BILL NUMBER: AB 1627	CHAPTERED
	BILL TEXT

	CHAPTER  582
	FILED WITH SECRETARY OF STATE  SEPTEMBER 29, 2003
	APPROVED BY GOVERNOR  SEPTEMBER 28, 2003
	PASSED THE ASSEMBLY  SEPTEMBER 10, 2003
	PASSED THE SENATE  SEPTEMBER 4, 2003
	AMENDED IN SENATE  SEPTEMBER 2, 2003
	AMENDED IN SENATE  JULY 16, 2003
	AMENDED IN SENATE  JULY 3, 2003
	AMENDED IN ASSEMBLY  MAY 23, 2003
	AMENDED IN ASSEMBLY  MAY 8, 2003
	AMENDED IN ASSEMBLY  APRIL 24, 2003
	AMENDED IN ASSEMBLY  APRIL 7, 2003

INTRODUCED BY   Assembly Member Frommer
   (Coauthor:  Assembly Member Matthews)

                        FEBRUARY 21, 2003

   An act to amend Sections 1971, 2154.2, 2201, and 3516.1 of the
Business and Professions Code, to amend Section 92725 of the
Education Code, and to amend Sections 124425, 124760, 124765, 127755,
127928, 128040, 128205, 128215, 128235, 128260, 128330, and 128385
of, to add Section 128207 to, and to add Article 11 (commencing with
Section 1339.50) to Chapter 2 of Division 2 of, the Health and Safety
Code, relating to health care.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1627, Frommer.   Health care.
   (1) Existing law creates the California Health Manpower Policy
Commission, which designates the geographical rural areas within
California where unmet priority need for medical services exist.
   This bill would change the name of this commission to the
California Healthcare Workforce Policy Commission.
   (2) Under existing law, the State Department of Health Services
regulates the licensure and operation of health facilities, including
hospitals.  Under existing law, violation of these provisions, or
any rule or regulation adopted thereunder, constitutes a misdemeanor.

   This bill would establish the Payers' Bill of Rights.  The bill
would, beginning July 1, 2004, require a hospital, except a small and
rural hospital, that uses a charge description master, as defined,
to make available a written or electronic copy in accordance with
specified provisions.  This bill would also require a hospital to
post a notice, as specified, that informs patients that the hospital'
s charge description master is available pursuant to the specified
provisions.
   This bill would require each hospital to compile a list of the
charges for 25 services or procedures commonly charged to patients
and, beginning July 1, 2004, make this list available to any person
upon request.
   This bill would authorize any person to file a claim with the
department alleging violation of these provisions, and would require
the department to investigate and inform the complaining person of
its determination whether a violation has occurred and what action it
will take.
   This bill would also require, beginning July 1, 2004, that each
hospital file a copy of its charge description master and other
information with the Office of Statewide Health Planning and
Development, and would impose related reporting requirements.
   The bill would prohibit a hospital from conditioning acceptance of
a contract with a health care service plan or health insurer on
waiving any of the foregoing provisions.
   By imposing new requirements on hospitals, this bill would create
new crimes, thereby imposing a state-mandated local program.
  (3) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state.  Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 1971 of the Business and Professions Code is
amended to read:
   1971.  For the purposes of this article, the following terms have
the following meanings:
   (a) "Board" means the Dental Board of California.
   (b) "Office" means the Office of Statewide Health Planning and
Development.
   (c) "Program" means the California Dental Corps Loan Repayment
Program.
   (d) "Dentally underserved area" means a geographic area eligible
to be designated as having a shortage of dental professionals
pursuant to Part I of Appendix B to Part 5 of Chapter 1 of Title 42
of the Code of Federal Regulations or an area of the state where
unmet priority needs for dentists exist as determined by the
California Healthcare Workforce Policy Commission pursuant to Section
128224 of the Health and Safety Code.
   (e) "Dentally underserved population" means persons without dental
insurance and persons eligible for the Denti-Cal and Healthy
Families Programs who are population groups described as having a
shortage of dental care professionals in Part I of Appendix B to Part
5 of Chapter 1 of Title 42 of the Code of Federal Regulations.
