(1) The following residential facilities shall be are exempt from the operation of this chapter:

(1) (a) Nursing homes licensed under chapter 18.51 RCW;

(2) (b) Assisted living facilities licensed under chapter 18.20 RCW;

(3) (c) Facilities approved and certified under chapter 71A.22 RCW;

(4) (d) Residential treatment centers for individuals with mental illness licensed under chapter 71.24 RCW;

(5) (e) Hospitals licensed under chapter 70.41 RCW;

(6) (f) Homes for individuals with developmental disabilities licensed under chapter 74.15 RCW; and

(7) (g) A medical foster home, as defined in 38 C.F.R. 17.73, that is under the oversight and annually reviewed by the United States department of veterans affairs in which care is provided exclusively to three or fewer veterans, and its caregivers are in compliance with applicable state laws including any required training, certification, and background checks.

(2) The following individuals are exempt from the operation of this chapter:

(a) An individual who has or had an active license to operate as a foster family home, as defined in RCW 74.15.020, for at least three years and:

(i) Had provided personal care services, as defined in RCW 74.39A.009, for the former foster youth in the individual's care for at least three years on the date the youth exited foster care;

(ii) The only unrelated adults the individual provides personal care to in the home are the former foster youth or youths in (a)(i) of this subsection;

(iii) Does not have any founded or substantiated findings by child protective services or final substantiated findings by adult protective services; and

(iv) Is not the subject of a pending or prior adverse licensing action under RCW 74.15.130 at the time the youth in their care exits the foster care system; and

(b) An individual who is or has previously been approved by the department of children, youth, and families for a child-specific license under RCW 74.15.125 and:

(i) The only unrelated adults the individual is providing personal care to in the home are the former foster youth or youths for whom the individual received the child-specific license;

(ii) Does not have any founded or substantiated findings by child protective services or final substantiated findings by adult protective services; and

(iii) Is not the subject of a pending or prior adverse licensing action under RCW 74.15.130 at the time the youth in their care exits the foster care system.

(3) The department may establish rules to implement subsection (2) of this section.