(1) The department must consider separately and jointly as applicants each person and entity named in the application for a contract for assisted living services, enhanced adult residential care, enhanced adult residential care-specialized dementia care services, or adult residential care. If the department finds any person or entity unqualified, the department must deny the contract.

(2) In making a determination whether to grant a contract, the department must review and consider:

(a) The information in the application;

(b) Other documents and information the department deems relevant, including inspection and complaint investigation findings for each licensed care facility, and each care facility that was required by law to be licensed but was not, with which any of the following have been affiliated within the last ten years:

(i) The applicant;

(ii) Any partner, or owner of five percent or more of the applicant; or

(iii) Any officer, director, or managerial employee of the applicant.

(c) The history and quality of services provided by the applicant; and

(d) Funding from the legislature available to the department to purchase residential care.

(3) The applicant and the assisted living facility for which a contract is sought must comply with all requirements established by chapter 74.39A RCW, chapter 388-78A WAC and this chapter.

(4) The department shall review the qualifications of applicants for enhanced adult residential care-specialized dementia care services contracts and may select a limited number with which to enter into contracts, based on:

(a) Which applicants are best qualified to provide specialized dementia care services, as determined by the department;

(b) The need for services in the area of the state in which the applicant is located; and

(c) Other qualifications specified in this section.

(5) The department must deny, suspend, revoke or refuse to renew a contract if an applicant or contractor or any partner, officer, director, managerial employee, or owner of five percent or more of the contractor or applicant has a history of significant noncompliance with federal or state regulations, rules or laws in providing care or services to frail elders, vulnerable adults or children. The department must consider evidence of noncompliance on a case-by-case basis.