Amended in Assembly March 17, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1677

Introduced by Assembly Member Gomez

February 12, 2014

An act to add and repeal Article 2 (commencing with Section 70130) of Chapter 3 of Part 42 of Division 5 of Title 3 of the Education Code, relating to nursing begin delete education. end delete begin insert education, and making an appropriation therefor. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1677, as amended, Gomez. Nursing education: service in public hospitals and veterans’ facilities.

Existing law establishes the Student Aid Commission as the primary state agency for the administration of state-authorized student financial aid programs available to students attending all segments of postsecondary education.

Existing law establishes the State Nursing Assumption Program of Loans for Education, administered by the commission, under which any person enrolled in an institution of postsecondary education and participating in that loan assumption program is eligible to receive a conditional warrant for loan assumption, to be redeemed upon becoming employed as a full-time nursing faculty member at a California college or university.

This bill would establish a loan assumption program for employees of eligible public facilities, as defined to include state hospitals, state veterans’ homes, members of the California Association of Public Hospitals and Health Systems, begin delete and end delete California facilities administered by the federal Veterans Health Administration begin insert , and health care districts located in California end insert . This program would provide loan assumption benefits to persons who fulfill agreements to work full time for 4 consecutive years as clinical registered nurses or licensed vocational nurses in eligible public facilities, as specified, that employ registered nurses or licensed vocational nurses. The program would provide for the assumption of up to $15,000 annually of a qualifying loan for consecutive years of qualifying clinical registered nursing or licensed vocational nursing service, up to a total loan assumption of $60,000.

The bill would require that, in any fiscal year, the commission award no more than the number of warrants that are authorized in the Budget Act for that fiscal year for the assumption of loans pursuant to the program. This program would become inoperative on July 1, begin delete 2020, end delete begin insert 2022, end insert and would be repealed on January 1, begin delete 2021. end delete begin insert 2023. The bill would appropriate $48,000,000 from the General Fund to the commission to be expended for purposes of the commission issuing loan assumption awards beginning with the 2015-16 fiscal year to the 2021-22 fiscal year, inclusive, as specified. end insert

Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation:  begin delete no end delete begin insert yes end insert . Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Article 2 (commencing with Section 70130) is
added to Chapter 3 of Part 42 of Division 5 of Title 3 of the Education Code, to read:

 

Article 2.  Service in Public Hospitals and Veterans’ Facilities

 

70130.  

(a) (1) Any person enrolled in an eligible institution,
or any person who agrees to work full time as a registered nurse
or a licensed vocational nurse in an eligible public facility that
employs registered nurses or licensed vocational nurses, may be
eligible to enter into an agreement for loan assumption, to be
redeemed pursuant to Section 70131 upon becoming employed as
a clinical registered nurse or licensed vocational nurse in an eligible
public facility that employs registered nurses or licensed vocational
nurses. In order to be eligible to enter into an agreement for loan
assumption, an applicant shall satisfy all of the conditions specified
in subdivision (b).

(2) As used in this article, “eligible institution” means a
postsecondary institution that is determined by the Student Aid
Commission to meet both of the following requirements:

(A) The institution is eligible to participate in state and federal
financial aid programs.

(B) The institution maintains an accredited program of
professional preparation for licensing as a registered nurse or
vocational nurse in California.

(3) As used in this article, “eligible public facility” means any
of the following:

(A) A state hospital administered by the State Department of
State Hospitals.

(B) A state veterans’ home referenced in Section 1011 of the
Military and Veterans Code.

(C) A public hospital that is a member of the California
Association of Public Hospitals and Health Systems.

(D) A facility administered by the federal Veterans Health
Administration and located in California.

begin insert

(E) A health care district located in California.

end insert

(b) (1) The applicant has been admitted to, or is enrolled in, or
has successfully completed, an accredited program of professional
preparation for licensing as a registered nurse or vocational nurse
in California. However, a person who is currently employed as a
registered nurse or licensed vocational nurse in an eligible public
facility may be eligible to enter into an agreement for loan
assumption under Article 1 (commencing with Section 70100),
but is not eligible to enter into an agreement for loan assumption
under this article.

(2) The applicant is currently enrolled, or has been admitted to
a program in which he or she will be enrolled, on a full-time basis,
as determined by the participating institution. The applicant shall
agree to maintain satisfactory academic progress and a minimum
of full-time enrollment, as defined by the participating eligible
institution.

