 2008 and ten million dollars from the general fund--state for fiscal year 2009 to the department of social and health services solely for mental health services for low-income children who do not meet regional support network access to care standards, regardless of their medical assistance eligibility status.

Appropriates seven hundred thousand dollars from the general fund--state for fiscal year 2008 and seven hundred thousand dollars from the general fund--state for fiscal year 2009 to the department of social and health services for the purpose of implementing this act.

Appropriates one million forty thousand dollars from the general fund--state for fiscal year 2008 and six hundred thousand dollars from the general fund--state for fiscal year 2009 to the department of social and health services for the purpose of implementing this act.

Appropriates five hundred thousand dollars from the general fund--state for fiscal year 2008 and five hundred thousand dollars from the general fund--state for fiscal year 2009 to the economic services program for the purpose of implementing this act.

Repeals RCW 71.36.020, 71.36.030, and 71.36.040.