Michigan was the first state to apply the permanency planning philosophy to children in the mental health system who have developmental disabilities or severe emotional disorders. Permanency planning involves identifying strategies for supporting children within permanent family relationships. This report outlines how the permanency planning philosophy is being implemented in Michigan's developmental disabilities and mental health systems, through family reunification, foster care, shared parenting, and adoption. It describes services provided by community mental health boards and children's initiatives of the Department of Mental Health. The state's efforts to engage in interagency collaboration are also discussed, along with challenges presented by the cultural diversity within the state. The perspectives of biological, foster, and adoptive families on issues in permanency planning are explored. The report concludes that, while many problems and concerns were identified, the fact remains that children with disabilities in Michigan have a better chance than anywhere else in the U.S. of having a stable and permanent family to live in, and of having much of the support they need. (Contains 17 references.) (JDD)