(a) The department may issue a provisional license to an entity for which application is made under AS 47.32.040 if, after inspection and investigation, the department determines that the application and the entity meet the requirements of this chapter, regulations adopted under this chapter, and any other applicable statutes or regulations. A provisional license is valid for a period not to exceed one year, except that the department may extend a provisional license for one additional period not to exceed one year.
(b) Before expiration of a provisional license issued under (a) of this section, the department shall inspect and investigate the entity to determine whether the entity is operating in compliance with this chapter, regulations adopted under this chapter, and any other applicable statutes or regulations. After inspection and investigation under this subsection and before expiration of a provisional license, the department shall issue a biennial license for the entity if the department finds that
(1) the entity meets the requirements for biennial licensure established in this chapter, regulations adopted under this chapter, and other applicable statutes and regulations;
(2) a ground for nonrenewal of a license does not exist; and
(3) any applicable fee has been paid.
(c) The department may place one or more conditions on a provisional or biennial license issued under this section in order to further the purposes of this chapter.