   (f) "Practice setting" means either of the following:
   (1) A community clinic, as defined in subdivision (a) of Section
1204 and subdivision (c) of Section 1206 of the Health and Safety
Code, a clinic owned or operated by a public hospital and health
system, or a clinic owned and operated by a hospital that maintains
the primary contract with a county government to fulfill the county's
role pursuant to Section 17000 of the Welfare and Institutions Code,
which is located in a dentally underserved area and at least 50
percent of whose patients are from a dentally underserved population.

   (2) A dental practice or dental corporation, as defined in Section
1800 of this code, located in a dentally underserved area and at
least 50 percent of whose patients are from a dentally underserved
population.
   (g) "Medi-Cal threshold languages" means primary languages spoken
by limited-English-proficient (LEP) population groups meeting a
numeric threshold of 3,000, eligible LEP Medi-Cal beneficiaries
residing in a county, 1,000 Medi-Cal eligible LEP beneficiaries
residing in a single ZIP Code, or 1,500 LEP Medi-Cal beneficiaries
residing in two contiguous ZIP Codes.
   (h) "Fund" means the State Dentistry Fund.
   (i) "Account" means the Dentally Underserved Account which is
contained within the fund.
  SEC. 2.  Section 2154.2 of the Business and Professions Code is
amended to read:
   2154.2.  For the purposes of this article, the following terms
have the following meanings:
   (a) "Division" means the Division of Licensing.
   (b) "Office" means the Office of Statewide Health Planning and
Development (OSHPD).
   (c) "Program" means the California Physician Corps Loan Repayment
Program.
   (d) "Medically underserved area" means an area as defined in Part
5 of Chapter 1 of Title 42 of the Code of Federal Regulations or an
area of the state where unmet priority needs for physicians exist as
determined by the California Healthcare Workforce Policy Commission
pursuant to Section 128225 of the Health and Safety Code.
   (e) "Medically underserved population" means the Medi-Cal, Healthy
Families, and uninsured populations.
   (f) "Practice setting" means either of the following:
   (1) A community clinic as defined in subdivision (a) of Section
1204 and subdivision (c) of Section 1206 of the Health and Safety
Code, a clinic owned or operated by a public hospital and health
system, or a clinic owned and operated by a hospital that maintains
the primary contract with a county government to fulfill the county's
role pursuant to Section 17000 of the Welfare and Institutions Code,
which is located in a medically underserved area and at least 50
percent of whose patients are from a medically underserved
population.
   (2) A medical practice located in a medically underserved area and
at least 50 percent of whose patients are from a medically
underserved population.
   (g) "Primary specialty" means family practice, internal medicine,
pediatrics, or obstetrics/gynecology.
   (h) "Medi-Cal threshold languages" means primary languages spoken
by limited-English-proficient (LEP) population groups meeting a
numeric threshold of 3,000, eligible LEP Medi-Cal beneficiaries
residing in a county, 1,000 Medi-Cal eligible LEP beneficiaries
residing in a single ZIP Code, or 1,500 LEP Medi-Cal beneficiaries
residing in two contiguous ZIP Codes.
   (i) "Fund" means the Contingent Fund of the Medical Board of
California.
   (j) "Account" means the Medically Underserved Account which is
contained within the fund.
  SEC. 3.  Section 2201 of the Business and Professions Code is
amended to read:
   2201.  For the purposes of this article:
   (a) "Commission" means the California Healthcare Workforce Policy
Commission.
   (b) "Division" means the Division of Licensing of the Medical
Board of California.
   (c) "Practice of medicine" or "medical practice" means all
activities authorized by a physician's and surgeon's certificate,
except activities performed in the course of employment as a public
health officer, as a medical school faculty member where teaching
time is more than 25 percent of the working day, or as a resident or
first-year postgraduate trainee.
   (d) "Primary care services" means those medical services involving
the specialties of general practice, family practice, general
internal medicine, obstetrics, gynecology, and general pediatrics.
