(1) “Medicaid” means the program for medical assistance administered by the department under the social welfare act, 1939 PA 280, MCL 400.1 to 400.119b.

    (2) “Modernization” means an upgrading, alteration, or change in function of a part or all of the physical plant of a health facility. Modernization includes, but is not limited to, the alteration, repair, remodeling, and renovation of an existing building and initial fixed equipment and the replacement of obsolete fixed equipment in an existing building. Modernization of the physical plant does not include normal maintenance and operational expenses.

    (3) “New construction” means construction of a health facility where a health facility does not exist or construction replacing or expanding an existing health facility or a part of an existing health facility.

    (4) “Person” means that term as defined in section 1106 and includes a governmental entity.

    (5) “Planning area” means the area defined in a certificate of need review standard for determining the need for, and the resource allocation of, a specific health facility, service, or equipment. Planning area includes, but is not limited to, this state, a health facility service area, or a health service area or subarea within this state.

    (6) “Proposed project” means a proposal to acquire an existing health facility or begin operation of a new health facility, make a change in bed capacity, initiate, replace, or expand a covered clinical service, or make a covered capital expenditure.

    (7) “Rural county” means a county not located in a metropolitan statistical area or micropolitan statistical areas as those terms are defined under the “standards for defining metropolitan and micropolitan statistical areas” by the Statistical and Science Policy Office of the Office of Information and Regulatory Affairs of the United States Office of Management and Budget, 65 FR p. 82227 to 82238 (December 27, 2000).

    (8) “Stipulation” means a requirement that is germane to the proposed project and has been agreed to by an applicant as a condition of certificate of need approval.