Declares that, in processing and approving certificates of capital authorization, priority shall be given to construction or major renovation of existing facilities or replacement facilities.

Provides that certificates of capital authorization for new facilities shall receive last priority and be assigned on a first-come, first-served basis.

Requires that certificate of capital authorization applications be filed with the department by the end of the previous state fiscal year to be considered for priority assignment in the following state fiscal year beginning July 1st.

Authorizes the department to give first priority for a project that is necessitated by an emergency situation even if the project is not submitted in a timely fashion.

Provides that a project that is not completed and ready for occupancy by the last day of the fiscal year for which the certificate of capital authorization was issued shall be given an extended completion deadline if it can be established that substantial and continuing progress toward commencement of the project has been made.

Declares that the annual capital authorization level shall be at least one-fortieth of the current replacement value of all licensed skilled nursing facilities in the state of Washington using the most current cost criteria contained in the Marshall and Swift valuation service.