SB793.DOC

SECTION 1. The legislature finds that there is a critical shortage of licensed physicians on the neighbor islands and that access to health care in these medically underserved areas will only deteriorate as the population ages. While it is reported that Hawaii ranks highly for physicians per capita, because of uneven distribution, neighbor island residents have limited or no access to primary care physicians and specialists. According to the department of commerce and consumer affairs professional and vocational licensing division, of the 4,083 licensed physicians practicing in Hawaii as of June 30, 2008, less than thirty-three per cent practice outside of Oahu. Immediate action is necessary to retain and attract licensed physicians to practice medicine on the neighbor islands.

The purpose of this Act is to establish and appropriate funds for a rural physician loan program for licensed physicians who graduate from an education and training program for physicians administered by the University of Hawaii John A. Burns school of medicine and commit to practice medicine for at least three to five years on the neighbor islands.

SECTION 2. Chapter 304A, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§304A‑ Hawaii rural physician loan program and special fund. (a) There is created the Hawaii rural physician loan program to be administered by the University of Hawaii in partnership with a financial institution whose operations are principally conducted in Hawaii. The program shall provide loans to at least five students per year who:

(1) Are or will be enrolled in an education and training program for physicians administered by the University of Hawaii John A. Burns school of medicine that leads to eligibility for a license under chapter 453; and

(2) Agree to practice as a licensed physician within six months of completion of their residency:

(A) In a rural health professional shortage area for a minimum of three consecutive years; or

(B) In a nonrural health professional shortage area for a minimum of five consecutive years.

Rural and nonrural health professional shortage areas shall be designated by the department of health by rule for counties in this state with a population of 500,000 or less.

Eligibility shall be determined by the John A. Burns school of medicine on a competitive basis. The number of loans awarded each year shall be determined by the board of regents based on available funds, provided that at least five loans shall be awarded each year. Each loan shall be made to cover the cost of resident tuition necessary to complete the education and training program under subsection (a)(1); provided that the total amount of a loan to any individual shall not exceed the cost of five years of resident tuition.

(b) Loan repayment obligations under the Hawaii rural physician loan program shall be forgiven and considered a grant under the following conditions and in the following amounts plus interest accrued on that amount:

(1) For loan recipients employed as licensed physicians in a rural health professional shortage area of the State, one-third of the total amount owed and unpaid shall be forgiven for each year employed; or

(2) For loan recipients employed as licensed physicians in a nonrural health professional shortage area of the State, one fifth of the total amount owed and unpaid shall be forgiven for each year employed.

(c) Beginning three months after the loan recipient fails to complete the enrollment requirement under subsection (a)(1), or service obligation under subsection (a)(2), a loan recipient shall repay three times the amount of the outstanding loan in periodic installments within a period not to exceed seven years. The University of Hawaii may charge late fees and all other reasonable costs for the collection of delinquent loans.

(d) Repayment under subsection (c) shall be deferred for a loan recipient who is performing a service obligation imposed by the National Health Service Corps or the Uniformed Service Scholarship Program. The University of Hawaii may waive or adjust the conditions of repayment of a loan under subsection (c) for loan recipients who fail to meet their service obligation for good cause. Liability for repayment of a loan shall be canceled upon the death or permanent total disability of the borrower. As used in this subsection, "total disability" shall have the same meaning as "person totally disabled" as defined under section 235-1.

(e) The University of Hawaii may enter into written contracts with collection agencies for the purpose of collecting delinquent loans or nonresident tuition and fees owed in accordance with chapter 103D. All loan payments collected, exclusive of a collection agency's commissions, shall revert and be credited to the Hawaii rural physician loan program special fund. A collection agency that enters into a written contract with the University of Hawaii pursuant to this section for the collection of delinquent loans may collect a commission from the debtor in accordance with the terms of, and up to the amounts authorized in the written contract.

(f) There is established in the treasury of the State the Hawaii rural physician loan program special fund to be administered by the University of Hawaii. Any funds appropriated by the legislature for the program, gifts, donations, and grants from public agencies and private persons, loan payments, proceeds of the operations of the program, and interest earned or accrued on moneys deposited in the fund shall become a part of the fund.

The University of Hawaii may expend moneys from the fund for the purposes of this section."

SECTION 3. Section 304A-502, Hawaii Revised Statutes, is amended to read as follows:

"[[]§304A-502[]] Power of regents to grant tuition waivers. (a) The board of regents, or its designated representatives, is authorized to grant, modify, or suspend tuition waivers.

The board may:

(1) Waive entirely or reduce the tuition fee or any of the other fees for graduate teaching and research assistants;

(2) Enter into agreements with government and university officials of any other state or foreign country to provide for reciprocal waiver of the nonresident tuition and fee differential;

(3) Waive the nonresident tuition and fee differential for selected students from Pacific and Asian jurisdictions when their presence would be beneficial to the university or the State;

(4) Waive entirely or reduce the tuition fee or any of the other fees for students, resident or nonresident; and

(5) Waive the nonresident tuition and fee differential for members in good standing of the following military units, regardless of their actual state of residence:

(A) The Hawaii national guard; and

(B) The federal reserve components of the Army, Navy, Air Force, Marine Corps, and Coast Guard who attend drills with units located within the State.

(b) The board of regents may waive the nonresident tuition and fee differential for nonresident students of the John A. Burns school of medicine for not more than five years. The waiver shall be conditioned on the agreement of the nonresident student to meet the enrollment requirements and service obligations set forth under section 304A‑ (a)(1) and (2).

(c) The board shall determine the percentage of allowable tuition and fee waivers for financial need and other university priorities. These tuition waivers and waivers of the nonresident tuition and fee differential shall be awarded in accordance with guidelines established by the board."

SECTION 4. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2009-2010 and the same sum or so much thereof as may be necessary for fiscal year 2010-2011 to be deposited into the Hawaii rural physician loan program special fund.

SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2009-2010 and the same sum or so much thereof as may be necessary for fiscal year 2010-2011 for the Hawaii rural physician loan program fund pursuant to section 2 of this Act.

The sums appropriated shall be expended by the University of Hawaii for the purposes of this Act.

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect upon its approval, provided that sections 4 and 5 shall take effect on July 1, 2009.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	793
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII