2.__Disbursements from fund.__A nursing facility may apply to the department to receive disbursements from the fund.__The department shall establish criteria, in consultation with representatives of nursing facilities, governing approval of disbursements from the fund that at a minimum require a finding by the department that the proposed use of funds will result in a significant improvement in the efficiency of the management or operation of the nursing facility.

Sec. 4. 22 MRSA §1813, 3rd ¶, as enacted by PL 1997, c. 488, §1, is amended to read:

For nursing facilities providing both nursing home and assisted living services, the department shall issue one license reflecting both levels of care. The commissioner shall adopt rules to implement this paragraph. Rules adopted pursuant to this paragraph are routine technical rules as defined by Title 5, chapter 375, subchapter II-A. Notwithstanding any other provision of this Title, a nursing facility may provide assisted living services in nursing facility beds without obtaining approval under either chapter 103 or this chapter if there are no residential care beds available within 25 miles of that facility or if necessary to meet the care needs of an existing resident, as long as the number of nursing facility beds that are used to provide assisted living services do not exceed 10% of the total number of beds licensed in such facility.

Sec. 5. 22 MRSA §§1813-A and 1813-B are enacted to read:

§1813-A.__Single nursing facility bed license purchasing program

Upon petition by a nursing facility other than a multi- facility operation, or at the department's own initiative, the department shall identify geographic areas within the State that have an excess capacity of nursing facility beds and shall issue one or more requests for proposals to purchase rights to existing nursing facility bed licenses.__The purchase price is subject to competitive bid through the request for proposal process and must be funded through loans made available by the Maine Health and Higher Educational Facilities Authority pursuant to chapter 413 in the amount certified by the department to the authority.__The annual debt service, including principal, interest and amortization of any issuance costs and discount, must be allocated to remaining nursing facilities in the State in