"NEW SECTION.  Sec. 1   A new section is added to chapter 74.39A RCW to read as follows:
     (1) To the extent funds are appropriated for this purpose, the department shall establish a capital add-on rate, not less than the July 1, 2005, capital add-on rate established by the department, for those assisted living facilities contracting with the department that have a medicaid occupancy percentage of sixty percent or greater.
     (2) Effective January 1, 2006, the department shall use July 1, 2005, through December 31, 2005, medicaid resident days divided by the product of all its licensed boarding home beds irrespective of use, times calendar days for the six-month period, to determine the assisted living facility's medicaid occupancy percentage. Effective with July 1, 2007, and for each July 1st rate-setting period thereafter, the department shall determine the facility's medicaid occupancy percentage using the last six months' medicaid resident days from the preceding calendar year divided by the product of all its licensed boarding home beds irrespective of use, times calendar days for the six-month period. For the purposes of this section, medicaid resident days include those clients who are enrolled in a medicaid managed long-term care program, including but not limited to the program for all inclusive care and the medicaid integration project.
     (3) The medicaid occupancy percentage established beginning on January 1, 2006, and July 1, 2007, and for each July 1st thereafter, shall be used to determine whether an assisted living facility qualifies for the capital add-on rate under this section. Those facilities that qualify for the capital add-on rate shall receive the capital add-on rate throughout the applicable fiscal year, except that the rates established on January 1, 2006, shall be in effect until June 30, 2007."