(1) The Nursing Facility Penalty Cash Fund is created. Monetary penalties collected by the department pursuant to section 71-2098 shall be remitted to the State Treasurer for credit to such fund. The state investment officer shall invest any money in the fund available for investment pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.
(2) The department shall adopt and promulgate rules and regulations which establish circumstances under which the department may distribute funds from the Nursing Facility Penalty Cash Fund to protect the health or property of individuals residing in nursing facilities which the department has found in violation of federal regulations for participation in the medicaid program. Circumstances considered as a basis for distribution from the fund include paying costs to:
(a) Relocate residents to other facilities;
(b) Maintain the operation of a nursing facility pending correction of violations;
(c) Close a nursing facility; and
(d) Reimburse residents for personal funds lost.