  SEC. 4.  Section 3516.1 of the Business and Professions Code is
amended to read:
   3516.1.  (a) (1) Notwithstanding any other provision of law, a
physician who provides services in a medically underserved area may
supervise not more than four physician assistants at any one time.
   (2) As used in this section, "medically underserved area" means a
"health professional(s) shortage area" (HPSA) as defined in Part 5
(commencing with Section 5.1) of Chapter 1 of Title 42 of the Code of
Federal Regulations or an area of the state where unmet priority
needs for physicians exist as determined by the California Healthcare
Workforce Policy Commission pursuant to Section 128225 of the Health
and Safety Code.
   (b) This section shall become inoperative on July 1, 2007, and, as
of January 1, 2008, is repealed, unless a later enacted statute that
is enacted before January 1, 2008, deletes or extends the dates on
which it becomes inoperative and is repealed.
  SEC. 5.  Section 92725 of the Education Code is amended to read:
   92725.  (a) The program shall be considered successful if, after
implementation of the program, all of the following occur:
   (1) There is a 10 percent or greater increase in the rate of
program graduates who choose to practice primary care over the
average number of program graduates who chose to practice primary
care during the previous five years.
   (2) There is a decrease in the use of emergency room facilities
for nonemergency procedures by persons served by the program from the
use of emergency room facilities for nonemergency procedures during
the previous five years.
   (3) Families served by the program have received expanded health
services without an increase in per capita health costs.
   (b) Based on the evaluation of the program by the university
pursuant to Section  92724, the Office of Statewide Health Planning
and Development, in consultation with the California Healthcare
Workforce Policy Commission, shall recommend to the Legislature on or
before January 1, 1998, whether funding for the program should be
expanded to include other medical schools.
   (c) If the recommendation is made to expand the program pursuant
to subdivision (b), it is the intent of the Legislature that the
program be expanded to allow private medical schools and private
schools of nursing to participate in the program in order to permit
substantially all students who are training to become physicians and
surgeons, nurse practitioners, or physician assistants to receive a
portion of their training in a community-based education program.
  SEC. 6.  Article 11 (commencing with Section 1339.50) is added to
Chapter 2 of Division 2 of the Health and Safety Code, to read:

      Article 11.  Payers' Bill of Rights

   1339.50.  This article shall be known and may be cited as the
Payers' Bill of Rights.
   1339.51.  (a) (1) Beginning July 1, 2004, a hospital, as defined
in paragraph (2) of subdivision (b), shall make a written or
electronic copy of its charge description master available, either by
posting an electronic copy of the charge description master on the
hospital's Internet Web site, or by making one written or electronic
copy available at the hospital location.
   (2) A small and rural hospital, as defined in Section 124840,
shall be exempt from paragraph (1).
   (b) For purposes of this article, the following definitions shall
apply:
   (1) "Charge description master" means a uniform schedule of
charges represented by the hospital as its gross billed charge for a
given service or item, regardless of payer type.
   (2) "Hospital" means a hospital, as defined in subdivision (a),
(b), or (f) of Section 1250, that uses a charge description master.
   (3) "Office" means the Office of Statewide Health Planning and
Development.
   (c) The hospital shall post a clear and conspicuous notice in its
emergency department, if any, in its admissions office, and in its
billing office that informs patients that the hospital's charge
description master is available in the manner described in
subdivision (a).
   (d) Any information about charges provided pursuant to subdivision
(a) shall include information about where to obtain information
regarding hospital quality, including hospital outcome studies
available from the office and hospital survey information available
from the Joint Commission for Accreditation of Healthcare
Organizations.
   1339.52.  A hospital may not condition acceptance of a contract
with a health care service plan or health insurer upon the health
care service plan or health insurer waiving any provision of this
article.
   1339.54.  Any person may file a claim with the department alleging
a violation of this article.  The department shall investigate and
inform the complaining person of its determination whether a
violation has occurred and what action it will take.
