BILL ANALYSIS Ó
AB 2048
Page 1
Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2048 (Gray) - As Amended April 7, 2016
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill makes changes to the federally funded State Loan
Repayment Program (SLRP) administered by the Office of Statewide
Health Planning and Development, and appropriates state funding
to support the program. Specifically, this bill:
1)Requires OHPD include all federally qualified health centers
(FQHCs) located in California in the program's certified
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eligible site list, to strive to maximize the number of
applications per grant cycle, and to report to the Legislature
on applications and awards.
2)Continuously appropriates $1 million to OSHPD, without regard
to fiscal year, to provide state matching funds for the SLRP.
FISCAL EFFECT:
1)One-time cost of $1 million GF to provide state matching funds
for the program, as appropriated by this bill.
2)Up to $200,000 in one-time costs to OSHPD to update policies,
procedures, forms, as well as handle a significant influx of
applications (California Health Planning Fund).
3)Ongoing GF cost pressure to continue state funding
participation for the SLRP in future years.
COMMENTS:
1)Purpose. This bill is intended to streamline participation in
the SLRP by eliminating burdensome application and renewal
requirements for FQHCs and shifting the responsibility to
provide matching funds to the state.
2)Background. The SLRP is a federally-funded,
state-administered program that provides loan repayment funds
of up to $50,000 per service obligation, which is either a
full-time two-year or half-time four-year period. Extensions
AB 2048
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to the service obligation are also available. The program
includes a matching requirement. Federal rules require states
to make available (directly or through donations from public
or private entities) non-federal contributions in cash toward
SLRP contracts in an amount not less than $1 for each $1 of
federal funds provided in the grant. California does not
currently provide state funding for the required match;
instead, participating clinics provide the match. Thus, a
$50,000 award would include $25,000 from the federal grant and
$25,000 from the clinic's match. Essentially, providing this
benefit costs the clinic an additional $12,500 per year for
two years on top of the provider's salary, while the eligible
provider receives a tax-free loan repayment award of up to
$50,000 over two years.
This bill also requires all California FQHCs to be included in
the program's "certified eligible list." Currently, OSHPD uses
the list to identify sites that are located in areas that are
designated as "health professional shortage areas" and that
have agreed to provide matching funds. To be on the list,
sites must apply and renew every three years. By federal
rule, all community clinics meet the "health professional
shortage" criteria- and if the program no longer requires
clinics to match funds as this bill appears to propose, then
allowing automatic eligibility for FQHCs seems reasonable.
3)Comments. While providing state funding would benefit
clinics, it does not appear that it would increase the number
of loan repayment awards that occur though the program. If
state funding simply displaces private funding for the match,
the state will pay $1 million for the same overall amount of
recruitment and retention benefits that would occur in absence
of state funding. If this bill is attempting to change the
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current distribution of funds, rather than increasing the
total number of awards, the author could consider alternative
ways to do this, or could more clearly specify this intent.
Also, it is unclear why the $1 million is continuously
appropriated and whether it is intended that the department
use this state funding to match federal funding for all
recipients, or only for those who could not otherwise afford
the match.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081