(3) The applicant has been judged by his or her postsecondary
educational institution to have outstanding ability on the basis of
criteria that may include, but need not be limited to, any of the
following:

(A) Grade point average.

(B) Test scores.

(C) Faculty evaluations.

(D) Interviews.

(E) Other recommendations.

(4) The applicant has received, or is approved to receive, a loan
under one or more of the following designated loan programs:

(A) The Federal Family Education Loan Program (20 U.S.C.
Sec. 1071 et seq.).

(B) Any loan program approved by the Student Aid
Commission.

(5) The applicant has agreed to work full time for at least four
consecutive years as a clinical registered nurse or licensed
vocational nurse in an eligible public facility that employs
registered nurses or licensed vocational nurses.

(c) No applicant who has completed fewer than 60 semester
units, or the equivalent, shall be eligible under this section to
participate in the loan assumption program set forth in this article.

(d) A person participating in the program pursuant to this section
shall not enter into more than one agreement under this article.

70131.  

The commission shall commence loan assumption
payments, as specified in Section 70132, upon verification that
the applicant has fulfilled all of the following:

(a) The applicant has become a registered nurse or vocational
nurse licensed to practice in California.

(b) The applicant is working full time as a clinical registered
nurse or licensed vocational nurse in an eligible public facility that
employs registered nurses or licensed vocational nurses.

(c) The applicant has met the requirements of the agreement
and all other pertinent conditions of this article.

70132.  

The terms of a loan assumption granted under this
article shall be as follows, subject to the specific terms of each
agreement:

(a) After a program participant has completed one year of
full-time employment as described in subdivision (b) of Section
70131, the commission shall assume up to fifteen thousand dollars
($15,000) of the participant’s outstanding liability under one or
more of the designated loan programs.

(b) After a program participant has completed two years of
full-time employment as described in subdivision (b) of Section
70131, the commission shall assume up to an additional fifteen
thousand dollars ($15,000) of the participant’s outstanding liability
under one or more of the designated loan programs, for a total loan
assumption of up to thirty thousand dollars ($30,000).

(c) After a program participant has completed three years of
full-time employment as described in subdivision (b) of Section
70131, the commission shall assume up to an additional fifteen
thousand dollars ($15,000) of the participant’s outstanding liability
under one or more of the designated loan programs, for a total loan
assumption of up to forty-five thousand dollars ($45,000).

(d) After a program participant has completed four years of
full-time employment as described in subdivision (b) of Section
70131, the commission shall assume up to an additional fifteen
thousand dollars ($15,000) of the participant’s outstanding liability
under one or more of the designated loan programs, for a total loan
assumption of up to sixty thousand dollars ($60,000).

70133.  

(a) Except as provided in subdivision (b), if a program
participant fails to complete a minimum of four consecutive years
of full-time employment as required by this article, under the terms
of the agreement pursuant to paragraph (5) of subdivision (b) of
Section 70130, the participant shall retain full liability for all
student loan obligations remaining after the commission’s
assumption of loan liability for the last year of qualifying clinical
registered nursing or licensed vocational nursing service pursuant
to Section 70132.

(b) Notwithstanding subdivision (a), if a program participant
becomes unable to complete one of the four consecutive years of
qualifying clinical registered nursing or licensed vocational nursing
service due to serious illness, pregnancy, or other natural causes,
the term of the loan assumption agreement shall be extended for
a period not to exceed one year. The commission shall make no
further payments under the loan assumption agreement until the
applicable work requirements as specified in Section 70131 have
been satisfied.

(c) If a natural disaster prevents a program participant from
completing one of the required years of work due to the interruption
of employment at the employing eligible public facility, the term
of the loan assumption agreement shall be extended for the period
of time equal to the period from the interruption of employment
at the employing eligible public facility until the resumption of
employment. The commission shall make no further payments
under the loan assumption agreement until the applicable
employment requirements specified in Section 70131 have been
satisfied.

70134.  

(a) The commission shall administer this article, and
shall adopt rules and regulations for that purpose. The rules and
regulations shall include, but need not be limited to, provisions
regarding the period of time during which an agreement shall
remain valid, the reallocation of resources in light of agreements
that are not used by program participants, the failure, for any
reason, of a program participant to complete a minimum of four
consecutive years of qualifying clinical registered nursing or
licensed vocational nursing service, and the development of
projections for funding purposes.