   1339.55.  (a) Beginning July 1, 2004, each hospital shall file a
copy of its charge description master annually with the office, in a
format determined by the office.
   (b) Each hospital shall calculate an estimate of the percentage
increase in the hospital's gross revenue due to any price increase
for charges for patient services during the 12-month period beginning
with the effective date of the charge description master filed with
the office.  Each hospital shall file the calculation and supporting
documentation with the office, in a form prescribed by the office, at
the time that the charge description master is filed.  The office
may compile and publish this information on its Internet Web site.
   1339.56.  Each hospital shall compile a list of the charges for 25
services or procedures commonly charged to patients.  Beginning July
1, 2004, each hospital shall make this list available to any person
upon request.  Each hospital shall file this list annually with the
office, in a form prescribed by the office, along with the charge
description master.  After reviewing hospital filings, the office may
develop a uniform reporting form for the 25 services or procedures
most commonly charged to patients, may require hospitals to file this
form with the office in a form prescribed by the office, and may
require hospitals to provide patients with the charges for these 25
services or procedures.
   1339.57.  The office may compile a list of the 10 most common
Medicare diagnostic related groups (DRGs) and the average charge for
each of these DRGs per hospital.  The office may publish this
information on its Internet Web site.
   1339.58.  Any information provided by the office on its Internet
Web site pursuant to Section 1339.56 or 1339.57 may inform persons
where quality of care information about hospitals may be obtained,
including hospital outcome studies available from the office and
hospital survey information available from the Joint Commission for
Accreditation of Healthcare Organizations.
   1339.59.  A hospital shall be in violation of this article if it
knowingly or negligently fails to comply with the requirements of
this article.
  SEC. 7.  Section 124425 of the Health and Safety Code is amended to
read:
   124425.  (a) It is the intent of the Legislature that funds
authorized by the Primary Care Services Act (Section 27) be provided
to organizations and agencies that are located in underserved areas
or that are serving population groups identified pursuant to
subdivision (b).
   (b) Every two years the director shall develop a list of
underserved rural and urban areas and underserved population groups.
The director shall take into consideration the list of urban and
rural areas designated as medically underserved by the California
Healthcare Workforce Policy Commission and by the office and federal
medically underserved areas and population groups designated by
federal agencies.
   (c) The director shall develop the list of underserved rural and
urban areas and underserved population groups, set forth in
subdivision (b), after consulting and receiving written
recommendations from the Primary Care Clinics Advisory Committee and
after consulting with appropriate groups and individuals, including
individuals representing underserved populations and local
government.
  SEC. 8.  Section 124760 of the Health and Safety Code is amended to
read:
   124760.  The California Healthcare Workforce Policy Commission
shall establish a plan that integrates family practice residencies
and other health sciences education programs established in rural
areas pursuant to Article 8 (commencing with Section 31910) of
Chapter 5 of Division 5 of Division 22 of the Education Code with the
health services provided pursuant to Article 3 (commencing with
Section 124700).
  SEC. 9.  Section 124765 of the Health and Safety Code is amended to
read:
   124765.  The California Healthcare Workforce Policy Commission, in
coordination with the Rural Health Section of the department, shall
designate the geographical rural areas within California where unmet
priority need for medical services exists.
  SEC. 10.  Section 127755 of the Health and Safety Code is amended
to read:
   127755.  The office shall consult with the California Healthcare
Workforce Policy Commission, health systems agencies, and other
appropriate organizations in the preparation of this plan.
  SEC. 11.  Section 127928 of the Health and Safety Code is amended
to read:
   127928.  For purposes of this part, the following terms have the
following meanings:
   (a) "Program" means the California Medical and Dental Student Loan
Repayment Program of 2002.
   (b) (1) "Medically underserved area" means an area as defined in
Part 5 of Chapter 1 of Title 42 of the Code of Federal Regulations or
an area of the state where unmet priority needs for physicians
exists as determined by the California Healthcare Workforce Policy
Commission pursuant to Section 128225 of the Health and Safety Code.

