New Jersey § 30:13-4

§ 30:13-4.

Whenever a nursing home requires a security deposit advanced prior to the admission

of a person to the nursing home, the money or other form of security, until repaid

or applied to payments in accordance with the terms of the contract or agreement,

including the resident's portion of the interest or earnings accumulated thereon as

hereinafter provided, shall continue to be the property of the resident and shall

be held in trust by the nursing home and shall not be mingled with the personal property

or become an asset of the nursing home. a. The nursing home shall: (1) invest that money in shares of an insured money market

fund established by an investment company based in this State and registered under

the “Investment Company Act of 1940,” 54 Stat. 789 ( 15 U.S.C. § 80a-1 et seq. ) whose shares are registered under the “Securities Act of 1933,” 48 Stat. 74 ( 15 U.S.C. § 77a et seq. ) and the only investments of which fund are instruments maturing in one year or less,

or (2) deposit that money in a State or federally chartered bank, savings bank or

savings and loan association in this State insured by an agency of the federal government

in an account bearing a variable rate of interest, which shall be established at least

quarterly, which is similar to the average rate of interest on active interest bearing

money market transaction accounts paid by the bank or association, or equal to similar

accounts of an investment company described in paragraph (1) of this subsection, less

an amount not to exceed 1% per annum of the amount so invested or deposited for the

costs of servicing and processing the accounts. b. Immediately after the security money is invested, the nursing home shall notify

the resident in writing of the name and address of the investment company, State or

federally chartered bank, savings bank or savings and loan association in which the

deposit or investment of security money is made, and the amount of the deposit. c. All of the money so deposited or advanced may be deposited or invested by the nursing

home in one interest-bearing or dividend yielding account as long as the nursing home

complies with all the other requirements of this act. 1 d. The nursing home is entitled to receive as administration expenses, a sum equivalent

to 1% per annum thereon or 12.5% of the aggregate interest yield on the security deposit,

whichever is greater, less the amount of any service fee charged by an investment

company, a State or federally chartered bank, savings bank or savings and loan association

for money deposited pursuant to this section, which is in lieu of all other administrative

and custodial expenses. The balance of the interest or earnings paid thereon by the investment company,

State or federally chartered bank, savings bank or savings and loan association shall

belong to the resident and shall be permitted to compound to the benefit of the resident,

or be paid to the resident in cash, or be credited toward the payments due on the

anniversary of the resident's admission to the nursing home in accordance with the

terms of the contract or agreement. e. If the nursing home fails to notify the resident of the name and address of the

investment company, State or federally chartered bank, savings bank or savings and

loan association in which the deposit or investment of the security is made, and the

amount thereof, within 30 days after receipt of the money from the resident, the resident

may give written notice to the nursing home that the security money shall be applied

on account of payments due or to become due from the resident, and thereafter the

resident shall be without obligation to make any further security deposit and the

nursing home shall not be entitled to make further demand for a security deposit. f. Within 60 days after the person is no longer a resident of the nursing home, the

nursing home shall return to the former resident or, if appropriate, to the resident's

estate, by personal delivery, registered or certified mail the sum so deposited plus

the former resident's portion of the interest or earnings accumulated thereon, less

any charges expended in accordance with the terms of a contract or agreement. The interest or earnings and any such deductions shall be itemized and the resident

or, if appropriate, the resident's estate, notified thereof by personal delivery,

registered or certified mail. g. The Commissioner of Banking may promulgate rules and regulations with respect to

the establishment of the method of computing the interest due to either the nursing

home or to the resident pursuant to the provisions of this act in accordance with

the “Administrative Procedure Act,” P.L.1968, c. 410 ( C.52:14B-1 et seq. ) if the money is deposited in an account or in shares of an investment company upon

which the interest varies on a periodic basis. 1

N.J.S.A. §§ 30:13-4.1, 30:13-4.2.