(2) When federal funds are not available or used for payment of direct financial assistance to persons displaced by department acquisition of property, the department may provide direct financial assistance to such persons. Financial assistance authorized by this subsection shall not exceed the total amount that would have been payable under subsection (1) of this section if federal funds had been available or used. The department may adopt rules and regulations to carry out the provisions of this subsection. [1959 c.648 §2; 1963 c.187 §2; 1965 c.222 §1]