BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                          AB 589 (Perea)
          
          Hearing Date: 8/15/2011         Amended: 7/12/2011
          Consultant: Katie Johnson       Policy Vote: Health 9-0
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          ____
          BILL SUMMARY: AB 589 would establish the Steven M. Thompson 
          Medical School Scholarship Program. The program would award up 
          to $105,000 per awardee to eligible medical or osteopathic 
          school students over the course of their medical school 
          curricula. The awardee would agree to practice for three years 
          in either a clinic or a medical practice located in a medically 
          underserved area.
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2011-12      2012-13       2013-14    Fund
           
          Scholarships and       at least $1,000 annually         
          Federal/*
          program administration                                  Private

          *See Staff Comments
          _________________________________________________________________
          ____

          STAFF COMMENTS: This bill meets the criteria for referral to the 
          Suspense File.
          
          This bill would establish the Steven M. Thompson Medical School 
          Scholarship Program (Program) within the Health Professions 
          Education Foundation (Foundation). 

          A selection committee would be required to develop awardee 
          selection guidelines that meet specified criteria:  1) provide 
          priority consideration to applicants who would be best suited to 
          meet the cultural and linguistic needs and demands of patients 
          from a medically underserved area,  2) give preference to 
          applicants who have committed to practicing in family practice, 
          internal medicine, pediatrics, or obstetrics/gynecology, 3) give 
          preference to applicants who would serve in a super-medically 
          underserved area, and 4) include a factor ensuring geographic 








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          distribution of placements.

          Scholarship recipients would be required to be students who 
          agree in writing, prior to entering an accredited medical or 
          osteopathic school, to serve for at least three years in either 
          a clinic or a medical practice located in a medically 
          underserved area, as specified. The maximum award would be 
          $105,000 and would be distributed over the course of a standard 
          medical school curriculum. This bill would provide that in the 
          event that an awardee does not complete the minimum of three 
          years of service, the Program would recover the funds awarded 
          and any related interest.

          This bill would create the Steven M. Thompson Medical School 
          Scholarship Account (Account) within the Health Professions 
          Education Fund for the purposes of receiving federal or private 
          funds. Monies in the account would be used for only the 
          following, upon appropriation by the Legislature: 1) 
          scholarships, 2) program administrative expenses, not to exceed 
          5 percent of the total appropriation for the program. This bill 
          would provide that the Program would only be implemented to the 
          extent that the Account contains sufficient funds as determined 
          by the Foundation. Funds in the Health Professions Education 
          Fund are continuously appropriated; it is unclear whether or not 
          the monies in the Account would be continuously appropriated or 
          would need to be appropriated by the Legislature, as this bill 
          suggests. Staff recommends that this bill be amended to 
          establish the Account within the State Treasury and that monies 
          contained in the Account be made available upon appropriation by 
          the Legislature.

          Fiscal Impact
          In order to establish regulations and guidelines and to 
          administer such a Program, the Foundation would need at least 
          half a personnel year, approximately $50,000 annually. Since 
          administrative funds are limited to 5 percent of the total 
          Program appropriation, the Program would require an account 
          balance of at least $1,000,000 annually. Although this bill 
          would specify that monies in the Account would consist of 
          federal and private funds, no specific funding sources have been 
          identified. Thus, there would be General Fund cost pressure to 
          fund this program if federal and private monies do not 
          materialize. Program costs could increase depending on the 
          number of scholarships it chose to award.








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