(1) The department of commerce must establish a competitive process to solicit proposals for and prioritize projects whose primary objective is to assist animal shelters in acquiring, constructing, or rehabilitating facilities.

(a) The department of commerce must conduct a statewide solicitation of project applications from local governments, nonprofit organizations, and other entities, as determined by the department of commerce. The department of commerce must evaluate and rank applications in consultation with a citizen advisory committee using objective criteria. At a minimum, animal shelters must: (i) Meet the best practice standard of a ninety percent lives saved rate; (ii) intake at least six hundred animals per year; and (iii) spay and neuter the animals available for adoption.

(b) The evaluation and ranking process must also include an examination of existing assets that applicants propose to apply to projects. The grant assistance provided under this section may not exceed twenty-five percent of the total cost of the project. The nonstate portion of the total project cost may include cash, the value of real property when acquired solely for the purpose of the project, and in-kind contributions.

(3) The department of commerce must submit a prioritized list of recommended projects to the governor and the legislature in the department of commerce's biennial capital budget request beginning with the 2021-2023 biennium and every two years thereafter. The list must include a description of each project, the amount of recommended state funding, and documentation of nonstate funds to be used for the project. The total amount of recommended state funding for the projects on a biennial project list must not exceed five million dollars. The department of commerce may not sign contracts or otherwise financially obligate funds under this section until the legislature has approved a specific list of projects.

(4) In contracts for grants authorized under this section the department of commerce must include provisions that require that capital improvements be held by the grantee for a specified period of time appropriate to the amount of the grant and that facilities be used for the express purpose of the grant. If the grantee is found to be out of compliance with provisions of the contract, the grantee must repay to the state general fund the principal amount of the grant plus interest calculated at the rate of interest on state of Washington general obligation bonds issued most closely to the date of authorization of the grant.