The Legislature finds and declares that:

The department shall conduct a program of grants-in-aid for the following purposes:

Eligibility for grants shall be limited to community clinics, free clinics, clinics exempt from licensure under subdivision (c) of Section 1206, and any nonprofit corporation that is comprised of not less than three such clinics having a combined service area covering an entire county or more. Grants authorized pursuant to this article shall be limited in purpose to defraying operating expenses of the recipient clinic, including personnel costs, and for technical assistance provided to the recipient. Grants shall not be made or used for purchase of equipment, facility renovations, or purchase of land or buildings. As a condition to making a grant pursuant to this chapter, the director shall require the applicant to match not less than 20 or more than 40 percent of the amount granted. The required matching funds shall be determined by the director, based upon the ability of the applicant to provide matching funds. The required match may be in cash or in-kind contributions, or a combination of both. In-kind contributions may include, but shall not be limited to, staff and volunteer services. The director may waive all or a portion of the grantee match in individual cases of demonstrated hardship if the director determines that making the grant would effectively serve the purposes of this chapter. The director shall adopt criteria to be applied in determining whether to grant requests for waivers.

The department shall annually receive and process grant applications submitted by eligible applicants, and shall allocate grant moneys in accordance with the policies and priorities adopted pursuant to this article. Individual grants shall be limited to a maximum of sixty thousand dollars ($60,000), including grants to nonprofit corporations comprised of more than one clinic. However, grants may be renewed on an annual basis, subject to the submission and review of an annual renewal application, that shall be considered with, and subject to the same priorities as, new applications. No applicant shall receive more than one grant in any year.

Each grant shall be subject to a contract between the department and the grantee prescribing the services to be provided by the grantee thereunder and other conditions of the grant. A contract may provide for periodic advance payments for services to be performed, but in no event shall advance payments exceed 25 percent of the grant.

In developing policies and priorities pertaining to the allocation of grant funds, the department shall give primary consideration to the following factors:

All of the above factors being present, clinics primarily serving population groups determined by the director to be medically underserved shall be entitled to first consideration in the allocation of grant funds.

The department shall adopt guidelines for establishment of grant-supported activities, including criteria for evaluation of each activity and monitoring to assure compliance with grant conditions and applicable regulations of the department. The guidelines shall be developed in consultation with the Primary Care Clinics Advisory Committee and other advisory committees and persons as the department determines are appropriate.