   (2) "Dentally underserved area" means a geographic area eligible
to be designated as having a shortage of dental professionals
pursuant to Part I of Appendix B to Part 5 of Chapter 1 of Title 42
of the Code of Federal Regulations or an area of the state where
unmet priority needs for dentists exist as determined by the
California Healthcare Workforce Policy Commission pursuant to Section
128224 of the Health and Safety Code.
   (c) (1) "Medically underserved population" means the Medi-Cal,
Healthy Families and uninsured population.
   (2) "Dentally underserved population" means persons without dental
insurance and persons eligible for the Denti-Cal and Healthy
Families Programs who are population groups described as having a
shortage of dental care professionals in Part I of Appendix B to Part
5 of Chapter 1 of Title 42 of the Code of Federal Regulations.
   (d) "Medi-Cal threshold languages" means primary languages spoken
by limited-English-proficient (LEP) population groups meeting a
numeric threshold of 3,000 eligible LEP Medi-Cal beneficiaries
residing in a county, 1,000 Medi-Cal eligible LEP beneficiaries
residing in a single ZIP Code, or 1,500 LEP Medi-Cal beneficiaries
residing in two contiguous ZIP Codes.
   (e) "Office" means the Office of Statewide Health Planning and
Development.
  SEC. 12.  Section 128040 of the Health and Safety Code is amended
to read:
   128040.  (a) The Office of Statewide Health Planning and
Development shall report to the Legislature on or before June 30,
2002, on the feasibility of establishing a California dental loan
forgiveness program utilizing the same general guidelines applicable
to the federal National Health Service Corps State Loan Repayment
Program (42 U.S.C.A. Sec. 254q-1; 42 C.F.R., Part 62, Subpart C
(commencing with Section 62.51)), except as follows:
   (1) A dentist shall be eligible to participate in the loan
forgiveness program if he or she provides full-time or half-time
dental services in either of the following:
   (A) A dental health professional shortage area (DHPSA),
established pursuant to Section 254e(a) of Title 42 of the United
States Code.
   (B) An area of the state where unmet priority needs for dentists
exist as determined by the California Healthcare Workforce Policy
Commission pursuant to Section 128225.
   (2) Matching funds to repay a portion of the dentist's outstanding
loan amount shall be required from the practice site areas or from
other private nonprofit sources.
   (3) A qualifying practice site shall include a private dental
practice.
   (b) (1) The report required under subdivision (a) shall include
all of the following:
   (A) A projection of the dentist-to-population ratio for California
in the next decade.
   (B) A determination of the future need for dentists and dental
care in underserved communities.  The office shall work
collaboratively with organizations that represent providers of dental
services to underserved communities in making this determination.
   (C) A report on the utilization by dentists of tuition loan
repayment programs at the federal and state level and identify the
barriers to full utilization of these loan repayment programs.
   (D) A report on the projected cost increase of dental school
education at public and private postsecondary educational
institutions.
   (E) A report on the implications of administering an additional
program, including a cost analysis.
   (2) The report also shall include recommendations on whether a
program described in subdivision (a) should be established and, if
so, suggested funding sources.  In making its recommendations, the
office shall consider the impact of the program on access to dental
services in areas of the state that currently have a shortage of
dentists.
  SEC. 13.  Section 128205 of the Health and Safety Code is amended
to read:
   128205.  As used in this article, and Article 2 (commencing with
Section 128250), the following terms mean:
   (a) "Family physician" means a primary care physician who is
prepared to and renders continued comprehensive and preventative
health care services to families and who has received specialized
training in an approved family practice residency for three years
after graduation from an accredited medical school.
   (b) "Associated" and "affiliated" mean that relationship that
exists by virtue of a formal written agreement between a hospital or
other health care delivery system and an approved medical school
which pertains to the family practice training program for which
state contract funds are sought.  This definition shall include
agreements that may be entered into subsequent to October 2, 1973, as
well as those relevant agreements that are in existence prior to
October 2, 1973.
   (c) "Commission" means the California Healthcare Workforce Policy
Commission.
