(1) (a) The department of public health and environment may deny an application for a new or renewal license under this part 1 or revoke a license if the applicant or licensee has not satisfied the requirements of this part 1 or part 6 of this article and the rules of the department or the state board of health. If a license is denied or revoked, the department may grant the applicant or licensee a provisional license upon payment of a fee established by the state board of health by rule, subject to the limitations in paragraph (c) of this subsection (1). The provisional license is valid for no longer than ninety days and may be issued to allow the applicant or licensee time to comply with the requirements for a regular license. A second provisional license may be issued if the department determines it is necessary to effect compliance. The second provisional license must be issued for the same duration as the first provisional license upon payment of the fee established by the state board of health by rule, subject to the limitations in paragraph (c) of this subsection (1). No further provisional licenses may be issued for the then current year after the second issuance.

(b) The state board of health by rule or as otherwise provided by law may reduce the amount of the fee established pursuant to paragraph (a) of this subsection (1) if necessary pursuant to section 24-75-402 (3), C.R.S., to reduce the uncommitted reserves of the fund to which all or any portion of the fee is credited. After the uncommitted reserves of the fund are sufficiently reduced, the state board of health by rule or as otherwise provided by law may increase the amount of the fee as provided in section 24-75-402 (4), C.R.S.

(c) On or after June 4, 2012, the state board of health may increase the amount of a provisional license fee established pursuant to subsection (1)(a) of this section that is in effect on June 4, 2012, by an amount not to exceed the annual percentage change in the United States department of labor, bureau of labor statistics, consumer price index for Denver-Aurora-Lakewood for all urban consumers and all goods, or its applicable predecessor or successor index. Nothing in this subsection (1)(c) limits the ability of the state board of health to reduce the amount of a provisional license fee in effect on such date or to modify fees in accordance with subsection (1)(b) of this section as necessary to comply with section 24-75-402.

(2) Upon a finding of reasonable compliance by an applicant holding a provisional license, a regular license shall be issued upon receipt of the regular license fee established pursuant to section 25-3-105.

(3) No denial of a renewal license shall be lawful unless, before institution of such proceedings by the department of public health and environment, said department has given the licensee notice in writing of facts on conduct that may warrant denial, has afforded the applicant opportunity to submit written data, views, and arguments with respect to such facts on conduct, and, except in cases of deliberate and willful violation, has given the applicant a reasonable opportunity to comply with all lawful requirements for licensure.

(4) No application for renewal of a license shall be denied by the department of public health and environment, and no previously issued license shall be revoked, suspended, annulled, limited, or modified until after a hearing as provided in section 24-4-105, C.R.S.

(5) The department of public health and environment may suspend or revoke the license for the operation of a nursing care facility or intermediate care facility of any licensee convicted of violating any provision of section 26-1-127 or section 25.5-6-206 (8), C.R.S., if the department finds such suspension or revocation necessary to safeguard the rights of patients in the future. No license or permit shall thereafter be issued to any person so convicted, except upon a specific finding by the department that the rights of the patients will have adequate safeguards.