Proposition 36 provided annual appropriations from the General Fund through 2005-06 to implement a voter-approved initiative requiring drug treatment instead of incarceration in prison or jail for certain nonviolent drug possession offenders. The guaranteed appropriations for Proposition 36 are expiring, giving the Legislature discretion now to determine the level of funding for this measure. We comment on how the funding level should be set and proposals for making policy changes in the Proposition 36 law.