(b) If a provision is added to this article and the commission
deems it necessary to adopt a rule or regulation to implement that
provision, the commission shall develop and adopt that rule or
regulation no later than six months after the operative date of the
statute that adds the provision.

70135.  

On or before January 31, 2016, and on or before each
January 31 thereafter until, and including, January 31, 2020, the
commission shall report annually to the Legislature regarding both
of the following, on the basis of sex, age, and ethnicity:

(a) The total number of program participants and the type of
program of professional preparation they are attending or have
attended.

(b) The numbers of participants who complete one, two, three,
or four years of qualifying clinical registered nursing or licensed
vocational nursing service, respectively.

70136.  

On or before May 1, 2019, the Office of the Legislative
Analyst shall submit a report to the Legislature that includes the
findings and recommendations of the Legislative Analyst with
respect to the efficacy of the program established by this article.

70137.  

Reports pursuant to Sections 70135 and 70136 shall be
submitted pursuant to Section 9795 of the Government Code.

70138.  

In selecting applicants for participation in this program,
the commission shall grant priority to applicants who, in the
determination of the commission, are included in any of the
following categories:

(a) Persons who possess a baccalaureate degree at the time of
initial application.

(b) Persons who are enrolled in an accelerated program of
professional preparation for licensing as a registered nurse or
vocational nurse in California.

(c) Persons who are recipients of federally subsidized student
loans or other need-based student loans.

70139.  

Notwithstanding any other law, in any fiscal year, the
commission shall award no more than the number of warrants that
are authorized in the annual Budget Act for that fiscal year for the
assumption of loans pursuant to this article.

begin insert

begin insert 70140. end insert   

The amount of forty-eight million dollars ($48,000,000)
is hereby appropriated from the General Fund to the commission
to be expended for purposes of the commission issuing loan
assumption awards beginning with the 2015-16 fiscal year to the
2021-22 fiscal year, inclusive, as follows:

(a) For the 2015-16 fiscal year, the commission may expend
up to three million dollars ($3,000,000) to award up to 200 awards
pursuant to subdivision (a) of Section 70132.

(b) For the 2016-17 fiscal year, the commission may expend
up to six million dollars ($6,000,000) to award up to 200 awards
pursuant to subdivision (a) of, and up to 200 awards pursuant to
subdivision (b) of, Section 70132.

(c) For the 2017-18 fiscal year, the commission may expend
up to nine million dollars ($9,000,000) to award up to 200 awards
pursuant to subdivision (a) of, up to 200 awards pursuant to
subdivision (b) of, and up to 200 awards pursuant to subdivision
(c) of, Section 70132.

(d) For the 2018-19 fiscal year, the commission may expend
up to twelve million dollars ($12,000,000) to award up to 200
awards pursuant to subdivision (a) of, up to 200 awards pursuant
to subdivision (b) of, up to 200 awards pursuant to subdivision (c)
of, and up to 200 awards pursuant to subdivision (d) of, Section
70132.

(e) For the 2019-20 fiscal year, the commission may expend
up to nine million dollars ($9,000,000) to award up to 200 awards
pursuant to subdivision (b) of, up to 200 awards pursuant to
subdivision (c) of, and up to 200 awards pursuant to subdivision
(d) of, Section 70132.

(f) For the 2020-21 fiscal year, the commission may expend up
to six million dollars ($6,000,000) to award up to 200 awards
pursuant to subdivision (c) of, and up to 200 awards pursuant to
subdivision (d) of, Section 70132.

(g) For the 2021-22 fiscal year, the commission may expend
up to three million dollars ($3,000,000) to award up to 200 awards
pursuant to subdivision (d) of Section 70132.

end insert

begin delete 70140. end delete
begin insert 70141. end insert   

This article shall become inoperative on July 1, begin delete 2020, end delete
begin insert 2022, end insert and, as of January 1, begin delete 2021, end delete begin insert 2023, end insert is repealed, unless a later
enacted statute, that becomes operative on or before January 1,
begin delete 2021, end delete begin insert 2023, end insert deletes or extends the dates on which it becomes
inoperative and is repealed.