   (d) "Programs that train primary care physician's assistants"
means a program that has been approved for the training of primary
care physician assistants pursuant to Section 3513 of the Business
and Professions Code.
   (e) "Programs that train primary care nurse practitioners" means a
program that is operated by a California school of medicine or
nursing, or that is authorized by the Regents of the University of
California or by the Trustees of the California State University, or
that is approved by the Board of Registered Nursing.
  SEC. 14.  Section 128207 is added to the Health and Safety Code, to
read:
   128207.  Any reference in any code to the Health Manpower Policy
Commission is deemed a reference to the California Healthcare
Workforce Policy Commission.
  SEC. 15.  Section 128215 of the Health and Safety Code is amended
to read:
   128215.  There is hereby created a California Healthcare Workforce
Policy Commission.  The commission shall be composed of 10 members
who shall serve at the pleasure of their appointing authorities:
   (a) Eight members appointed by the Governor, as follows:
   (1) One representative of the University of California medical
schools, from a nominee or nominees submitted by the University of
California.
   (2) One representative of the private medical or osteopathic
schools accredited in California from individuals nominated by each
of these schools.
   (3) One representative of practicing family physicians.
   (4) One representative who is a practicing osteopathic physician
or surgeon and who is board certified in either general or family
practice.
   (5) One representative of undergraduate medical students in a
family practice program or residence in family practice training.
   (6) One representative of trainees in a primary care physician's
assistant program or a practicing physician's assistant.
   (7) One representative of trainees in a primary care nurse
practitioners program or a practicing nurse practitioner.
   (8) One representative of the Office of Statewide Health Planning
and Development, from nominees submitted by the office director.
   (b) Two consumer representatives of the public who are not elected
or appointed public officials, one appointed by the Speaker of the
Assembly and one appointed by the Chairperson of the Senate Committee
on Rules.
   (c) The Chief of the Health Professions Development Program in the
Office of Statewide Health Planning and Development, or the chief's
designee, shall serve as executive secretary for the commission.
  SEC. 16.  Section 128235 of the Health and Safety Code is amended
to read:
   128235.  Pursuant to this article and Article 2 (commencing with
Section 128250), the Director of the Office of Statewide Health
Planning and Development shall do all of the following:
   (a) Determine whether family practice, primary care physician
assistant training program proposals, and primary care nurse
practitioner training program proposals submitted to the California
Healthcare Workforce Policy Commission for participation in the state
medical contract program established by this article and Article 2
(commencing with Section 128250) meet the standards established by
the commission.
   (b) Select and contract on behalf of the state with accredited
medical schools, programs that train primary care physician
assistants, programs that train primary care nurse practitioners,
hospitals, and other health care delivery systems for the purpose of
training undergraduate medical students and residents in the
specialty of family practice.  Contracts shall be awarded to those
institutions that best demonstrate the ability to provide quality
education and training and to retain students and residents in
specific areas of California where there is a recognized unmet
priority need for primary care family physicians.  Contracts shall be
based upon the recommendations of the commission and in conformity
with the contract criteria and program standards established by the
commission.
   (c) Terminate, upon 30 days' written notice, the contract of any
institution whose program does not meet the standards established by
the commission or that otherwise does not maintain proper compliance
with this part, except as otherwise provided in contracts entered
into by the director pursuant to this article and Article 2
(commencing with Section 128250).
  SEC. 17.  Section 128260 of the Health and Safety Code is amended
to read:
   128260.  As used in this article, unless the context otherwise
requires, the following definitions shall apply:
   (a) "Commission" means the California Healthcare Workforce Policy
Commission.
   (b) "Director" means the Director of Statewide Health Planning and
Development.
   (c) "Medically underserved designated shortage area" means any of
the following:
   (1) An area designated by the commission as a critical health
manpower shortage area.
   (2) A medically underserved area, as designated by the United
States Department of Health and Human Services.
   (3) A critical manpower shortage area, as defined by the United
States Department of Health and Human Services.
