(1) Applications for hospital and medical facilities construction projects for which federal funds are requested shall be submitted to the State Board of Health and may be submitted by the state or any political subdivision thereof or by any public or other nonprofit agency authorized to construct and operate a hospital or a medical facility.
(2) However, no application for a diagnostic or treatment center shall be approved unless the applicant is: The state, a political subdivision, or a public agency; or
(3) A person, corporation, or association which owns and operates a nonprofit hospital.
(4) Each application for a construction project shall conform to federal and state requirements.
(5) If, after affording reasonable opportunity for development and presentation of applications in the order of relative need, the Department of Health finds that a project application complies with subsection (a) of this section and is otherwise in conformity with the state plan, then it shall approve the application and shall recommend and forward it to the United States Surgeon General.
(6) The department by rule shall provide an opportunity for fair hearing and appeal to every applicant who is dissatisfied with any action regarding an application.