   (d) "Primary care physician" means a physician who has the
responsibility for providing initial and primary care to patients,
for maintaining the continuity of patient care, and for initiating
referral for care by other specialists.  A primary care physician
shall be a board-certified or board-eligible general internist,
general pediatrician, general obstetrician-gynecologist, or family
physician.
  SEC. 18.  Section 128330 of the Health and Safety Code is amended
to read:
   128330.  As used in this article:
   (a) "Board" means the Board of Trustees of the Health Professions
Education Foundation.
   (b) "Commission" means the California Healthcare Workforce Policy
Commission.
   (c) "Director" means the Director of the Office of Statewide
Health Planning and Development.
   (d) "Foundation" means the Health Professions Education
Foundation.
   (e) "Health professions" or "health professionals" means
physicians and surgeons licensed pursuant to Chapter 5 (commencing
with Section 2000) of Division 2 of the Business and Professions
Code, dentists, registered nurses, and other health professionals
determined by the office to be needed in medically underserved areas.

                                               (f) "Office" means the
Office of Statewide Health Planning and Development.
   (g) "Underrepresented groups" means African-Americans, Native
Americans, Hispanic-Americans, or other persons underrepresented in
medicine, dentistry, nursing, or other health professions as
determined by the board.  After January 1, 1990, the board, upon a
finding that the action is necessary to meet the health care needs of
medically underserved areas, may add a group comprising the
economically disadvantaged to those groups authorized to receive
assistance under this article.
  SEC. 19.  Section 128385 of the Health and Safety Code is amended
to read:
   128385.  (a) There is hereby created the Registered Nurse
Education Program within the Health Professions Education Foundation.
  Persons participating in this program shall be persons who agree in
writing prior to graduation to serve in an eligible county health
facility, an eligible state-operated health facility, or a health
manpower shortage area, as designated by the director of the office.
Persons agreeing to serve in eligible county health facilities,
eligible state-operated health facilities, or health manpower
shortage areas may apply for scholarship or loan repayment.  The
Registered Nurse Education Program shall be administered in
accordance with Article 1 (commencing with Section 128330), except
that all funds in the Registered Nurse Education Fund shall be used
only for the purpose of promoting the education of registered nurses
and related administrative costs.  The Health Professions Education
Foundation shall make recommendations to the director of the office
concerning both of the following:
   (1) A standard contractual agreement to be signed by the director
and any student who has received an award to work in an eligible
county health facility, an eligible state-operated health facility,
or in a health manpower shortage area that would require a period of
obligated professional service in the areas of California designated
by the California Healthcare Workforce Policy Commission as deficient
in primary care services.  The obligated professional service shall
be in direct patient care.  The agreement shall include a clause
entitling the state to recover the funds awarded plus the maximum
allowable interest for failure to begin or complete the service
obligation.
   (2) Maximum allowable amounts for scholarships, educational loans,
and loan repayment programs in order to assure the most effective
use of these funds.
   (b) Applicants may be persons licensed as registered nurses or
graduates of associate degree nursing programs prior to entering a
program granting a baccalaureate of science degree in nursing.
Priority shall be given to applicants who hold associate degrees in
nursing.
   (c) Not more than 5 percent of the funds available under the
Registered Nurse Education Program shall be available for a pilot
project designed to test whether it is possible to encourage
articulation from associate degree nursing programs to baccalaureate
of science degree nursing programs.  Persons who otherwise meet the
standards of subdivision (a) shall be eligible for educational loans
when they are enrolled in associate degree nursing programs.  If
these persons complete a baccalaureate of science degree nursing
program in California within five years of obtaining an associate
degree in nursing and meet the standards of this article, these loans
shall be completely forgiven.
   (d) As used in this section, "eligible county health facility"
means a county health facility that has been determined by the office
to have a nursing vacancy rate greater than noncounty health
facilities located in the same health facility planning area.
   (e) As used in this section, "eligible state-operated health
facility" means a state-operated health facility that has been
determined by the office to have a nursing vacancy rate greater than
noncounty health facilities located in the same health facility
planning area.
  SEC. 20.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.